According to the following data, the Charlottesville single family home market segment has seen a decline in pricing of 11.47% since the all-time high in the 4th Quarter of 2007.
Charlottesville has had a huge run-up in prices. While here's been price depreciation for the past five quarters, it's not at a pace that indicates how low sales are. Other markets with similar rates of appreciation were in the "big bubble" states of CA, FLA, NV, AZ (see fig. 1). While others are worried about the "double dip," this area hasn't even seen its first bottom. So...what's to happen?
With the lack of buyers at all price points, can current sellers hold out for years? Could commenter "The Wait" be on to something?
"The Wait" left the above comment on a post about July's low sales over at RealCentralVA.
Charlottesville would have a long way for prices to drop in order to get back in line with area median income, let alone to burn through the excess inventory, which grows daily. And, of course, there's the shadow inventory: foreclosures and owners who become unintentional landlords.
Here's the rate of annual appreciation for the Charlottesville single family homes thru Q1 '10 from Forecast.com using the HPI. Quoted material begins here:
Last Year . . . . . . . . . . . . . . . . -7%
Last 5 Years . . . . . . . . . . . . . 13%
Last 10 Years . . . . . . . . . . . . 84%
Last 20 Years . . . . . . . . . . . +146%
Decline From All Time High -11.47%
Home Price appreciation rates for Charlottesville, VA are shown above for five time periods through 1st Quarter, 2010
The all time high in the Charlottesville Home Price Index was in the 4th Quarter, of 2007. That's a decline of -11.47% below the Charlottesville Home Price Index all time high. The Home Price Index indicates that the Charlottesville Market is up 84% over the last 10 years. The Home Price Index indicates that the Charlottesville Market is up 134% over the past 20 years. Home Prices in the Charlottesville Real Estate Market have lost 6.99% over the last 12 months.
The Charlottesville Home Price Index has declined for the last 5 consecutive quarters.
The highest annual home appreciation rate in the Charlottesville Real Estate Market was 20% in the twelve months ended with the 2nd Quarter of 2005. The worst annual home appreciation rate in the Charlottesville Market was -7% in the twelve months ended with the 1st Quarter of 2010.
The highest home appreciation in the Charlottesville Real Estate Market over a three year period was 50% in the three years ended with the 1st Quarter of 2006. The worst home appreciation over a three year period in the Charlottesville Market was -10% in the three years ended with the 1st Quarter of 2010."
End of quoted material. Chart, below, copyright same source. Bolding, emphasis = BB.
Economists say that, going forward,
"...housing values will only keep up with inflation. A home will return the money an owner puts in each month, but will not multiply the investment."Michael Snyder at The Economic Collapse:
Dean Baker, co-director of the Center for Economic and Policy Research, estimates that it will take 20 years to recoup the $6 trillion of housing wealth that has been lost since 2005. After adjusting for inflation, values will never catch up. NYTimes: Real Estate's Gold Rush is Gone Forever.
"Those waiting for U.S. housing prices to return to the levels of three or four years ago are living in fantasy land. Absent the onset of hyperinflation (which would cause the price of everything to rise dramatically), housing prices are simply not going to return to those levels." Read more.Related Reading:
Median Prices and Increases 2001 - 2009, All Property Types, Charlottesville, Albemarle, Greene, Fluvanna, Nelson