Tuesday, April 12, 2011

CAAR Q1 2011 Market Report: Cville Area Buyers and Sellers Should Expect Slow Sales and Continuing Price Declines For the Next Couple Years

Update: See Albemarle County Q1 Median Home Price Declines and sales figures.

Original Post:
The Charlottesville Area Association of Realtors Q1 2011 report has shrunk to 1 page. 

Last year, the report lacked vital info for buyers and sellers, and this blog filled in the information that was missing from the 2010 Q1 Market Report.  Those numbers remain needed to gain context on this year's numbers.

Some highlights from The CAAR Q1 2011 Market Report:

*"Results in our market are in line with the national market."  The national housing market is in a double dip.  This area is seeing, in certain sectors, declining sales and declining prices.  And there is no indication this will change during 2011.

*Median Price: Unfortunately, the CAAR didn't bother to present median sales prices individually by category: the median for Single Family House, Condo, and Townhouse are combined.   So the median price for Albemarle County is reported as -11.4 and -8.2 in Charlottesville.   This aggregated price means very little to buyers or sellers. 

Sellers need additional information in their own category to know how much lower they should be pricing than the "competition." 

Buyers need additional information so they don't "overpay."  Lower medians are good news for buyers.  But buyers are still in danger of "catching a falling knife."  There are folks who bought in 2010 who are now "underwater."

*"The numbers indicate we are continuing to work toward a sustainable and saleable market."   What does "Sustainable" mean?  We take this to mean 'everybody is used to high inventory.' 16-24 months of inventory, depending on County/category.  And  years worth at the high end.  As for "Saleable"?  We take this to mean everybody has gotten used to the fact that prices are going to keep dropping for the next several years, and that bubble valuations will be back when the kids are all grown up.

*Pending Sales: Down.  But this isn't covered in the report. 

*Market Headwinds: Gas prices, rising mortgage rates, fewer qualified buyers, difficult credit market.  Not covered in the report.

If you have 30 seconds, read the CAAR Q1 2011 Report.  Just don't expect much insight.


Anonymous said...

This is a very informative post. I still cannot understand the motivations of the seller's agents in the Cville area. They must be encouraging the over-optimism that keeps listing prices nominally high (with wishful thinking) but prevents sales because no one is fool enough to buy. Preventing sales isn't in the agents' interests, so I'd think they would spend more time educating their sellers about the true current market conditions. Take 1325 Rugby for example -- nice house, but it was listed at $1.795M three months ago. That's $395/sq.ft.! Now the owners have had to decrease the price by 200K over the last few months, but at $349/sq.ft., they are still way over any sense of comparable sales prices from last year. And now the CAAR report shows that this year's prices have declined by 8-11%.

I think many sellers' agents need to have a little heart-to-heart chat with their clients.

Randy said...

This latest CAAR report was about as relevant as Steve Tyler on American Idol.

Debaser said...

Wow, the new format looks like a mutual fund advertisement. I thought the old Market Reports were bad but they at least had useful data in them.

The one metric they chose to show tabulated by region and year is the mostly irrelevant and easily abusable DOM?

I am looking forward to the next quarter's Advert/Market Report being condensed down to twitter length:

Is it a great time to buy and/or sell? YES! Saleability! Sustainability! See your Realtor(c) now! Note: DOM has remained steady.

RENTING! said...

Why distrust Realtors? This kind of report is exactly why. It's basically a lie.

Anonymous said...

Just noticed 1500 Rugby Ave. is "under contract" shortly after being listed for $419K. This dated fifties brick cape with 1600 sq. ft. of real finished living space, if you discount the 800 or so of poorly "finished" dank basement, last sold at the peak of the bubble in late 2004 for 295. So it appears some sellers are still finding their greater fools in this market. Of course "under contract" doesn't mean sold until it closes escrow, more so now. Still the presence of 3.5% down payment FHA mortgages encourages buyers to throw caution to the wind. This house would never in your dreams rent for more than mid teens, maybe $17C/month at best and that makes it worth $250K tops to a rational buyer. My recall is it turned over in the mid nineties for around $150K, but the city has stopped providing long term transfer history in its website so the 2004 sale is the only one available now. Wonder why they dropped real history information?