Thursday, April 26, 2012

Albemarle County Home Sales Q1 2012: Will the Road to "Recovery" Be Blocked By Rising Asking Prices?

The sales and price data come from the Nest Realty Group Q1 market report, embedded below.  See also a recap of City of Charlottesville Sales and Price Declines in Q1 2012.

The positives in Albemarle County:
  •  Inventory is lower.
  • The sales activity is highest since Q1 2007.  
  • There are reports of "multiple offers." 
  • There are "well priced" homes that sell in under two weeks. 
  • Buyer activity is up in comparison to 2011, as assessed by contracts which will close in the Second Quarter.
The negatives in Albemarle County:
  •  Lower inventory isn't necessarily a positive: locally or nationally.
  • There are still hundreds and hundreds of "mispriced" or "mislocated" properties that are  not selling.
  • The enthusiasm for believing the market is closer to "recovery" will lead to a rise in asking prices.  Anecdotally, this started happening in March.  
  • Price increases will lead to lower sales. As buyers have shown repeatedly over the past five years, there's only so much they are willing to pay. 
  • There simply aren't enough folks in this area "moving up" to relieve the amount of high-dollar inventory.  "Family homes" (McMansions) priced $600K-$1.3M are a slow market.  These already-built homes are competing with new construction, which is now less expensive, often "greener," and can be customized to the buyer's specifications.
  • There are listings at all price points offered for tens and sometimes hundreds of thousands under what the seller paid. 
  • Banks are still holding foreclosed inventory, at all price points, off the local market. 
  • At the highest end, the "farmette" and "estate" listings from $1.5M-$16M, pricing and valuation remain highly subjective--more than ever a matter of "opinion."  (Example: Donald Trump offering $3M+ for the foreclosed Albemarle House, which Bank of America has listed at $16M.)

The data:

Single Family:
Median price increased +10.1%: $343.5K from 2011's $312K
Sales rose +10.8%: 2011 130 v. 2012 144 

Townhouse/Attached:
Median price increased +20.9%: $238.2K 2012 v. $197K in 2011
Sales rose +9.4%: 58 in 2012 from 53 v 2011 

Condos:
Median price declined -2.5%: $101.2K  2012 v. $103.7K 2011 
Sales rose +62.5% 26 in 2012 v. 16 in 2011 (investors are grabbing these)

Your micromarket may vary.

Related:
Recapping the Nest Report in podcast.
A list of the headwinds that continue to face the market.
The CAAR report.

Q1 2012 Charlottesville Real Estate Market Report

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