Tuesday, April 24, 2012

As Prices Continue to Decline, 61% of All Home Sales in the City of Charlottesville Were Under $250K in Q1 2012

The details come from the Nest Realty Group market report, embedded below.

The report states "The reduction in prices likely has had a positive impact on generating more sales." Additionally, mortgage interest rates have been  at or under 4% since the Fall of 2011.

The positives: Price declines are a big positive for buyers.  And buyer activity is up, with significant increase in contracts written; the closing dates occur in the second quarter. 

The negatives: price declines can hurt anybody who bought during the bubble years, whose equity is being wiped out.  There are many would-be sellers who simply can't lower their prices, which can lead to short sales or foreclosures.

Pricing still remains prohibitive for single family homes in the City: price is often not based on a beautiful product; it's based on paying a premium for proximity, or building on a bubble-era valuation.  City prices often rely on the mortgage holder(s) spending much more than the historic home-price-to-income ratio of 2.5%.  

There is a significant inventory priced at or below $200k in the City.  Problems: many of these props need a lot of work; or are too expensive for investors hoping to turn them into rentals.  And they're too expensive for lower-income families that don't have the downpayment (even for an FHA loan) and/or can't qualify for a mortgage.

The data:

Single Family:
Median price declined -4.3% over 2011
Sales rose 40%, from 42 to 59 over 2011
69% of all sales in the City are single family detached homes

Median price declined -26.2%
Sales dropped 25%, from 8 to 6 in 2012

Median price declined -26.3%
Sales dropped 23.3% y/y from 2011

There are currently 258 units total units available.
181 of these, or 70%, are single family homes.
In Q1, only 2 listings above $750k sold.

Click on image for larger version.

Recapping 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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