Market Reports

Just Released! The Charlottesville Area Association of Realtors’ Year-End Market Report

January 14, 2010 by Sasha Farmer · Leave a Comment 

The Charlottesville Area Association of Realtors has just released it’s Year End Market Report this morning, and it includes some very valuable information that home buyers and sellers should really be aware of.

Click here to download and read the full report. 2009 CAAR Year-End Market Report

I will be doing a more thorough analysis this weekend, but until then, some of the salient points…

Some people have suggested that the first time home buyer credit hasn’t been effective, but I have completely disagreed with that, and while this data isn’t a clear indicator that the credit is working, it would suggest that more first time buyers (in the below $300,000 price range) have been in our market in Q4 2009, than we are typically used to.

As reported for the past two quarterly reports, significantly lower home prices (down 20% or more) are driving the pick-up in sales. In addition, the $8,000 tax credit for first time buyers supercharged the sale of starter homes (below $300,000) in 2009. 67.5% of home sales for the year were in this starter home category, which is approximately a 10% increase in this category.

- CAAR Year End Market Report.

One thing to be aware of is the average price per square foot we’re seeing across the different counties. This is one of the more profound ways to see that our pricing has returned to that of 2005 levels (at least), if not gone lower. My personal belief is that our prices are actually closer to what they were in 2004. Take a look at the $/SF analysis below to see how your county has fared.

Price Per Square Foot (Finished)

Another indicator that allows us to see the decline in home prices is a major drop in the price per square foot numbers. The average price per square foot of finished space in homes is not a scientific number, but a downward trend over the years clearly indicates a decrease in prices (and vice versa). According to the chart below, prices peaked in 2006 and have declined for the past three years. There has been a $28 per square foot drop since the peak in 2006. The current $143 per square foot is the lowest number since 2004.

- CAAR Year End Market Report.

According to the CAAR Year End market Report, our inventory of homes is slowly declining. Of course this was the main aim of the First TIme Home Buyer tax credit, and we are all anxious to see what will happen to inventory once it expires.

Inventory of Homes for Sale

“The inventory of homes for sale in the Charlottesville has continued to decline very slowly. As we have reported for the past several quarters, the excess of inventory is causing many of the problems with our local housing market. The decline in inventory is very encouraging, but we will still have too many homes on the market for the current demand. This could change very quickly going into the busy spring market.”

- CAAR Year End Market Report.

Average Days on Market

One piece of information that I always want future sellers to be acutely aware of is the average days on market. The days on market is a measure of homes SOLD BY AN AGENT THROUGH THE MLS, and how long they’re taken on the market being actively marketed before they have sold. This number does not include some very high days on market numbers for all of the homes that never sell, it only calculated DOM for solds, so it is artificially lower than days on market of ALL HOMES. If you are thinking of selling your home in the near future, you need to be acutely aware of the average days on market for your county and be sure to give your real estate agent a reasonable amount of time to accomplish your goals.

Will be elaborating more on this report later, but would love some questions from all of you!

CAAR Releases it's Third Quarter Market Report

October 18, 2009 by Sasha C. Farmer Realtor · Leave a Comment 

The Charlottesville Association of Realtors’ Third Quarter Market Report has just been released and it definitely contains some interesting data.  As we all know, we still have much more inventory than we can absorb with the current number of Purchasers in the market.

Check out the market report here;

CAAR Third Quarter Market Report

CAAR Mid Year Market Report 2009

July 9, 2009 by Sasha C. Farmer Realtor · Leave a Comment 

Click here to check out the CAAR Mid-Year Market Report!

The State of Our Market

March 10, 2008 by Sasha C. Farmer Realtor · Leave a Comment 

I have gotten several individual requests recently from both buyers and sellers to give them specific numbers and data about the current Charlottesville market.  I have run some numbers and gotten together some data, but also wanted to just make some general statements as well.  We are currently experiencing a buyer’s market.  What this means is that there are more (in some cases, many more) people who are currently trying to sell their home than there are people trying to buy new homes.  One number that shows this well is called an absorption rate.  

An absorption rate essentially indicates approximately how many homes sell in an average month (in the current market climate), then looks at the number of homes currently active on the market to determine about how long it will take for all of those homes to be sold (or to be “absorbed”). Obviously it cannot take into account the number of homes that will be added to the market in the time that the others are selling off of it, nor will it take into account those that expire or those that are withdrawn throughout the process.

What the absorption rate DOES tell you, if you are a seller, is exactly how much competition you have and exactly HOW outstanding your home must be in order to be one of the few homes in the sea of inventory that sells in the next 30 days, as opposed to the next 60, 90, 120 and (gasp!) beyond.

Example; In the price range of $300,000 – $400,000 there were 426 home sales between the City of Charlottesville and Albemarle County in the previous calendar year (March 1, 2007 – March 1, 2008). In a very rough calculation that would tell us that in the past year, in this price range, about 36 homes were sold each month. Then by looking at our current inventory of 261 active properties in that price range, we can see that with an estimated 36 homes selling a month, the absorption rate is about 7 months. This tells us that we have a 7 month inventory of homes in that price range, or that it would take (at a minimum) 7 months for the market to absorb all of these homes (though as we all know, many of these homes will not sell and thus will not be “absorbed”).

This number is actually quite optimistic.  Since that number is calculated with the past YEAR of sales (including the earlier months of 2007 when the market was moving faster), it actually gives us a slightly enhanced view of our odds.  

Now, what this tells you if you are going to list your home in this price range amongst the sea of other homes out there, is that your home needs to be in the top 36 of the 261 homes out there if you have any desire to sell in the next 30 days. You will need to stand out of the crowd, and the three major ways to do this will be through price, terms, and condition.  If you can already think of 36 homes out there that are much better maintained, decorated, or with newer systems and lower maintenance, then either you have a lot of work to do or you need to consider a different price range- this is, of course, unless you are in no rush and can wait 7+ months to sell.

What absorption rate doesn’t include is the handful of nice, new properties that will inevitably enter the market in your price range again next month, or the month after that, just serving to push yours further down the list if it’s not up to par.  What this COULD mean, is that even if not another property was listed between now and then, we would still have inventory left on the market at Easter, still some at Memorial Day and over the summer and homes would still dwindle unsold through the 4th of July.

This could be looked at as a grim story. On the flip side, however, it also tells us that there is an opportunity for 36 home sales in this specific price range in the next 30 days. With the proper pricing, staging, and maintenance- there is still a chance! It is certainly no surprise to hear that if you want your home to sell, your property must be PERFECT in comparison to the other homes available in that price range. If it is not perfect in comparison, then it is not in the right price range. This will be a very difficult reality for people to face. The days of the past when selling your home for more money than you purchased it are no longer a guarantee. What you purchased your home for has absolutely no bearing on what you will sell it for now.

A “neutral market” is described as being one in which the absorption rates hover around 6 months of inventory- this is an indication that there are are relatively the same number of people trying to sell homes as there are looking to buy. We are currently in a “buyer’s market” in all price ranges in the City of Charlottesville and Albemarle County. I have listed the absorption rates for several different price ranges in the chart linked here-  March 10 Absorption Rates. 

On a closing note, sellers- do not fret. In most cases a buyer’s market also has many benefits for sellers, as most sellers are moving on to buy another home (and often moving “up”). We are in buyer’s markets nationwide, so it is likely that what you might perceive as your loss on your next sale can become your gain in your next purchase.

Lowest International Cost of Living

February 6, 2008 by Sasha C. Farmer Realtor · Leave a Comment 

According to the investment services provider Mercer’s latest Worldwide Individual Tax Comparator Report, the United Arab Emirates (UAE) provides the best ratio of net to gross salary, with no income tax and small social-security contributions, meaning people enjoy a 95 percent return. In second place is Russia, which has a flat 13 percent tax for all income levels, while Hong Kong is in third place, with tax and social-security contributions coming in at just 14.2 percent of gross basic salary. The priciest place for single people is Belgium, where the return is only 49.5 percent of gross salary, while married people with or without children in Hungary get just 51.5 percent. For single people, the United Kingdom is tied at 14th place with India, Australia, and the United States. Brazil, India, and Turkey stand out as examples of countries where married people pay similar tax rates to single people.

No matter the tax rates, other costs of living and costs of housing and schooling still need to be taken into account when considering an overseas assignment. The UAE is highly attractive to expats. “For three to five years, young professionals can fast-track their savings to afford a mortgage when they return home, while senior executives can maximize their savings potential ahead of retirement,” says Markus Wiesner of Mercer in Dubai.

The Virginia Foreclosure Market

January 19, 2008 by Sasha C. Farmer Realtor · Leave a Comment 

Courtesy of Virginia Business Magazine, here is a good article on how Virginia’s housing market has fared in 2007, despite trouble nationwide with foreclosures. As stated in the article,

“At a time when foreclosures are soaring and some mortgage lenders have gone out of business, plenty of homebuilders would gladly trade places with Genuario. And homeowners in other states can’t help but look at their counterparts in Virginia with envy, because home prices here continue to outperform the nation’s. That’s one piece of encouraging news in what has been a bruising year for the housing industry.”

Additionally, click here for a very bad scan of a nice chart that was included in the article on Virginia Foreclosures FILINGS By County.

As you can see from the graphic, about 1 household out of every 196 households are subject to filing for foreclosure. However, in Virginia, only 1 out of every 411 homes are subject. Virginia has avoided quite a bit of the foreclosure mess. The two closest counties to Charlottesville that are listed- Orange and Culpeper counties- have 1 foreclosure FILING for every 132 and 96 households, respectively. Our local area hovers at about a 1% foreclosure FILING rate, which really is not a terrible statistic. Following the trend that the majority of foreclosures are a result of subprime loans, failures at flipping, and unscrupulous lending practices, it is probably safe to say that most of our neighbors here in the Charlottesville area will be relatively protected from impending foreclosures or short sales.

Over 80% of all foreclosures are in 5 states – and Virginia is not one of them. Currently, the top 5 foreclosure states are California, Florida, Ohio, Michigan and Texas, with Virginia currently falling at #21 in the nation. Compared to 148,000 in California; 86,000 in Florida; 47,000 in Ohio; and 44,000 in both Michigan and Texas; Virginia looks great with it’s mere 8,000 foreclosure sales in 2007. With an estimated 3,300,000 households in Virginia, this would leave us with less than a 0.01% ACTUAL foreclosure rate in the state. Back to the first article, on median home prices, we see

“Still, compared with states such as Florida, Nevada and California — which experienced huge building booms and busts — Virginia is holding up well. For instance, the median price for a Virginia home was higher in September than for the same time in 2006, a stark contrast to what’s happening nationally. In September, the national median existing-home price for all housing types dropped 4.2 percent to $211,700, while it rose by 5.53 percent in Virginia to $229,000. In fact, the Virginia Association of Realtors reports that a Virginia home purchased in 2002 at the median price of $144,480 appreciated 58 percent in the past five years.” 

However, all is not rosy.

“Virginia has one of the highest year-over-year increases (in foreclosure filings) in the past months. It’s catching up with some of the other states,”

says Daren Blomquist, a spokesman for RealtyTrac. While the bulk of these filings are occurring in Northern Virginia, Charlottesville will certainly see some evidence of the shift as well.

CAAR 2007 Year End Market Report

January 14, 2008 by Sasha C. Farmer Realtor · Leave a Comment 

The full 2007 Charlottesville/Albemarle Association of Realtors Year End Market Report can be found here.

Admittedly, 2007 was a markedly different from the handful of years preceding it, where the market was on fire and if you had a home to sell, you had a sale. We are now finding a strong advantage towards buyers that we will expect to see for several months, until the market is able to adjust itself. If we had continued moving ahead at rocket speed we would be even further from the prospect of affordable housing than we already are- this shift in the market may seem bad for sellers, but in truth it is good for everyone. I think that the most important point of the 2007 Year End Report is that made towards first time homebuyers urging the to buy, NOW. First time home buyers have to enter the market and release some of this inventory upwards in order for the market to return to equilibrium. The rates are historically low, buyers will likely never have as many options to choose from, and if you will be able to stay in the house for a minimum of 3-5 years, you should be able to hold the property long enough to ride out this wave of real estate chaos.  As quoted by the author of this article, Dave Philips;

As this report points out, the market is down from the records of the last few years, but we will still end up with the 4th highest sales total in history for our MLS. …This is an extraordinary time to buy a home in our area. Interest rates are amazing, the selection of homes is fantastic, and prices are low. For first time home buyers, this is the best market we have seen in years. There are over 500 homes on the market for under $200,000 and there are special financing options for first time buyers.