Archive for the ‘Market Analysis’ Category

I am going to go on the air on Saturday morning with Michael Guthrie to discuss the first half of 2011 real estate market data. I’ve checked out the CAAR Market Report and prepared my own analysis that I follow to guide me in assisting my clients.

At this level, I like to keep it simple. Here are my take-aways from the broad overview this data represents. My analysis is for Albemarle, Charlottesville, Fluvanna and Greene combined.

The inventory is continuing to decline year over year. Slowly. Closed sales year over year are off by 9% but the gap is closing. By the end of the year I think closed sales will be on pace with last year. Contracts were a dead heat for both resales and new homes this year over last.  This is all just more evidence the tax credit last year rearranged some of the sales. Median price year over year has declined. Foreclosure and short sale activity as a percentage of sales is up about 5% year over year.

What does all of this mean? It means we’ve had two first halves of the last two years with relatively consistent activity. There’s still supply that favors buyers. Short sales and foreclosures are still having a significant impact on our area. But all of this is just general information. There are areas that are seeing stronger sales and more stable pricing than others. There are homes that have been updated or very well maintained that are doing better than the market. The builders are finding success with new orders for energy efficient homes.

The point is this. You need to get information pertinent to your situation to make good decisions.  If you are considering a purchase, take the time to understand the market. Take the time to understand renting vs. owning and the affordability available to you now. If you are considering selling or need to sell, get trusted advice and follow it.

 If I can be of assistance, don’t hesitate to contact me.

I keep a variety of spreadsheets in which I monitor components of our market that are important indicators to me.  All information is derived from the CAAR MLS.

The Charlottesville Area in these stats is defined as Albemarle, Charlottesville, Fluvanna, and Greene combined.

Active Inventory Area All Types:  JUNE 7.  2010: 1878   2011: 1786 

Active Inventory Short Sale/Lender Owned: JUNE 7.  2010: 114  2011: 130

Contracts YTD Thru May Area: 

2010: 1028   (18% New Construction) (12% Short Sale/Foreclosure)

2011: 983       (17% New Construction) (19% Short Sale/Foreclosure)

We are  a few months away from seeing data that won’t be compared to tax credit influenced activity. Year over  year, contracts in April were off 32%. May was up 49%. But if you look at YTD comparison, contracts were within 4%. Sales activity could possibly be up as compared to 2010 by the end of June. Year over year, inventory has edged down slightly. Contracts for new homes are roughly flat. However, short sales and foreclosures as a percentage of sales activity increased.  16%  of contracts reported to the MLS for 2010 were flagged short sale or foreclosure. Year to date, 19% of contracts reported are flagged this way.

If you are on the market to sell your home or thinking of selling your home, these statistics are important to consider in your segment of the market. This market is still very price sensitive. Roughly 2 out of every 5 sales is a new home or a distressed sale. Sales activity seems to be leveling off with the tax credit securely in the rear view mirror. Inventory is still in favor of the buyer.  A comparative sales analysis is important, but an absorption rate analysis is just as vital to creating a successful plan to sell your home.

One of the basic fundamentals of selling a home in today’s market is online marketing. Just about everyone starts their search online and spends a lot of time reviewing materials to research their options. A quality online presentation is vital to success.  When consulting with homeowners interesting in selling, I discuss professional photography, listing syndication, video, virtual tours, social media and more.  Once you have made your presentation, the key is to get feedback from it. That is, using the data to follow the traffic online and whether or not is causing showings in person.

I’m fortunate to have a very large listing inventory across a variety of price points and areas. This gives me a wide net to cast over the search traffic to look for insight into the market. Showing activity online proceeds showing activity in person.  You need both of these before expecting an offer. Getting your home on the market is just step 1. To be successful, you have to constantly monitor activity and “read” the market.

Here’s a brief interview I conducted with Jeff Gaffney, Chairman of Better Homes and Gardens Real Estate III yesterday where I touch on how important our relationship with Better Homes and Gardens has been to our online strategies.

httpv://www.youtube.com/watch?v=79vdfrl8KSM&feature=email

I recently wrote a post on Belvedere and why I thought it’s time had arrived. There is another master planned community in the Charlottesville area getting a lot of attention as well. Old Trail Village is a much larger venue, but experiencing success for a lot of the same reasons as Belvedere. There was a recent article written by Charlottesville Tomorrow, picked up by The Daily Progress, on Old Trail’s 2010 success. Read it here.

Old Trail is a little further along in terms of infrastructure and amenity completion, but very young in the grand scheme of what this development will become. The article above has caused a lot of conversations about Old Trail in the past week, so I thought I would break down the sales a little more.

The breakdown below will be of the 61 sales as reported to the CAAR MLS in 2010. Beights Development is reporting 70 sales and closings and I have no reason to doubt that number. The 61 sales represents sales reported to the MLS by contract date. When following new construction stats on an annual basis, you have to choose to look at closed sales or contract dates since there is usually a 4-6 month lag for construction. I choose to look by contract date since that is more of a leading indicator. Custom sales that are not reported to the MLS continue to occur. These sales are usually on the higher end. That is, $500k+. I can identify 4 under construction now just driving through the community.  Old Trail is a place where lower volume, custom home builders are still finding success, since a homeowner can buy a lot and then choose a builder.

The resale market. 13 of the 61 sales were not new construction. Of these sales 2 were short sales and 4 were foreclosures. That’s a relatively large percentage of the non-new construction sales as distressed. I think there are two reasons. Old Trail had a lot of sales at the top of the market and there aren’t many homes for sale here in general.  For example, as of today, there are just 5 resale listings under $1 million dollars.

The new home market. 48 sales. 13 attached and 35 detached. 

Craig Builders is responsible for the townhome sales. 3 story townhomes with 2 car garages starting at $239,900.

Of the 35 detached sales, 5 were under $300k, 11 were in the $300′s, 10 in the $400′s, and the remainder over $500k. The builders included Piedmont Realty and Construction, Craig Builders, Stonehaus Residential, Peak Builders, Eagle Construction, and Southern Development Homes.

This is what I think is key for Old Trail. A wide variety of offerings across a broad price range. Not many communities have pulled this off. If you are interested in the Charlottesville area new home market or Old Trail specifically, I’m here to help you understand your options.  I’ve recently become an Old Trail resident and happy to discuss my personal experience.

I have been involved with Belvedere since working from a tent on Rio Road prior to the roads being paved or any homes being started.  I’ve been a huge fan of the overall concept from the beginning.  New urbanist concepts and a commitment to green building practices are very interesting to me and relevant to the market. I was impressed immediately in 2008 by the number of people I met who thought the concept was great, but weren’t in a position to move.  I knew all along and have shared many times that I think Belvedere’s success is only matter of time.  Here’s why:

1. Location. Its in the urban ring. Right now, there are really no new home communities as centrally located to all things  Albemarle and Charlottesville as Belvedere.  The people I am meeting interested in Belvedere now are making a lifestyle decision to give up the larger, rural lot in favor of a location that saves them time and fits their current lifestyle and the quicker pace we all seem to be living these days.
2. Smaller lots and higher density. Its true, many visit Belvedere and are immediately discouraged by the size of the lots. Its definitely not for everyone. However, many are looking for less maintenance in their lives and maybe, more importantly, community. I’ve learned that the deisgn of a community has a direct impact on the relationships that are  formed among the residents. People are choosing Belvedere because they want to know their neighbors and want to interact with them. I’ve never seen a community of new homeowners come together faster than what I have seen at Belvedere.
3. Energy Efficiency. The green building trends we hear so much about are more than just trends. Its a shift in building science that is here to stay. Better practices in home building are leading to better indoor air quality, lower utility expenses, and more comfortable homes.  Every home at Belvedere is Earthcraft certified.  Stonehaus Development should be commended for this. 
4. Home Design. Another side effect of the economic downtown is a shift in consumer demand. Huge houses are out, and smaller, better designed homes are in. Add in zoning that allows homeowners to earn income with legal residences or businesses over their garage, and you have a recipe for success.
5. Walking Trails. People still want to get outside and exercise. This is an exceptional component, not to mention the future with SOCA and more recreational space.

Watching what has occurred in 2010 at Belvedere, I’m starting to get the feeling the time for Belvedere has arrived. With 31 homes put under contract in 2010, the answer may be obvious. The last 60 days of 2010 saw 12 contracts and the activity hasn’t slowed since. There are now just 33 available detached home sites in Phase 1 remaining.  The new apartment complex (The Reserve at Belvedere) is set to break ground next month. The conversation regarding the town center makes it seem like its time may really be here as well, with unofficial estimates for a late 2011 ground breaking.

There are now 5 builders actively marketing and selling homes in Belvedere:

1. Piedmont Realty and Construction
2. Stonehaus Residential
3. Gibson Homes
4. Southern Development Homes
5. Eagle Construction of Virginia

Home prices start in the $200′s and there is a variety of home styles and types available. There are currently 7 detached “spec” homes for sale. Later this spring, Piedmont will be offering 11 newly developed townhome sites on the Village Green. If you are in the market for a towhome in 2011 and appreciate the concept of Belvedere, these may be the best opportunity of the year.

If you are interested in Belvedere and the prospect of building a new home, I would welcome the opportunity to share my experience and insight to your process to determine if Belvedere is right for you, and if so, how to choose the right builder fit for your budget, timeline, and needs.

If you are interested, one of the original residents is a blogger. Check out her blog here.

I’ve always believed having a solid understanding of the new construction market was vital to understanding the over all market.  One can capture important insights into marketplace demand and trends from following new developements, builders, and even meeting people working a model home. I’ve compiled some data on what occurred this past year in the Charlottesville Area and will share as Part 1 of an over all analysis of the new home market. All data is as reported to the CAAR MLS. While this data is accurate enough to tell the story, historically all new home sales are not reported to the MLS.

The Top 5 – Community Sales – Albemarle

1. Pavilions at Pantops -51
2. Old Trail-47
3. Belvedere-29
4. Montgomery Ridge-14
5. Liberty Hall-12

There are a  few things that are interesting to me when looking at the list of communities and where the sales occurred.  The Pavilions at Pantops represents the majority of attached housing sold and benefitted greatly from its location, price point, and the first time homebuyer tax credit.  However, it is important to note that detached home sales exceeded attached home sales in 2010. This was not the case in 2009. Attached sales in Albemarle dropped from 131 to 108.  In they city the year over year change was 33 in 2009 to 7 in 2010. Significant change. Detached  new home sales were up 64% in Albemarle. (Up from 75 in 2009 to 123 in 2010)

Overall, Albemarle and Greene saw increases in new home sales, while Fluvanna and Charlottesville saw a decline. Here are the top sellers in each of the following localities:

1. Charlottesville : Rock Creek Village 20
2. Fluvanna: Sycamore Square 31
3. Louisa: Spring Creek 20
4. Greene: Greenecroft 12 and Holly Hill 11

Another interesting development was the pace of new home sales in Montgomery Ridge. This is a roughly 60 home community of half acre lots with sidewalks and cul de sacs in the 29N corrider. You have to go to Crozet to find a comparable lot size and value to serve this segment of the market. These 14 sales ranged from the mid $400′s to the high $600′s.  My theory for the sales here is that the builders, led by Piedmont Realty and Construction, were able to adjust there offering to fit the market demand and look better than the resale options on the market.  The opportunity to customize the home and energy efficiency were major considerations.

Old Trail was also a top story of 2010 with 47 sales ranging from the mid $200′s with townhomes, detached homes starting just under $300k, and larger lots for homes in the $500k+ range. A wide range of home types and prices is one consideration, but I think the real story was the arrival of some more infrastructure of the master plan of the community. The golf course has been there, but the pool and towncenter pushed it over the top. People can very easily get a feel for what  this major development might feel like long term. Add the gorgeous environment, more commercial development anchored by Harris Teeter, fabulous public school reputations at all three levels, and lack of development elsewhere in the county, Crozet became attractive to even folks commuting up 29N for NGIC and DIA positions.

Another community I’ve had a relationship with since its inception is Belvedere. Belvedere had a better year than I think most would have predicted.  Still in its infancy in regards to community and master plan infrastructure, zoning that allows legal rental apartments over the garage and green building show that there is demand for this type of community. Energy efficiency is a major trend, and I think all homeowners should be evaluating their homes and considering improvements in this area. Most are amazed at the difference in comfort and cost to operate. However, all trends aside, its the central location of Belvedere that will make it successful at the end of the day.

There are many ways to slice and dice the data. If you are interested in more analysis of the new home market, feel free to contact me. I really enjoy getting to work in the new home market and my relationships with the local builders, developers and trades.  If you are considering a new home purchase, my expertise is helping buyers understand the new home landscape, evaluate their choices, and find the best builder “fit” to get the home they want.

Looking ahead, I’ll share some information on which builders were the most active in our market in 2010 and after that, I’ll outline what’s on the horizon for 2011.

In an effort to watch the activity of short sale or bank owned properties in our market, I’ve started tracking the listings and sales as a percentage of the over all market.  Please see my original post here. 

Please also note these numbers are for short sales AND foreclosures.

The following are the number of short sale and bank owned properties combined for each locality as a percentage of all homes on the market as of 1-2-11 as reported to the CAAR MLS.

Albemarle  68 out of 838 or 8%              Charlottesville 12 out of 233 or 5%

Fluvanna 26 out of 258 or 10%               Greene 26 out of 197 or 13%

The following are the number of sales flagged short sale or lender owned properties combined as a percentage of sales (contracts) for the calendar year 2010 as of 1-2-11 as reported to the CAAR MLS.  For comparison, I put the number of new home sales for each area in parentheses. (I’ve also added the total contracts for 2009 for reference in red.)

Albemarle: 165 out of 1139 (1089) or 14% (231 new homes or 20%)  

Charlottesville: 46 out of 384 (436) or 12% (40 new homes or 10%)

Fluvanna: 68 out of 293 (320) or 23% (50 new homes or 17%)

Greene: 45 out of 235 (210) or 19% (40 new homes or 17%)

I find it interesting that the percentage of these properties in the inventory is much lower than the percentage of these properties that have gone under contract. I think this speaks to the pace these properties go under contract.

I also find it interesting to compare these “bank involved” sales with new homes sales. In other words, I like to see what is impacting the market more. Banks or builders.  It’s relatively close at this point, and its also interesting to see how much of the market is comprised of the two combined.  If you are in the market to sell, I think its important to look closely at your segment of the market and the impact of these sale types. Albemarle County is showing a year over year increase in sales and more new sales than “bank” sales. I attribute this to the attached new home market and how builders were able to meet demand in this segment of the market. Fluvanna and Greene may be explained by higher risk lending practices that catered to price points in those localities.  It will be very important to watch these percentages going forward in our market.

I’m going to break down the new construction market for 2010 and look ahead to new projects on the horizon for 2011 in a future post.

There are lots of good resources for an in depth “macro” look at our market. I prefer analysis as it pertains to specific situations for determining goals and strategies.  If you’d like to find out how I can help you with your real estate goals in 2011, feel free to contact me.