I was contacted by NBC29 this past week to share my thoughts on the market. The reporter was equipped with the year over year stats for the month of July and interested in my thoughts on why sales were down so much from a year ago.  It’s true. The sold data for July 2010 is much lower than July 2009.  I appreciate the attempt of the newspapers and television stations to report on the market, but I’ve never found that these media outlets  do the topic justice and can often be misleading. ( I also don’t like to have my comments edited and framed by the interviewer after the fact.)

For example, although July sales were off, June 2010 sales were significantly up. I’m not sure that means much either. Since the downturn in the economy, not much has been normal.  In the absence of a period of data that is uninfluenced by historically major events within the economy, forecasting remains challenging.

Forecasting demand is important in trying to determine an absorption rate. This type of analysis can be very important when pricing a home. Taking into consideration how many sales may occur over a period of time and putting your home in a position to be one of those sales is vital to success. This is one example of the more specific analysis I provide my clients.

As for the bigger picture, here’s what we know. 2009 started slow and showed signs of improvement throughout the year. 2010 started stronger and sales activity has decreased since the expiration of the tax credit.  As of the end of July, closed transactions in Albemarle County are up 15% as compared to the same period in 2009.  It will be interesting to see how the year finishes up, but its likely for our market that 2009 and 2010 will look the same or nearly the same in terms of the number of sales. (The city of Charlottesville is the exception.)

The challenge I find is a point of reference to measure these numbers against. The real estate market has been unbalanced for the last several years and remains unbalanced now.  I think the rest of this year will be very interesting to anyone who follows our local real estate market.

So what does all of this mean? The economic stimulus had a significant impact on our market. Low interests combined with the tax credit caused the release of some pent up demand from2008/2009. We will need to continue to watch the median area price and inventory levels. Until the inventory is significantly reduced, there will be downward pressure on property values.

All of the macroeconomic analyisis aside, if you need to interact with this market in the near future, seek competent advice. Collect information pertinent to your situation and use this information to make a decision that rights for YOU.

My basic advice to potential buyers: Make sure buying is the right decision for you. Educate yourself to what it means to buy a home and what is available in your price range. Follow some of these properties to see how fast they sell and at what price they sell. There are opportunities in this market.

My basic advice to potential sellers: Price your home correctly to start. This is the mistake that could hurt you the most, especially if you really need to sell. If you don’t need to sell right now, consider not putting your home on the market.

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