Posts Tagged ‘charlottesville virginia’

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.

In the last video, we discussed the structure and how it was insulated. In this video, we talk about what I like to think of as the “engine” of the home.  Piedmont has partnered with Trane for their HVAC equipment. Very important.

The conversation regarding energy efficiency and how to improve the Piedmont Realty and Construction  “Earth Friendly” home is on going. Since Piedmont launched in 2009, their offering has improved along the way. (That’s one of the things I like most about working with Piedmont. They are constantly looking to innovate and improve their standard specifications.) Drew Holzwarth and I have made a series of videos to try and explain some of the core components they use to create an energy efficient home.

Here’s Part 1.

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.

Please note. The term “Earth Friendly” is trademarked by Piedmont Realty and Construction as their branding for the way they achieve energy efficiency in the homes they build.

It was 2007 when a few of our local area home builders started utilizing new building sciences to achieve energy efficiency. Lots of different materials and methods were being tried and there was definitely a learning curve.

Regardless of the methods at the time, I was impressed immediately. I can remember spending winter mornings in my home built in 2003 and afternoons in one of these brand new energy efficient homes. The difference was maddening. I wanted to tear down my 4 year old home.  My home felt drafty and uncomfortable by comparison. This was before there was any real data regarding energy cost savings.

Fast forward to 2010, and I finally got my new energy efficient home. Living  in this home since September, I have now experienced Fall to Winter to Spring.  I am constantly looking for ways to share what it is really like to live in a home built this way.

The analogy that comes to mind is from the auto industry. I am interested in energy efficient cars too. We own a VW TDI (Clean Diesel). The best way to describe this 40MPG avg vehicle is that it sips gasoline. Hybrid is the other new car technology and by far more well known. I test drove a Prius for 24 hours last month. This car achieves 50MPG by switching between battery power and gas. What I didn’t realize was how it operated in start and stop and slower speeds. Sitting at a stop sign, the car simply does not run. It is the savings from not using any gas at all that brings the MPG way up.

Now back to the “Earth Friendly” home.  I was reminded of the Prius over the last couple of months. When discussing the Earth Friendly home, we always start with the way the home is insulated. The structure is foamed in to “seal the envelope.” I’ve heard it described  as building an igloo cooler. When the home is heated, it holds the warmth longer. When the home is cooled, it has the same effect. In the Spring and Fall in the area, we have warm days and cool nights. Not unlike a Prius at a stop sign, this is when the savings start to add up. We turned our heat off after the first few above 70 degree days. With warm days and cool nights, I noticed our HVAC was not running at all. Over night, the home held its heat acquired during the day.  Essentially, for the past two months this home as pretty much held a range from 68-72 with virtually no support from the HVAC. This is where the savings really start to add up.

I am collecting data on two homes for comparison. More below. I don’t have enough to share the results in their entirety. However, I was so impressed by the early data, I felt compelled to start telling this story.

EARTH FRIENDLY HOME A: Built 2010, 3400 finished sq ft, Two zone Trane HVAC, (Zone 1 gas furnace), tankless gas water heater. This home also has a finished space over the detached garage with its own electric HVAC system not run full time.

NON-EARTH FRIENDLY HOME B: Built 2000, 2995 finished sq ft, one zone electric HVAC system, traditional electric water heater.

Since there is gas involved in one of these homes and not the other, we will look at the winter months when more data is available on the cost of the gas consumption.

HOME A electric bill March $115, April $98 for a total of $213.

HOME  B electric bill March $200, April $180 for a total of $380.

More to follow.  Feel free to contact me to discuss any of this in greater detail.

Just a little past their two year anniversary, Piedmont Realty and Construction is expanding their offering.  This is consistent with why I think they have been successful.  Drew Holzwarth continues to innovate and stay relevant.  More on the new offering in a moment.

Tracking new home sales in the area, I see Piedmont continuing to grow their market share.  One reason is innovation. Piedmont is constantly trying to improve their offering. The latest innovation? Every Earth Friendly Piedmont home now comes standard with a Trane hybridHVAC system. This is remarkable and going to save their owners thousands of dollars over the life of the home.  Other 2011 improvements include quiet close cabinet doors, new double hung low-E windows, and tank-less water heaters.

Another reason for their continued success is finding segments of the market under served and customizing an offering that adds value to that segment of the market. I refer to this as staying relevant. Even after two years, I find myself impressed by the depth of experience that allows them to stay relevant.

This brings me to the topic of this post. Piedmont Realty and Construction is developing and introducing what will be known as their Estate Series of homes. Starting with the Keswick (tour below), Piedmont is now serving the $800k-$1.5M range by offering custom homes in Albemarle County communities like Glenmore, Ragged Mountain Farm, South Ivy Estates, and Old Trail. With two homes over $1M currently under construction in Old Trail, Piedmont is proving their capabilities once again in this new price range.

Check out The Keswick.

I saw this article on the Virginia Association REALTORS blog this morning and wanted to share. Written by a REALTOR from the New River Valley, its a nice conversation starter regarding home inspections.

Check it out here: Home Inspections

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 have lots of ideas for information I’d like to share via this forum. Sometimes I struggle to find the time or the energy to organize my thoughts and get them posted here. There is a lot going on right now. I wanted to take the opportunity to share some information I have come across networking with agents, builders, buyers and sellers over the last 30 days. Most of my insight comes from client specific analysis rather than exploratory macro analysis. I find it to be much more telling as I attempt to give advice that will help my clients achieve their goals. In no particular order:

1. There are a lot of sellers and agents in preparation mode for the Spring Market. The story of this year will be told by the pace of new listings coming to the market, the pricing of this inventory, and the reception of these new listings (and their pricing) by the buyers in waiting.
2. There is absolutely pent up demand and buyers in waiting. One barometer I use are the statistics provided from the 30+ virtual tours I have living on the internet at any point in time.  Average total views: NOV 131 DEC 100 JAN 315….First week of FEB 602. 
3. I talk to a lot of agents who advise their sellers to wait to list. I advise the opposite. The main reason is that I want my seller clients to be ready so we can hit the market with our best presentation when we want to hit the market. The first showing of your home is online. I am constantly disappointed in the presentation others are making online. Its vital to selling your home in a competitive environment. The online showings start before the in person showings. Be ready.
4. January Contracts 2010/2011  Albemarle 79/91  Charlottesville 31/24  Fluvanna 27/26  Greene 15/15 
5. January New Listings 2010/2011  Albemarle 200/188  Charlottesville 75/49  Fluvanna 102/70  Greene 42/48
6. Sales vs. New Listings is a indicator I will follow closely this year.  Absorption rate may be the most important factor if you are a motivated seller that NEEDS to sell.
7. There have been a similar number of sales in the $1M-$2M range each of the last 3 years. 2008-35  2009-28 2010-31.
8. In the 90 days of NOV-JAN, there were 23 new home (detached) contracts in Belvedere. 15 were with Piedmont. I’m still trying to figure out what this means and keep a close eye on new home sales numbers. In my opinion, the last 90 days have caused upward pressure on new home pricing. I have already noticed “pockets” of increased values in unimproved lot values. Unimproved lot values and new construction leads the way.  This could be seasonal and temporary.
9. Many of the buyers I am meeting are evaluating their options as they pertain to renting vs. buying.
10. With 3 reservations “pre-marketing”, I think the 11 new townhome lots of Belvedere are the best townhome opportunity of the spring market. I think Avinity is going to be well recieved as well.
11. Last year in Western Ridge, roughly 1 out 2 listings actually sold. It’s still a very, very competitive environment to sell a home.

So that’s my update for now. I’m not trying to draw any conclusions here or make any predictions. Understanding this market is an ongoing conversation. Feel free to contact me for a discussion on any topics important to you and your situation.