Posts Tagged ‘real estate market’

A little over a week ago when I heard NAR was revising their national data, my immediate reaction was… so what? I commented to a colleague that if I challenged them to find an agent with a client that referenced national data when making a home buying or selling decision, they would have a difficult time locating one. I have never had a client reference this data.  I assume there is going to be a lot press surrounding these numbers. While these numbers are going to change, and the numbers of sales is going to decrease, I don’t think it really matters to the overall market. This conversation is far too local and we have far better data available to us in our local MLS. For example, when we tally the numbers, we are going to see more homes sold in 2011 in Albemarle and Charlottesville than did in 2010.

Here is some commentary on this topic from VAR and CNBC for reference.  The data will be release on December 21. (Tomorrow at the time of this post.)

It’s important to understand your segment of the market. I gain a lot of my insight into the marketplace through my relationship with Piedmont Realty and Construction. Understanding the new home market is vital to understanding the overall market. 2011 is going to go down as the worst year in homebuilding since they started keeping records 48 years ago. The number of homes built in 2011 will be just 14% of the number of homes built in 2004. 6 out of 10 privately held home building business that were in operation in 2004 no longer exist.

Piedmont Realty and Construction launched in 2009. In 2011, they will contract for over 70 homes and close over 70 homes in this calendar year. This is truly remarkable and incredibly relevant to our market.

A lot has changed since 2004. The business model is different. Demand has changed. Construction methods to achieve energy efficiency is here to stay. We take orders for new homes now and speculative building is all but gone. I think this is a good thing. I gain an incredible amount of knowledge and insight in to this market by being exposed to all of those sales. Each sale is a tremendous amount of market data. Why did they choose to build? What was the floor plan type chosen and why? What features are most important? What locations are in demand and why? I could go on and on. The order for a new home is the leading edge of demand in the market place. I balance that against my analysis of the resale market and my experience helping buyers in seller in the overall market.

If you are interested in buying or selling in the Charlottesville area real estate market, I am interested in that conversation. Feel free to contact me if you would like to learn more about my approach to helping my clients make the best decision possible in the context of their situation.

The quarterly report on our area real estate market is out. CAAR 3rd Quarter Market Report

There is not a lot of big news in this report. Our market has been meandering along for a few quarters now and we are seeing a continuation of those trends.

1. Inventory continues its slow decline. It’s hard to identify a direct cause. Some are waiting, some are renting, etc.

2. The pace of sales year over year is relatively constant. See report for exact numbers.

3. Median price continues to be seasonal and trending lower year over year.

While we often refer to this market as the new normal, I personally believe there is still pent up demand in the marketplace and sales activity is lower than what I think will experience when we get past all of the hardship caused during the recession.   The tough part of the equation is determining the pent up need to sell. I meet a lot of people who would like to buy or sell but just can’t make it work right now.

 I continue to watch distressed sales and new home sales a percentage of the overall market. For the immediate Charlottesville area closed sales through September, short sales and foreclosures represent 16% and new homes represent 15%. Year over year the distressed sales have slightly increased (+2%)as a percentage of all sales and new homes (-2%) have slightly decreased.  Basically, the banks and builders are getting 3 out of 10 sales in the area. (Charlottesville, Albemarle, Fluvanna, and Greene) I think watching these percentages and they way they are trending is important to understanding our market. 

This market is very local and very personal. Whether you are considering buying or selling, take the time to fully understand your options in your segment of the market. I talk to people every day who think they know what is going on, but have not really looked closely at the data and/or comparable sales.

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’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.

My real estate path has been diverse since moving to Charlottesville and entering the business in 1996. I’m lucky. I feel fortunate to have so many perspectives to shape the way I advise my clients. Lately, I am meeting with more potential homeowners interested in selling in 2011.  After 3 years of a difficult, transitioning  market, many are much more informed and more realistic in their goals. When I meet with prospective listing clients, I try to give them a framework for setting goals.   If someone has goals that I cannot achieve or find unrealistic, I let them know.  For some this means staying put, for others it means renting. 

Step 1:  Start the conversation early. Get someone to evaluate your home’s presentation. Get familar with your market and start following comparable listings.  Make a plan and get completely prepared before going on the market.

Step 2: Set a offering price that is realistic and supportable.  You are trying to cause showings in the hopes someone will be interested enough to make an offer and purchase your home.  Buyers are well informed and many have been looking for months or years. Starting too high to test the market is not a good strategy.

Step 3: If you really need to sell your home and are planning on this spring as your time to list, consider a pricing strategy based on a 90 day (or less) absorption rate.  If there are 10 homes in your price range and location for sale, and only 4 sold last year in the same 90 day period, position yourself in the top 4 in both price and presentation.

Step 4:  Once you list, read the market.  I am telling the people I am talking to now that we determine a range of value and work on getting the home ready, but we can’t be 100% certain of a list price at this time. Homes are going to start coming on the market after the new year and the pace should increase heading into the spring.  Analysis does not stop when you list your home. It starts. Read the market. Watch new listings, price changes (you may cause a few that changes things right out of the gate), closed comparables, and maybe most importantly, what is put under contract while you are on the market.

In general, selling a home in 2010 is going to be very competitive.  When hired by a homeowner to sell their home, my goals are simple. Sell their home in the shortest amount of time for the most money possible without legal entanglements.

It’s been a while since I’ve posted. I had a great trip with the family to Disney World and guess what? I’ve been extremely busy. November and December are usually a little quiet for me and offer the opportunity to focus on planning for the year ahead. I also like to try and take advantage of more family time as well. Not this year. Something is going on in the market and I have not been able to get my brain around it. I just took a minute to try and quantify what I was “feeling” about the market by pulling some stats.

First, here are some anecdotal events that shape my feelings:

1. Piedmont Realty and Construction had 10 new home sales in November and 8 so far in December.

2. I had a client lose out on a home they wanted last month in a multiple offer situation.

3. I helped a client get under contract today on a home that had been on the market 182 days. There were 3 offers on the table.

4. I am talking to many in the business who are “feeling” this spike in activity.

I pulled some quick year over year contract stats to see what story they told.  Just looking at Albemarle and Charlottesville, October was significantly down. But confirming my “feelings”, this is what I found for November and MTD December:

Albemarle County  NOV 2009 64 vs.  NOV 2010 91   MTD DEC 2009 24 vs. MTD DEC 2010 47

Charlottesville  NOV 2009 20 vs NOV 2010 25  MTD DEC 2009 9 vs MTD DEC 2010 13

I realize the numbers for Charlottesville aren’t startling, but its been a while since there has been a year over year increase in sales in the city. I think the uptick in Albemarle is definitely noteworthy. Its hard to pinpoint why this may be occurring, but I think whenever the market is supressed for long periods of time it creates pend up demand.  There’s no doubt it’s there.  Maybe its a fluke. Maybe its those watching interest rates realizing they can’t stay down forever and really aren’t heading below 4 percent. I had one person speculate today it was confidence over talk about tax break extensions. I’ve always thought if the circumstances were right, the winter was a great time to buy. There are often less buyers in the market and usually more motivated sellers on the market, as many pull their homes off for the holidays.  “Thinning” the herd of the less motivated participants in the market may have cleared the way for the most motivated to do business.

The end of the year is near and soon it will be time to take a look at 2010 vs 2009. I look forward to digging a little deeper. I also intend to update the stats I have been keeping on the distressed sales in our market place to identify potential trends as well.

If you’d like to have a conversation about your real estate plans in 2010, feel free to contact me. I enjoy the conversation.

The CAAR 3rd Quarter Market Report was released yesterday. Read it here.

For those of us fully immersed in this market, these quarterly looks  at the sold data mostly confirm what we already know. There are some key indicators worth following for a basic understanding of things, but we do have to get more specific to get a feel for where we are headed or to give sound advice for those in the market to buy or sell in the near term.

Looking back at the past 3 quarters, it is clear that the Home Buyer Tax Credit had an impact on things. If nothing more than moving sales up in the year. Q2 showed a 19% increase year over year that has returned to 3.6% after Q3. When we look at 2010 in its entirety as compared to 2009, I think they will look very similar in terms of numbers of closed sales.

This report also shows that median area prices have not changed much since last year. I don’t put a lot of weight on this statistic due to the broad range of property types and values in the area. However, it will be interesting to watch going forward in its current context. It will also be important to monitor the impact of the news circulating about banks and improper foreclosures.

The inventory levels are probably the most telling indicator. There’s simply too many homes on the market for this market to be considered balanced.  Homes will continue to seasonally come off the market to become rentals or to try again in the spring market.  Days on market is 40 days lower for properties sold vs properties on the market. Price per sq foot is significantly lower for properties sold vs properties on the market. These two indicators cleary identify this market as price sensitive.  Buyers want clear evidence what they are buying represents value in the marketplace.

Its hard to explain the numbers in the City of Charlottesville. For one, Charlottesville is lacking a new town home development to replace sales of 2007-8.  Albemarle has one or two projects serving this important segment of the market.   A segment spurred on by the tax credit. Otherwise, moving closer in seems to be a trend, but the inventory of Charlottesville does not just seem to meet the needs of the market at this time. Maybe its pricing. Maybe its energy efficiency. Maybe its dated homes in need of renovation. Most likely its a combination of all of the above.

My advice remains constant. If you need to sell or are considering a purchase in the near future, seek specific, competent advice in the context of your situation, balanced with your motivation. Find someone who will tell you what you need to hear as opposed to what you want to hear. It is possible to sell and reposition for the long term in this market if you are compelled to do so. I meet many who are considering this option on a regular basis.

Update. The Daily Progress covers the report here.

The home is done and the walk through is complete. The new homeowners will move in later this week. Instead of walking through this home and trying to capture it all on video, I’ve decided to post a virtual tour with some quality photography. That happens this week. So if you have been watching this home get built week by week, the finished product will be available to see later this week. In the meantime, I put together a series of clips through out construction, concluding with a walk around the exterior of the property.  From ground breaking, Piedmont Realty and Construction build this home in 12 weeks.

This video documents the progress of Week 9 of construction.  It marks a very important stage of the process. Cosmetic finishes start to appear and the homeowner gets to the see their selections start to give the home its feel.  In this video, cabinets arrive, ceramic tile is installed, custom built ins and shelving are installed, and mechanical finals begin.

The pantry in this home is amazing and is an example of how this process can create spaces that fit they way people live.  Its a pretty good feeiling to move into a home that is exactly what you want and need for your lifestyle. Its very rewarding and a result of the collaborative process created by Piedmont Realty and Construction.