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The Nest Report

Nest Realty's blog, The Nest Report, is a platform to educate the public about the changing Charlottesville real estate market, including community news, industry updates, market reports, and all of the great things Charlottesville, Albemarle County, and Central Virginia have to offer.
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August 2010 Central Virginia Homes Sales Drop…But Not As Much as July.

September 1, 2010 – 9:33 am

So, we’ve had a lot of negative real estate news recently.  Over the last month, we’ve looked at dismal home sales in Charlottesville, Albemarle and Central Virginia in July.  Last week, we got the NAR report on July home sales.  And now, as we turn the calendar to September, we see the home sales continue to slide as compared to last year.  But, let’s look on the bright side: they didn’t drop as much as they did in July.

July 2010 year-over-year sales plummeted across all categories…sometimes 40, 50, 60%…as compared with July 2009.  While we’re seeing drops across the board, they haven’t backed off as much as they did last month.  Hopefully, this turns out to be a positive (b/c we need some positive news).

(Disclaimer: the Aug 2010 sales numbers likely will increase slightly over the next week.  It sometimes takes Realtors a few days to enter in final sales numbers in the Charlottesville Area MLS system…so there is a slight delay in the actual numbers.  While I do expect the sales numbers to bump a little, it’s not going to be a significant jump…maybe just a few sales here or there.)

Overall, total August 2010 sales in the Charlottesville MSA (which Nest considers to be Charlottesville, Albemarle, Fluvanna, Louisa, Greene, and Nelson) were off about 30% from last August (233 vs 162) .  Compare that with the approximate 38% drop in July.  Total inventory increased from 2809 to 2906 – a modest 3% increase.  However, combined with the drop in sales, the total market inventory is almost 6 months higher than it was in August 2009 (12.05 months vs. 17.93 months).

Yet, the increase of inventory between July and Aug 2010 is less (on a percentage basis) than what we saw in July/Aug 2009.  Here’s the stats:

INVENTORY LEVELS

July 2009: 8.89 months
Aug 2009: 12.05 months (35.5% monthly jump)

July 2010: 14.89 months
Aug 2010: 17.93 months (20% monthly jump)

TOTAL MSA DETACHED SALES

Total sales dropped from 169 to 127 year-over-year.  The biggest concern is that inventory popped from 11.48 months in 2009 to 16.11 in 2010 – that’s a 40% increase in monthly inventory levels.

I’m not going to keep re-iterating the same thing in this post.  (We’ll visit some specific sub-categories of the Charlottesville real estate market over the next few days.) Here’s the gist: sales are still down.  We’re suffering a major hangover from the tax credit.  We need to be glad that the tax credit wasn’t extended and the market will continue to correct itself.  How long will it take?  We wish we knew.  But the recovery hinges on a couple of different factors:

1. We need positive employment numbers. It’s going to take a couple of months of positive employment numbers for people to start feeling good about the economy again.  Until unemployment decreases, housing won’t bottom.

2. Inventory levels will need to come down…significantly. Inventory levels in the Charlottesville area are way too high.  14, 16, 18, etc months of inventory is definitely an oversupply.  And oversupply leads to downward pressure on prices/values.

For buyers, there are some values out there.  Admittedly, not all homes are priced according to the current market conditions.  You may have to dig a little, but there are values to be had.  And if you are selling your home, it’s simple: be realistic with price, make sure it’s in top-notch condition, and make sure your home is marketed well.  Houses that fit those criteria are selling.

By Jonathan Kauffmann | Posted in Charlottesville, Market Reports | Tagged , , , | Comments (0)

Are Albemarle and Charlottesville Home Sizes Declining?

August 31, 2010 – 10:12 am

There’s been a lot of buzz resulting from Trulia’s most recent article about the ‘McMansion Era’ ending.  Studies are showing that Americans are wanting smaller homes.  The report states that only 9% of Americans want a home more than 3200 square feet.  There’s two factors behind this:

1. The Green Movement: the big push for energy efficiency and ‘green-built’ homes has caused homebuyers to think twice about how much space they actually need.  At Nest, we hear it every day: do I really want to heat and cool this extra space? With rising energy costs, buyers are very cognizant of the ongoing maintenance costs of the homes they live in.

2. The Market.  Yeah, we know, the market isn’t great.  Anytime you have a major shift in the economy, people take a step back and re-evaluate their needs.  In this case, homebuyers are looking for ways to put less into housing…and the first place to look is moving into a home that is smaller and more efficiently laid out. Back in the 1990s, a big house was a status symbol…not so much now.  We all agree that no one really needs a 10,000 square foot house – but that’s the anomaly.  The big changes are taking place in the cases where a buyer is choosing a 2700 square foot home over a 3200 foot home – maybe that extra bonus space and that 5th bedroom just aren’t that important.

If you are a homebuyer, here’s a thought process to consider: In this example, let’s say that you are looking at homes in the $125/sf price range.  The difference between a 3200 square foot home and a 2700 square foot home could be in the $50,000 – $60,000 range.  That’s a lot of dough.  So, you need to think hard about whether you need 5 bedrooms and an office or if you can be creative with a little less space.

The idea of using space creatively started to catch steam a few years back with Sarah Susanka’s The Not So Big House philosophy.  Honestly, we haven’t seen much of those ideas used in this area with ’spec’ houses.  Especially in today’s market, builders aren’t willing to take major risks on floor plan layouts.  Most of the builders are still trying to appeal to the masses…but I think there is an opportunity (and so does Trulia) for a builder to step into the market with a different type of product.

Locally, we haven’t seen a major drop in home sizes.  We’ve taken the average home built in Charlottesville and Albemarle over the last 8 years to create the following chart:

2003: 2469 sf

2004: 2804 sf

2005: 2873 sf

2006: 2813 sf

2007: 2923 sf

2008: 2755 sf

2009: 2645 sf

2010: 2862 sf

As you see, there was a downward trend in size over the last few years…until we get to 2010.  However, the sample size in 2010 is so small that it may not be a great representation.  We’ll be sure to re-visit this at the end of the year to see what happens with the 2010 number.

By Jonathan Kauffmann | Posted in Real Estate Brokerage | Comments (0)

Montgomery Ridge Home Sales Market Report and Neighborhood Video

August 21, 2010 – 12:01 pm

Located just off of Polo Grounds Road on Route 29, Montgomery Ridge features single family homes on lots ranging from .5 to 1 acre. This secluded neighborhood of 53 home sites has both homes and lots still available. Montgomery Ridge homes are just minutes away from the Hollymead Town Center, Route 29 Shopping, NGIC, GE, and the UVA Research Park. Built by Southland Homes, Ryan, and Piedmont.  Located along the 29 North Corridor.

Sales in Montgomery Ridge have been brisk in 2010.  With the introduction of additional home sites and new builders (which brought along some lower price points), homes have been snapped up at a healthy rate as compared to previous years.  So far in 2010, there have been 14 closed sales…with an additional 5 under contract.  Considering there were a total of 21 sales over the last 3 years combined (including just 1 closing in 2009), Montgomery Ridge has seen quite a jump in sales.

Montgomery Ridge Homes for sale

By Jonathan Kauffmann | Posted in 29 North, Market Reports, Montgomery Ridge, Real Estate Video | Tagged , , , , , , | Comments (0)

Zillow Reports Homeowner Confidence Fell in Q2 2010

August 20, 2010 – 12:31 pm

Zillow reported that homeowner confidence fell in the 2nd Quarter.  Here’s a quick recap of their findings:

- 33 percent believed home values in their local housing market had not yet reached a bottom, while 38 percent believed they had already reached a bottom.

- 28 percent of homeowners said home values in their local real estate market would decrease in the next six months, up from 20 percent in the first quarter.

- 27 percent of homeowners believed their own homes’ values would increase in the next 12 months, 35 percent believed they will stay the same, 12 percent expected a decrease and 26 percent did not know.

And the most telling stat of all, in my opinion:

Despite the increasing pessimism, a large number of homeowners were anxiously awaiting the opportunity to sell.

Indeed, 5 percent of U.S. homeowners said they were very likely to put their home on the market in the next six months if they saw signs of a real estate market turnaround.

Zillow said this translated into 3.8 million homes with the potential to come into the market. By comparison, 5.2 million existing homes were sold in all of 2009.

So, what does this mean for the Charlottesville real estate market?  It’s sometimes tough to translate national surveys and statistics to our local market in Charlottesville and Albemarle County, but here’s my take:

1. Consumer confidence is a huge driver in price.  If buyers are confident that the housing market will recover (or if prices are on the rise), then they’ll talk with their wallets and start buying.  On the flip side, if they are unsure or pessimistic on the market, then they’ll either hold off on buying or will attempt to buy a home at a price they perceive to be market value (not necessarily where a seller sees market value).

2. If 5% of homeowner’s are truly going to list their homes if they see a bump in the real estate market, we may be in for a longer recovery than expected.  Here’s the reason: basic supply and demand is a major factor in the real estate recovery.  If supply of Charlottesville homes for sale all of a sudden jumps as soon as we see a small turnaround, that would increase the amount of inventory of Charlottesville real estate…and thus slow down a recovery.

At this point, this is all theory.  We can analyze and debate it until the cows come home without coming to a firm conclusion.  But it’s good to keep our pulse on the situation.

By Jonathan Kauffmann | Posted in Real Estate Brokerage | Tagged , , | Comments (1)

Barracks, Rio, 29 North, and Earlysville Home Sales Holding Through July

August 19, 2010 – 9:22 pm

With the fairly significant drop in home sales throughout Charlottesville and Albemarle County in July, many sellers are beginning to become wary of their ability to move their home in 2010.  Some pockets of Charlottesville continue to chug along, though.  Real estate in the Albemarle High School District (which includes Barracks Road, Rio, 29 North, and Earlysville) saw a slight drop in July home sales, but held pretty steady overall.

August 2008 – July 2009

Home Sales: 227

Median Sold Price: $335,000

Months of Inventory: 12.52

August 2009 – July 2010

Home Sales: 295 (up 29.9%)

Median Sold Price: $340,500 (up 1.6%)

Months of Inventory: 9.60 (down 23.3%)

Clearly the last 12 months has proven to be a positive time for home sales throughout Barracks, Rio, 29, and Earlysville.  However, as we have discovered, just about every segment of the Charlottesville real estate market has seen a large jump in sales during that same period.  The positive trends seem to stop in July, where sales have been down significantly from the previous July…sometimes over 60% off.

But while sales in the Albemarle HS district were off, but not as much as some other segments of the Charlottesville and Albemarle real estate market.  Overall, home sales in July were off 21% from the previous July (30 vs. 38).  However, the percentage of list-to-sale in July 2010 was up significantly from July 2009 (95.18% vs. 85.52%).  That’s a fairly dangerous number to pin positive hopes on though.  As we’ve talked about before, the list-to-sale ratio can be gamed a bit and isn’t always completely reliable.

The increase in jobs from NGIC hirings may be a factor helping to prop up this segment of the market.  While the total number of NGIC jobs will not keep the Charlottesville real estate market alive by itself, it certainly won’t hurt.  Those jobs have been a nice shot in the arm to the market over the last year…and the additional jobs over the next year will assist in our local real estate recovery.

Earlysville Homes For Sale

29 North Homes For Sale

Albemarle Real Estate

Charlottesville Neighborhoods

By Jonathan Kauffmann | Posted in 29 North, Barracks, Earlysville, Market Reports, Rio | Tagged , , , , , , , , | Comments (0)

Western Albemarle Single Family Home Sales

August 12, 2010 – 12:28 pm

If you’re a loyal reader of the Nest Report, this post may sound a little familiar to you.  To give a little background, we’ve been scouring through Charlottesville real estate market data from the first 7 months of 2010…and comparing sales statistics to year’s past.

This time, we’re taking a look at single  family home sales in Western Albemarle.  As with our other recent data, year-over-year Western Albemarle home sales are up significantly.  Here’s the rundown:

August 2008 – July 2009

Home Sales: 190

Median Sold Price: $477,500

Months of Inventory: 14.96

August 2009 – July 2010

Home Sales: 239 (up 25.8%)

Median Sold Price: $400,000 (down 16.2%)

Months of Inventory: 10.89 (down 27.2%)

The combination of the tax credit and lower prices definitely spurred home sales throughout Charlottesville and Albemarle during the first half of 2010. However, as we’ve noted before in our market reports, July 2010 sales dropped significantly in Western Albemarle (from 32 in 2009 to just 17 this past July).

So, it seems like no matter where we look, the story stays the same.  On the bright side, sales are up significantly over the most recent 12 month period.  But sales in July are down significantly year-over-year.  We’ll see how August and September play out.  By all accounts, we expect sales to be off from last year.  But we’ll have to wait and see.

(Note: Western Albemarle is made up of Crozet and Ivy)

To see current listing inventory:

Crozet homes for sale

Ivy homes for sale

By Jonathan Kauffmann | Posted in Crozet, Ivy, Market Reports | Tagged , , , , , | Comments (0)

Albemarle County Attached Home Sales

August 9, 2010 – 7:21 pm

The homebuyer’s tax credit continues to show some positive effects on sales throughout Central Virginia.  The latest benefactor seems to be attached homes in Albemarle County.  (In this area, attached tends to refer to town homes and row homes)  Sales of attached homes in Albemarle County are up 20% year-over-year…quite a jump considering many people predicted attached homes would suffer almost as much as condominiums.

From Aug 2008 to July 2009, here are the quick stats of  attached home sales in Albemarle County:

Total Sales: 255

Median Price: $240,000

Months of Inventory: 8.84

Check out the statistics from Aug 2009 to July 2010:

Total Sales: 305 (up 20.3%)

Median Price: $231,490 (down 3.5%)

Months of Inventory: 5.51 (down over 37%)

Pretty amazing real estate stats…we’re surprised on one hand because many of us predicted (as has been the case over time) that single family detached homes sell quicker and hold their values more.  On the other hand, attached homes are less expensive than comparable single family homes…and since price is a market driver AND the tax credit was geared towards first time homebuyers, attached housing in Central Virginia has benefitted.

We’re not at a point where we feel confident that values will be increasing anytime soon…but the fact that there are only 5.51 months of inventory in this category is a positive sign for the marketplace.  We do think the months of inventory will rise…purely based on the fact that we’re seeing fewer buyers in the marketplace.  As we have discussed before, home buyers of single family homes, attached homes, and condominiums throughout the Charlottesville region rushed to make their home purchases prior to the tax credit expiration.  That rush didn’t necessarily ‘create’ a lot of new buyers…but instead moved up a lot of buying timelines to the first half of the year.

We’re definitely seeing the effects of a slower market now.  For example, in July of 2009, there were 49 attached home sales in Albemarle County.  In July 2010, there were just 18.  That’s a mighty hefty drop.  So, we’ll keep an eye on the market to see how much the second half of 2010 slows from the first half.

Crozet town homes for sale

Albemarle County town homes for sale

By Jonathan Kauffmann | Posted in Real Estate Brokerage | Comments (0)

Old Trail Home Sales On The Rise

August 8, 2010 – 8:15 pm

With a fair amount of uncertainty in the Charlottesville real estate market, there are still a few bright spots.  Located in Crozet, single family home sales in Old Trail over the last 12 months are up 60% from the previous 12 months (24 vs 15).  Construction activity is up with a combination of custom homes and spec homes from a variety of Charlottesville builders.

In addition to sales being up, Days on Market for single family homes in Old Trail has dropped from 199 to 73 over the last 12 months.  Months of inventory has also fallen dramatically – from 17.6 to 8.5.

There are a few factors that are playing into these numbers.  First of all, the Old Trail Village Center and community pool were completed last spring and summer.  These 2 amenities were long promised and removed a bit of uncertainty from skeptical buyers.  Second, a new line of smaller, more affordable homes from Craig Builders, Piedmont Construction, Eagle Construction, and some other builders has offered more options to potential buyers.  Lastly, prices of lots and homes have come back down to earth..making the entire neighborhood more affordable.

The median single family home sold in Old Trail during the period from Aug 08 to July 09 was $618,000.  However, that number dropped to $467,500 from Aug 09 to July 2010.  This drop in median sale price is mostly attributed to the new housing options in the $300k range…something that wasn’t available in years past.

Expect the median home sale price for single family homes in Old Trail to continue to drop over the next year.  The majority of activity will be centered around it’s newest phase in the Village Commons…which features homes in the high $200s and low $300s.  While the Upper Ballard and Creekside sections feature higher priced homes, lot prices have come down a fair amount in those areas and the $800k+ sales will be few and far between.

By Jonathan Kauffmann | Posted in Crozet, Market Reports, Old Trail | Tagged , , , , , | Comments (0)

Forest Lakes Neighborhood Video

August 4, 2010 – 4:32 pm

With approximately 1,400 homes, Forest Lakes is divided into two main sections – Forest Lakes North and Forest Lakes South. Community amenities include: six beautiful lakes, wooded lots, miles of walking/biking paths, two large swimming pools, two basketball courts, 10 tennis courts (8 lighted), two soccer fields, and a fitness center. Some Forest Lakes homes also have beautiful mountain or water views. Forest Lakes real estate options include single family homes and townhomes. Residents in some areas of the neighborhood can walk to shopping and dining, but all residents are a quick drive to Hollymead Town Center. Forest Lakes is a popular option if you are looking for NGIC real estate choices.

As of August 4, 2010, there are 24 homes for sale in Forest Lakes.

Nearby areas include:

Charlottesville real estate

Earlysville homes for sale

By Jonathan Kauffmann | Posted in 29 North, Forest Lakes | Comments (0)

Albemarle Single Family Home Sales July 2010

August 3, 2010 – 2:22 pm

The last 12 months (8/09 – 7/10) of single family home sales in Albemarle County show a big jump over the previous 12 months (8/08 – 7/09).  The most recent 12 months reflect an over 16% jump in total Albemarle County single family home sales (717 vs. 616).  However, sales in July of 2010 dropped off a cliff compared to July 2009 (107 vs. 58).

Clearly, the end of the homebuyer’s tax credit has affected sales as buyers were rare in May and June of this year.  The tax credit did seem to stimulate some activity during the first part of 2010.  In fact, July was the first month in which total sales in 2010 did not outperform total sales in 2009.  Every other month in 2010 produced higher sales than 2009.

Inventory levels of homes continue to climb throughout the region.  In July 2010, there were 814 single family homes for sale in Albemarle County…as compared to 761 in July 2009.  Since sales in July dropped and inventory increased, the months of inventory in July almost doubled…jumping from 7.11 to 14.03.  That represents the biggest monthly increase since this past December-January.

Though buyer activity level in the market has increased in the last 30 days, contracts are down from 2009 levels and inventory seems to be increasing.  As the summer buying season begins to come to a close, I would expect to see monthly inventory levels to start climbing from the current levels (around 14 months) to 17 or 18 in the next month or two.  (This is fairly typical since there are fewer buyers and serious sellers don’t begin to take their homes off the market until around Halloween).

Stay tuned over the next week and we’ll take a closer look at some of the areas within Albemarle, including Ivy, Crozet, and 29 North.

By Jonathan Kauffmann | Posted in 29 North, Barracks, Crozet, Earlysville, Ivy, Keswick/East, Market Reports, Rio, Southside | Tagged , , , , , | Comments (1)