Are People Willing to Accept the Realities of the Current Market?
April 12, 2007 |
It’s about that time again. . .time for the first-quarter real estate sales statistics for the Charlottesville Area. What I found didn’t surprise me, but I wonder if people will take it to heart. . . more on that in a bit; but for right now, here is the raw data:
March 2007
March 2006
Breakdown
I found the March statistics to be interesting. Interesting because they are so varied when you compare them to March of 2006. While the overall numbers may have been down, I don’t think you can call it a decisive shortfall by any stretch. Albemarle and Fluvanna remained virtually unchanged from March ‘06. Charlottesville and Greene were the biggest losers (down 27% and 29% respectively), while Nelson actually saw a 25% increase. The overall result was a 9% decrease in the number of closed transactions from March 2006– not all that bad. On the flip side, the average DOM (Days on Market) is still much higher than last year. The Charlottesville area average DOM jumped almost a full month compared to March of last year. This seems to suggest that the market is settling down a bit, not really moving much up or down, but it will take a few more months to see if that holds true.
First Quarter 2007
First Quarter 2006
Breakdown
The comparison between the first quarter of 2007 and the first quarter of 2006 is interesting because the two periods parallel each other. In a way, the two quarters are the same, but different. They are the same in that the total number of sales by area for March of each year is very close to, or a little bit above, the per-month sales average for the quarter. In looking back over other years, this is very typical, since March usually signals the beginning of the prime selling season.
The differences in the two quarters are in the DOM and the median sales price. As expected, DOM for 1Q07 was up a just more than a full month compared to 1Q06. With the volume of homes on the market as high as it is, this should not come as a surprise to anyone. The other major change is the median home price. The Charlottesville area 1Q07 median is down 8% compared to 1Q06. The biggest losers of the bunch are Albemarle and Nelson counties; the median in those counties is down 13% and 24% respectively, over the first quarter. The City of Charlottesville was down a little less, about 9%, while Fluvanna and Greene saw slight increases in the median.
Where does this leave us? I think that the best analogy here is an automotive one. When you are on the interstate rolling right along at 80mph or so, life is good. Then, you get off the interstate and travel on a road that is 55 mph. For the first few miles, everything seems to be going in slow-motion. You may even get a little anxious over your lack of rapid progress. In reality, you are traveling the speed limit, but it just feels slow.
That is how I would describe our current real estate market. It just feels slow. The reality of the situation is that homes are selling, and the bottom has not fallen out with regard to prices (as some may have predicted). The fact is that the market we are currently experiencing is the market that is here to stay for the foreseeable future. Inventory will remain high, DOM will probably remain in the 2-3 month range, and prices aren’t going to appreciate at a 15% per year rate anymore. The point is, that’s ok.
What needs to happen is that people need to adjust to our new 55-mph market. If people will simply prepare for the current market, rather than for a market that is long gone, everyone will have a much easier time. The first few miles are behind us, it is time to settle-in and drive.
[tags] real estate, realtor, charlottesville, virginia, albemarle, fluvanna, greene, nelson, real estate statistics, housing statistics [/tags]
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Disclaimer
My name is Daniel Rothamel. I am a licensed real estate agent in the Commonwealth of Virginia and a member of the National Association of REALTORS. As such, I adhere to a strict code of ethics and all laws with regard to equal housing, which is reflected in the content of this blog. My broker is Strong Team REALTORS, 86 Joshua Lane, Palmyra, VA 22963; (434) 589-5800. My VA Real Estate License number is 0225 077325. All of the opinions in this blog are mine, unless otherwise noted.
