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2004
Year-End Market Report
By Dave Phillips, CAE, Charlottesville Area Association
of Realtors
For
the sixth year in a row, home sales in the Charlottesville market
area have set a new record. According to figures from the CAAR Multiple
Listing Service, 4,050 homes were sold in the Charlottesville market
area (including the counties of Albemarle, Fluvanna, Greene, Louisa,
and Nelson, and the City of Charlottesville) for the year 2004.
Sales in 2004 were up an astonishing 15.1% from last year's record
pace.
Each
month, CAAR publishes market statistics on the number of transactions
closed, the number of listings that went under contract, the median
sales price, the average days on market, and the number of new listings.
These figures are tallied every quarter on a year-to-date basis,
and are compared to the same information from the previous year.
Transactions
Closed
As
stated above, 2004 was the sixth year in a row that we set a new
record for transactions closed in the Charlottesville area. CAAR
had forecasted that 2004 would be another record year, but the amazing
increase of 15.1% was not predicted. All market areas showed double
digit growth except Nelson that was up a solid 6.7%. Albemarle was
the top sales area with 1660 sales for the year, which was an increase
of 11.3% (169 total sales) from last year. The city of Charlottesville
saw the sharpest increase in sales for the second year in a row
with 533 (up 24.2% or 104 sales). Closed sales figures for other
areas were Fluvanna 651 sales (up 17.3% or 96 sales), Greene 301
(up 18% or 46 sales), Louisa 178 (up 13.4% or 21 sales) and Nelson
382 (up 6.7% or 24 sales).
Under
Contract
Properties
that are "under contract" are ones that have a ratified sales contract
that has not yet closed. This is, of course, an important indicator
of how the closed transaction market will be doing in the coming
months. The "under contract" figures for the fourth quarter of 2004
were up 25%, so home sales are likely to stay strong. For the year,
550 more listings went "under contract" in 2004 than the previous
year, which is both a reflection on the record sales pace in 2004
and a sign of a strong market in 2005.
Median
Sales Price
The
median sales price is a better indicator of what the "average" home
in our area sells for than is the average sales price. Our area
is blessed with many estates and homes that often sell for more
than a million dollars. In 2004, for instance, 68 transactions were
sold for over one million dollars. Such properties distort the average
sales price figures dramatically. The median sales price, on the
other hand, is the number that represents the middle of the market.
50% of the homes in our area sold for more than this price and 50%
sold for less than this price. The median sales price for the entire
market area in 2004 was $247,250 which is $18,000 more than the
previous year's figure.
Days
on Market (DOM)
The
best indicator of a hot market is found in this category. The average
DOM for the area has been very low over the past few years, but
it appears we may have found the point where prices are making buying
become more deliberate. This is not to say that the market for home
sales has weakened. Rather, DOM has increased slightly because higher
priced homes often take a few more days to sell. In 2004, the average
DOM for all sales reported in the Multiple Listing Service was 78
days, which is 16 days longer than 2003 (62). For the first time
Fluvanna was the fastest selling market with a DOM of 69. The average
DOM for other areas is as follows: Albemarle (74), Charlottesville
(77), Greene (94), Louisa (97), and Nelson (82). Nelson County,
fueled by strong resort sales, was the only area in this category
that showed improvement by dropping from 90 DOM in 2003.
New
Listings
One
factor that affects the DOM statistic is inventory. If inventory
is low, then there are fewer properties for buyers to consider and
properties sell more quickly. CAAR tracks the number of new listings
that come on the market each month to help us monitor the inventory
of available homes. The inventory shortage should have eased in
2004 with 5607 new listings hitting the market (362 more new listing
than in the previous year), but sales were up substantially. As
of mid-January, 2004, our database has just over 1,000 homes actively
listed for sale which is down around 15% from last year. Historically,
we expect around 200 homes to be purchased in January. That means
that there are roughly five homes available for every buyer in the
entire market area (down from 5.86 in 2003).
Conclusions
and Forecasts
It
is easy to conclude that 2004 was an outstanding year for real estate
in the Charlottesville area. The shortage of homes for sale continues
to be critically low and demand, fueled by continued low interest
rates and a much improved economy, is expected to continue to be
strong. This combination of high demand and low supply will continue
to pressure home prices to rise quickly. All the pieces are in place
for another great year for real estate in 2005. Consumers planning
to buy a home in 2005, can expect a great return on their investment
as prices will likely continue to go up rapidly. It should also
be a great year for sellers as well since inventory will remain
low and demand high. In fact, my prediction is that 2005 will be
another record year for home sales in our area.
- 2004 RESource
2005
Yearly Report
2006
Yearly Report |
