2005 Year End Market Report, Like a Rolling Stone
By Dave Phillips, CAE RCE, Charlottesville Area Association of Realtors

According to figures from the CAAR Multiple Listing Service, 4,520 homes were sold in the Charlottesville market area (including the counties of Albemarle, Fluvanna, Greene, Louisa, and Nelson, and the City of Charlottesville) in 2005 compared to 4143 in the previous year. (Note: total figures include all properties reported to the MLS even if they were outside the main market areas.) Although sales are up 9.1% for the year, other local statistics provide us with Mixed Emotions.

Each quarter, 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, price per square foot, and the number of new listings. These figures are tallied on a year-to-date basis every quarter and are compared to the same information from the previous year.

Transactions Closed
In the first half of the year, the residential home market ran like Wild Horses, but settled down in the second half and cruised to another record mark. Results by area are mixed (see chart) with Fluvanna, Greene, and Charlottesville showing modest decreases in sales and Nelson, Louisa and Albemarle showing strong increases. Albemarle’s large increase in buyers singing Gimme Shelter is thanks to a very strong condominium sales and Louisa’s swelling market appears to be related to the search for affordable housing. Nelson’s gain, on the other hand, is linked to the booming resort market that is sweeping the country as baby-boomers buy second homes.

Year-end 2005
Area Total Sales / Compared to 2004 / % Increase/Decrease
--------------------------------------------------------------------------------
Albemarle  1870 / +180 / +10.7%
Charlottesville  538 / -5 / -.9%
Fluvanna  623 / -29 / -4.4%
Greene  294 / -6 / -2%
Louisa  226 / -+44 / +24.2%
Nelson  381 / +9 / +2.4%

Under Contract
Properties that are “under contract” (or pending) are ones that have a ratified sales contract that have not yet closed. This is, of course, an important indicator of how the closed transaction market will perform in the coming months. The fourth quarter “under contract” figures for 2005 were down a significant 17.1% from the same period last year. For the quarter, 736 listings went “under contract” in 2005 compared to 888 during the same period last year. This should point the way to a soft first quarter for 2006, but it is too soon to tell if this decline indicates any market trend or is simply indicating the market took a breather for the holidays.

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 2005, for instance, 93 transactions were closed 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 2005 was $255,000 which is $30,000 more than the previous year’s figure. Nelson led the way with a median price of $300,000 (up 28%) followed by Albemarle $285,000 (up 8%), Charlottesville $247,428 (up 12%), Greene $234,900 (up 31%), Fluvanna $230,000 (up 24%), and Louisa $205,200 (up 19%). The overall market, including properties outside the areas listed, increased by 13% to a median price of $255,000. (Note: Albemarle’s median price increase was lower than other areas because of a significant increase in affordable condo units.)

Days on Market (DOM)
The best indicator of a hot market is found in this category. The average DOM for the area trended downward in 2005. The year-end average DOM for all sales reported in the Multiple Listing Service was just 60 days, which is 10 fewer days than the previous year. Albemarle and Nelson reported the most significant drop in DOM (both minus 20 days) followed by Greene (minus 13). Only Charlottesville showed an increase in DOM for the year (+6). Albemarle led the way with DOM of just 49 days. The DOM for other areas was as follows: Charlottesville 62 , Fluvanna 66 ( no change), Greene 77, Louisa 90 (down 5), and Nelson 74.

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 quarter to help us monitor the inventory of available homes. The inventory shortage that has plagued our area for the past few years saw great improvement during 2005. As of early January, 2006, our database has 1,588 homes actively listed for sale. That is an increase of over 500 more homes on the market than this time last year. We can expect around 300 homes to be purchased in January. That means that there are roughly 5.3 homes available in the entire market area for each buyer. While this higher inventory will cause a minor slow down the pace of price increases, we are still 20-30% down in inventory compared to the mid-1990’s. It will take a few more quarters of major increases before we will see a significant effect on the market.

Price per Square Foot
This category helps us track the affordability of housing across jurisdictions in our area, but it is important to understand that this figure is not completely accurate. Each home is a different mix of land, location, style and amenity, and this figure does not take this soft data into account. CAAR considers this to be an interesting statistic, but not one that should be used too widely in comparing properties. In 2005, the most expensive area per square foot was Nelson at $200 (up 25% from last year). The other areas were as follows: Albemarle $166 (up 12%), Charlottesville $174 (up 20%), Fluvanna $130 (up 19%), Greene $139 (up 19%), and Louisa $133 (up 24%).

Conclusions and Forecasts
At the beginning of the year, I predicted that 2005 would be yet another record year for home sales in the Charlottesville area. That was an easy prediction, but what I did not predict is more interesting. 2005 proved to be a market in transition. Inventory rose substantially, but the days on market dropped and prices continued to show strong increases. Normally, such a major increase in supply would cause properties to stay on the market longer and price increases to slow down. The fact that the market did not react to the increase in homes for sales tells us that we have still not reached adequate levels of inventory.

In 2006, we expect current trends to continue – perhaps at a more “normal” pace. We should set another record for sales, but only by small margin. We will continue to see prices increase, but by a more moderate rate in the 8% to 10% range. Homes will continue to sell quickly by historic standards, but probably not quite as fast as 2005. The shortage of homes for sale will ease slightly, but demand will continue to be strong. The baby-boomers will continue the frenzied pace of buying vacation homes. And finally, I’ll end with an easy prediction – The Rolling Stones will NOT return to Scott Stadium in 2006, but Dave Matthews will open the JPJ Arena.

If you have any questions on these market statistic or other aspects of the local market, please contact me at 434-817-2393 or dave@caar.com .

Second Quarter Market Report –2005
By Dave Phillips, CAE, Charlottesville Area Association of Realtors

The real estate market in the Charlottesville area continues to expand like the waist line of the average American. The second quarter numbers indicate a continued appetite for purchasing real estate in central Virginia. According to figures from the CAAR Multiple Listing Service, 1300 homes were sold in the Charlottesville market area (including the counties of Albemarle, Fluvanna, Greene, Louisa, and Nelson, and the City of Charlottesville) in the second quarter compared to 1242 in the same period last year. (Note: total figures include all properties reported to the MLS even if they were outside the main market areas.) That’s a healthy 4.7% increase in the number of closed sales for the quarter compared to last year.

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, price per square foot, and the number of new listings. These figures are tallied on a year-to-date basis every quarter and are compared to the same information from the previous year.

Transactions Closed

As stated above, the second quarter saw a solid increase in closed sales from last year. A strong increase in Albemarle (up 68 sales) led the way with Louisa (up 21) and Nelson (up 5) also showing increases. Albemarle was the top sales area with 577 sales for the quarter, (up 13.4% from last year). Fluvanna is the second largest market with 188 sales (down 12.1%), followed by the city of Charlottesville with 144 (down 22.2%), Nelson 98 (up 5.4%), Greene 84 (down 16%), and Louisa 77 (up 37.5%).

Properties that are “under contract” (or pending) are ones that have a ratified sales contract that have not yet closed. This is, of course, an important indicator of how the closed transaction market will be doing in the coming months. The second quarter “under contract” figures for 2005 were down slightly (-1.3%) from the same period last year. For the quarter, 1307 listings went “under contract” in 2005 compared to the previous year when 1324 went “under contract” during the same period. The second quarter is the busiest time of year for properties to go under contract and this hefty number in the second quarter points to a solid showing for third quarter sales.

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 the second quarter of 2005, for instance, 21 transactions were closed 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 the second quarter was $245,000 which is $25,000 more than the previous year’s figure. Albemarle is leading the way with a first quarter median price of $277,475 (up 5%) followed by Nelson $268,500 (up 15%), Charlottesville $245,000 (up 16%), Fluvanna $229,000(up 32%), Greene $221,000 (up 28%), and Louisa $193,205 (up 9%). The overall market, including properties outside the areas listed, increased by 11% to a median price of $245,000.

The best indicator of a hot market is found in this category. The average DOM for the area trended upward slightly last year, but the first six months of 2005 show a brisker pace to the market. In the second quarter, the average DOM for all sales reported in the Multiple Listing Service was just 59 days which is 18 fewer days than the same period last year. All areas reported significantly lower DOM numbers for the second quarter. Albemarle led the way with DOM of just 50 days (down 20 days). The DOM for other areas was as follows: Charlottesville 51 (down 28), Fluvanna 64 ( down 4), Greene 65 (down 27), Louisa 85 (down 14), and Nelson 65 (down 7). The DOM for the entire area was one of the lowest ever at an average of just 59 days for a home to be on the market.

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 that has plagued our area for the past few years saw great improvement during the second quarter. As of mid-July, 2005, our database has 1,368 homes actively listed for sale. That is an increase of 276 more homes on the market than the previous quarter. We can expect around 250 homes to be purchased in July. That means that there are roughly 5.5 homes available for every buyer in the entire market area. That is the highest number we have seen in several years. While this higher inventory will slightly slow down the pace of price increases, we are still 30-40% down in inventory compared to the mid-1990’s. It will take several more quarters of major increases before we will see a significant effect on the market.

This category helps us track the affordability of housing across jurisdictions in our area, but it is important to understand that this figure is not completely accurate. Each home is a different mix of land, location, style and amenity and this figure does not take this soft data into account. CAAR considers this to be an interesting statistic, but not one that should be used too widely in comparing properties. In the first quarter, the most expensive area per square foot was Nelson at $188 (up 19% from last year). The other areas were as follows: Albemarle $166 (up 12.9%), Charlottesville $165 (up 14.6%), Greene $137 (up 20.2%), Fluvanna $128 (up 21.9%), and Louisa $121 (up 10%).

First Quarter Market Report –2005
By Dave Phillips, CAE, Charlottesville Area Association of Realtors

The real estate market in the Charlottesville area remains hotter than the Volcano Chicken at Thai 99 Restaurant. After 5 successive records years, we expected another strong year, but sales erupted in the first quarter and set the pace bury last year’s amazing sales pace. According to figures from the CAAR Multiple Listing Service, 819 homes were sold in the Charlottesville market area (including the counties of Albemarle, Fluvanna, Greene, Louisa, and Nelson, and the City of Charlottesville) in the first quarter compared to 691 in the same period last year. (Note: total figures include all properties reported to the MLS even if they were outside the main market areas.) That’s a whopping 18.5% increase in the number of closed sales for the quarter.

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, price per square foot, and the number of new listings. These figures are tallied on a year-to-date basis every quarter and are compared to the same information from the previous year.

Transactions Closed

As stated above, the first quarter saw a large increase in closed sales from last year. A strong increase in Albemarle (up 47 sales) led the way with Nelson (up 16) and Greene (up 11) also having a significant increases. Albemarle was the top sales area with 331 sales for the quarter, (up 16.5% from last year). Fluvanna is the second largest market with 112 sales (down 7%), followed by the city of Charlottesville with 95 (up 6.7%), Nelson 89 (up 21.9%), Greene 57 (up 23.9%), and Louisa 35 (up 25%).

Under Contract

Properties that are “under contract” are ones that have a ratified sales contract that have not yet closed. This is, of course, an important indicator of how the closed transaction market will be doing in the coming months. The first quarter “under contract” figures for 2005 were significantly down from the same period last year by 14.7%. For the quarter, 1010 listings went “under contract” in 2005 compared to the previous year when 1184 went “under contract” during the same period. This is likely just a natural flow of the market and indicates that the second quarter may not have as many closed transactions as last year. If this number continues to fall each quarter, it could indicate the market is slowing, but it is way too early to draw any conclusions.