We’ve been working hard to review sales information from markets all over the country to create our 2018 Charlottesville Annual Report, and asses what’s happened in the last 12 months. One thing is becoming clear: ask us in 18 more months and we’ll have a better idea what to tell you is going on today. We’re in a market transition. We can feel it. We can see signs in the data, but exactly what it means is still not clear.
If you look purely at the numbers for the whole year, things are better than good…they are downright rosy. Total sales across our region are up by more than 4% this year, a trend that has been ongoing since we pulled out of the 2009 recession. Median prices are up more than 4% as well, and Days On Market has dropped yet again. We closed the year with a larger amount of inventory than the year before. But there is far more to the story than these surface numbers reveal…
Our market is made up of many micro markets, and our Nest Area data shows that some areas (Southside Albemarle, the City, Nelson County, and Greene County) show extremely high sales growth while others (Ivy and Crozet) have dropped in volume as prices have increased. And within each Nest Area, we find neighborhoods behaving differently from each other.
But the real question that remains in our area is how much shift is happening, and when will it be fully realized. Our Annual Report looks at a full year of sales information, but if we drill down, we see a different story. Sales may be up 7.8% in the City for the year, but in the 4th quarter, sales were down 4.2% from the year prior. The same story can be seen in the County, where annual sales were up 3.2% but 4th quarter sales were down 12.9%. The market is making a shift.
This shift not a surprise to us. Interest rates have been absurdly low for the past decade or more. Expectations of 4% mortgage rates for 30 year loans are unrealistic for the foreseeable future. Many buyers believe they are being priced out of the market due to monthly payments, and some buyers are correct in this belief. But rates where they are continue to be attractive, and should continue to drive sales.
Our biggest concern surrounds consumer confidence and the market sentiment. What sort of impact will the government shutdown have on our area? On a purely financial and economic note, we are more insulated than many parts of the country, but we do have residents being directly impacted. We have a very large number of residents who are concerned about the impact. That concern could drive our 2019 projections. If consumers stay employed and they have faith our economy is moving, the shift in market may be slight. If confidence turns, the sales slump could become more pronounced. Ask us again in July what was happening now.
You can view our full 2018 Charlottesville Annual Market Report here, or below:
Regardless of whether you’re currently in the market to buy or sell a home, we hope you find this report a valuable tool to learn more about our local real estate market. Have questions? Contact your Nest Broker today to find out what this report means for you and to discuss your real estate goals.