As just about every segment of the Charlottesville real estate market seems to be slipping each month, there aren’t many bright spots.
- Sales in Albemarle County in August were off about 45% from last August
- Charlottesville City sales were off about 20% from last August
- Sales in the Charlottesville MSA were off about 30% from last August
Inventory levels are up (and up fairly significantly) in pretty much every category and in every area: Charlottesville, Ivy, Keswick, Greene County, Earlysville, etc.
So what about condominiums in Charlottesville and Albemarle? You hear about mass foreclosures of condominiums across the country – from Miami to Phoenix to Las Vegas, condos have probably been hit the hardest of any segment in the national real estate economy. Based on that, you could deduct that Charlottesville condominiums are probably still in a free fall…but not so fast.
In August 2010, condominium sales in the Charlottesville MSA totaled 22…that’s just 4 short of last August’s total of 26 (or a drop of 15%). True, it’s still a drop, but not nearly as much of a drop as other segments of the local real estate market.
OK, so you can’t deduct too much from one month…so let’s take a look at the last 3 months (June, July, and August) in 2010 compared to 2009.
- Total condo sales in June, July, August of 2009: 78
- Total condo sales in June, July, August of 2010: 68
That’s a 12.8% drop from 2009 to 2010. Nothing to write home about…but not the doomsday number you’d expect from condos.
The biggest number for me is that inventory has seemed to have stabilized. Total inventory is down from last August (from 354 to 328) and months of inventory is only up slightly (13.6 to 14.9). All of these numbers beat most other segments of the market.
So, what’s causing this?
- First of all, I think that condominium owners are more realistic with there sales prices. They truly understand that they HAVE to price well to get it sold. There’s much less differentiation from unit to unit, so there’s less of an opportunity for owners to rationalize price increases b/c of upgrades, location, ‘uniqueness’, etc.
- Foreclosures and short sales have also hit the condo market hard…once again forcing price corrections.
- There is very little new construction in the local condo market. Therefore, inventory is holding in check and not increasing b/c of new units being built.
- There is a strong demand for rentals in our area now…and investors are looking to condos as investment properties
Since price corrections have been harsher, buyers (both homeowners and investors) are seeing some value in certain segments of the condo market.
That being said, the problem with condominiums is getting financing. Condominiums are by far the hardest type of real estate to finance. (The explanation behind this will have to be a topic for another post). But, if you are looking into buying a condo, please be sure you contact a Charlottesville real estate agent who has condominium experience. Condos are a different animal – you need to make sure you’re working with a professional who knows what they are doing.