Charlottesville Area Real Estate Market Report: Q2 2011

At the halfway point of 2011, we’re about where we thought we’d be.  As has been the case for the last several quarters, total year-over-year sales are down in most categories and median sold prices are only down slightly.

Let’s jump into why sales are down.  We can sum it up pretty easily: 2010 Homebuyer’s Tax Credit.  As you may recall, the tax credit expired in Q2 2010 – thus artificially pumping up sales in that quarter.  Q2 2010 was one of the most active quarters in three years for Charlottesville area real estate.  As expected, sales in Q3 and Q4 2010 dropped fairly significantly after the tax credit expiration.

As you read through this report, you’ll see a lot of similarities between Q2 2011 numbers and Q2 2009 numbers.  Fortunately, total Charlottesville area MSA sales are up about 10% over 2009 .  However, pricing and inventory levels are very similar.  For example, median sales prices for the single family homes are exactly the same ($275,000) and median sales prices for attached/condos are off by only $500 ($195,000 vs. $194,500).

We’ve been talking here for a while that sales will only increase when prices get down to the level where buyers see value.  So, this could be a good sign that buyers see value out there – at least in the properties that are selling.

It’s also interesting to note a few ‘sub-market’ trends.  Single family home sales in Albemarle County were relatively strong this past quarter (down 8% y-o-y) when compared to attached (down 38%) and condominiums (down 34%).  In Charlottesville City, single family homes and attached home sales struggled.  However, City condo sales were up almost 48% from Q2 2010.  The increase in condo sales can be linked directly to price reductions in City condos.

Lower priced homes continue to sell at a much better clip than high priced homes.  95% of City sales and 82% of Albemarle County sales were under $500,000.  Inventory levels for $500k+ homes continue to be extremely high in most parts of Central Virginia.  YTD there have been 125 sales in the MSA over $500,000 and 44 have taken place in Western Albemarle (that’s 35%).  As in year’s past, Western Albemarle continues to have the highest percentage of high priced home sales.  (One other interesting tidbit relating to the over $500k market: 34% have been cash purchases.  Compare that to 21% of the other sales.)

As with past Quarters, distressed sales (short sales and foreclosures) are definitely impacting the market and market values.  Foreclosure rates seem to have slowed, but short sales continue to be a common occurrence.  On the positive side, overall inventory levels have creeped down ever-so-slightly.  That trend must continue for the real estate recovery to happen.  But the same story rings true: buyers are looking for values and sellers must be realistic with their pricing expectations if they expect to get their home sold.

Q2 2011 Nest Report Charlottesville