Digging a Little Deeper: Albemarle County Real Estate By Price Ranges

We all know that real estate is local.  Taking national stats and trends and trying to apply them to our Charlottesville real estate market isn’t always relevant.

Along the same lines, stats and trends in our overall local market don’t always translate to smaller sub-categories and market niches.  For example, if you’re selling a $400,000 house, it’s not very relevant to study the pace of home sales in the $600k-$800k range.  At Nest, we spend a lot of time digging through numbers not only for the market as a whole…but for sub-categories by price range, areas, neighborhoods, and property types.

We’re going to take a look at home sales and inventory by price range for single family homes in Albemarle County.  To keep things a little simple, I’ve broken down the price categories as follows:

$0-$250,000

$250,001 – $500,000

$500,001 – $750,000

$750,001 – $1,000,000

$1,000,000+

We’re digging into the Sept 2010 numbers as compared to Sept 2009 to check out the trends.

Total Homes For Sale (2009/2010)

$0-$250,000: 122 / 156

$250,001 – $500,000: 307 / 291

$500,001 – $750,000: 113 / 128

$750,001 – $1,000,000: 70 / 78

$1,000,000+: 120/131

Total homes for sale are up in every price category…except for $250k-$500k.  Surprisingly, the largest percentage increase from last year to this year is in the lowest price category, where we’ve seen a 27.8% increase.

Months of Inventory (2009 / 2010)

$0-$250,000: 15.25 / 19.50

$250,001 – $500,000: 10.2 / 11.64

$500,001 – $750,000: 9.4 / 21.33

$750,001 – $1,000,000: 70 / 38

$1,000,000+: 120 / 65.5

If you’re a frequent reader here, you probably realize how we obsess over this number.  In my mind, months of inventory is the most important stat in all of real estate.  Why?  Because it takes into account basic supply and demand…and it answers the questions: is anyone buying?  how many people are trying to sell?

These numbers are admittedly pretty ugly.  If you are selling a house, you don’t like to see anything in the ‘double digits’ here.  Why?  Double digit inventory levels means that a) it’s a strong buyer’s market and b) prices are probably coming down over the next 12 months.  You’ll notice that all of the price categories had double digit inventory levels in September.

The worst performing category, year-over-year, is the $500k-$750k range.  Inventory levels have more than doubled.  Why?  It’s pretty simple: this was the ‘move up’ category in the past.  For example, most buyers in this price category were selling a home and moving up into a larger, more expensive home.  Move up buying has slowed significantly for a few reasons.  First, these move up wannabes are having trouble selling their current home.  Also, with so much uncertainty with the economy, these buyers aren’t ‘stretching’ their dollars as much.  Instead, they are playing it safe with less expensive homes.

Home Sales

For home sales, let’s not take a look at just September or even the last quarter.  Let’s change things up and take a look at the previous 12 months (Oct 09 – Sept 10) vs. the 12 month period before that (Oct 08 – Sept 09).  This gives us a longer term look at sales.

The first number is the Oct 08 – Sept 09 number / the second is the Oct 09 – Sept 10 number…

$0-$250,000: 109 / 136

$250,001 – $500,000: 325 / 381

$500,001 – $750,000: 107 / 111

$750,001 – $1,000,000: 41 / 30

$1,000,000+: 38 / 41

Clearly, the sub $500k price points have bumped up the most during the most recent 12 month stretch, the two lowest price categories have had a 25% and 17% increases in sales, respectively.  Not bad.  In fact, the only price category that is down during the previous 12 months was between $750k- $1 million.

We’ve talked about this trend a lot here on the Nest Report.  But as much as the ‘doomsdayers’ like to focus on only bad news…these sales statistics are definitely something for the local real estate market to hang it’s hat on.

Conclusion

So what does all of this mean?  Although sales have declined over the last 3 months (post-tax credit), the previous 12 months have been pretty good as compared to the 12 months prior.  However, total inventory and months of inventory are up…actually way up.  These two statistics MUST come back down in order for the Charlottesville and Albemarle County real estate market to start stabilizing.

By the looks of these numbers, the $250,00-$500,000 price range seems to be the one on it’s way to recovery the best.  Why?  Sales are up 17% during the last 12 months and total inventory levels are down year-over-year.

Stay tuned for more Charlottesville real estate analysis…