Aided by the $8,000 federal tax credit for first-time homebuyers, Charlottesville area home sales had increased 19.2 percent over 2009, according to a mid-year report. By year’s end, however, the number of home sales in the area totaled 2,707—42 fewer homes than 2009, a 1.5 percent decline.
But while home sales dipped slightly in 2010, the Charlottesville Area Association of Realtors (CAAR) year-end market report [available here in PDF] shows that home inventory has also decreased and prices have found some stability. What will 2011 look like?
“National reports lead me to think that 2012 is certainly a turnaround year,” says Barbara McMurry, president-elect of CAAR. “But 2011, I think, will be a stable year.” According to McMurry, the area has seen a number of sales in the fourth quarter that were independent of the tax credits and were, most likely, tied to low interest rates. As interest rates climb, “[buyers] are making their buying decisions,” she says.
For Greg Slater, former CAAR president, the current market still benefits the buyer. “We are looking for the new normal,” he says. “What is going to be really interesting about 2011 is that this is going to be our first year, other than the last two, that does not have any outside influence, such as tax credits.” According to the year-end report, first-time homes accounted for 66.3 percent of total sales in the area, an increase from 57.3 percent in 2009.
Home sales numbers in Albemarle County increased 0.5 percent, as did sales in Fluvanna and Greene counties, which saw increases of 10.7 and 8.4 percent, respectively. The biggest jump was recorded in Nelson, which saw a 34.3 percent increase. However, sales in the city of Charlottesville dropped 18.9 percent, or 85 sales, compared to last year.
Median home prices increased slightly in Albemarle, Fluvanna, Greene and Louisa, but decreased in Charlottesville, Nelson and Orange. The area home inventory decreased compared to last year, and shows fewer houses on the market—2,721, down from 2,877.
Although inventory decreased, Slater says the number is still not where it should be. “Inventory is still higher than where it needs to be to stop referring to it as ‘a buyer’s market,’” he says. The numbers of foreclosures and homes that will be put on the market in the spring will be an indication of what one might expect in 2011.
“The story of 2011 will be told by how many homes will come on the market, how fast, and how that inventory is priced,” says Slater.