The Charlottesville Area Association of Realtors (CAAR) has released its annual report on the state of the real estate market in the Charlottesville area. While the report presents a mixed bag of good and bad news, the overall sense is that the Charlottesville real estate market is moving in the right direction.
On a positive note, sales in the starter home category remained at a relatively constant pace in Charlottesville market. Furthermore, starter homes accounted for a greater share of home sales in 2010 than in 2009, having increased by 9% to 66.3%. Still, when looking at overall housing sales in the area, the year ended at about the same rate as 2009 despite an increase by 19.2% in the middle of the year.
While the CAAR reports that listing inventory was down by 5% in 2010, the report also clearly states that we are in a buyer?s market. Furthermore, the Charlottesville real estate market is likely to remain saturated with bankowned properties well into the second quarter of 2011.
Another positive sign of a recovering economy can be found in home prices, which remained steady during the second half the year. Historically, this is an indicator of stabilizing prices. Overall, there was very little change in the median home prices when compared to last year. Fluvanna saw an increase of 1.9% while Charlottesville saw a slight decrease of 1.1%.
While prices have remained relatively steady, the bad news is that the current average price per finished square foot is the lowest it has been since 2004. In 2010, the average price per finished square foot was $139, which represents a $32 drop when compared to the peak experienced in 2006. Overall, CAAR found that Fluvanna was among the most affordable markets, while the stability in square foot pricing in Charlottesville is a sign of the market?s relative strength and stability.
Another bittersweet fact included in the CAAR report relates to the number of homes that are currently on the market in the Charlottesville area. Currently, there are 2,721 homes on the market, which is down compared to the 2,877 homes that were on the market at this time last year. On the other hand, this is still well above the normal range of 2,000 to 2,500. Furthermore, the median price of the homes currently for sale is $279,000, which is $10,900 less than the median price in 2009.
All in all, the information contained in the local market report is pretty consistent with what is being seen on a national level. If inventory levels continue to go down while foreclosures remain steady, we are likely to see a gradual price increase in the area. If inventory goes up while loan availability and the regional economy remain stagnant, on the other hand, there will be little room for growth within the housing sector. CAAR 2010 Year End Report
