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Third Quarter Market Report '2004 Real Estate Market Zooms Along By Dave Phillips, CAE

Just like a Mazda commercial, the Charlottesville real estate market is best described by two words ' Zoom-Zoom. Very strong sales in Charlottesville and Fluvanna combined with solid sales in all other areas will easily lead us to a fifth straight record year for sales in Central Virginia. According to the CAAR MLS, the number of homes sold in the first three quarters was 3,139, which is 15.2% ahead of 2003's record pace of 2,725. The primary Charlottesville market area includes the counties of Albemarle, Fluvanna, Greene, Louisa, and Nelson, and the City of Charlottesville.
Each month, CAAR publishes market statistics on the number of transactions closed, the number of listings that went under contract, the median sales price, average days on market, price per square foot, and the number of new listings. These figures are tallied on a quarterly and year-to-date basis and are compared to the same information from the previous year.
Transactions Closed
As stated above, the third quarter tally was the highest total of transactions closed ever in the Charlottesville area. All areas showed a significant increases in sales with Charlottesville and Fluvanna both posting 25% year-to-date increases. Albemarle was the top sales area with 1,297 sales during the first nine months compared to 1,168 last year (+11%). Fluvanna was the second hottest market with 523 sales (up 106 or +25.4%), followed by the city of Charlottesville 419 (up 86 or +25.8%), Nelson 290 (up 19 or +7%), Greene 234 (up 20 or +9.3%), and Louisa 125 (up 8 or 6.8%). These numbers are particularly amazing given that the 2003 numbers shattered the record for sales in our area.
Under Contract (Pending)
Properties that are 'under contract' are ones that have a ratified sales contract that have not yet closed. This is, of course, an important indicator of how the closed transaction market will be doing in the coming months. Thanks to a strong spring season, the mid-year 'under contract' figures for 2004 were slightly ahead of the same period last year. 3,374 listings went 'under contract' in the first nine months of 2004 compared to the previous year when 3,020 went 'under contract' during the same period.
Median Sales Price
The median sales price is a better indicator of what the 'average' home in our area sells for than is the average sales price. Our area is blessed with many estates and homes that often sell for more than a million dollars. In the first nine months of 2004, for instance, 50 transactions were closed for over one million dollars. Such properties distort the average sales price figures dramatically. The median sales price, on the other hand, is the number that represents the middle of the market. 50% of the homes in our area sold for more than this price and 50% sold for less than this price. The median sales price for the entire market area was $235,000 which is $30,000 (or +15%) more than the previous year's figure. Albemarle led the way with a median price of $260,000 (up $10,000 or +4%) followed closely by Nelson $232,000 (up $62,000 or an amazing +36%), Charlottesville $215,000 (up $40,000 or +23%), Fluvanna $180,000 (up $17,500 or +11%), Louisa $177,900 (up $18,900 or +12%) and, Greene $177,250 (up $14,575 or +9%).
Days on Market (DOM)
The best indicator of a hot market is found in this category. In the first nine months of 2004, the average DOM for all sales reported in the MLS was 76 days. All areas reported higher numbers than last year with Charlottesville and Greene adding 36 and 32 days to their average respectively. Albemarle led the way with an average of just 62 days. DOM for other areas includes: Charlottesville (73), Fluvanna (75), Greene (97), Nelson (98), and Louisa (100).
New Listings
One factor that affects the DOM statistic is inventory. If the inventory of homes on the market is low, then there are fewer properties for buyers to consider and properties sell more quickly. CAAR tracks the number of new listings that come on the market each month to help us monitor the inventory of available homes. For the past several years, our area has seen a significant inventory shortage. There were a total of 4,608 homes that came on the market in the first nine months of 2004 which was up 425 or 7% from the same period last year. If you consider that 414 more homes were sold in 2004, then the inventory actually stayed flat compared to last year. Since we average around 250 homes purchased each month, we have roughly 4.8 homes available for every buyer in the entire market area (up slightly).
Price per Square Foot
New to the market report this year is a look at the average price per square foot of the properties that have already closed. There are too many variables in this number to rely on its accuracy, but this category will help us track the general affordability of housing across jurisdictions in our area. Since this is the first year we have tracked this number, it is too early to draw major conclusions, but over time, this will be an interesting category to watch. The most expensive area per square foot was Nelson at $156 (up 21.9% from last year). The other areas were as follows: Charlottesville $144 (up 12.5%), Albemarle $129 (up 8.4%), Greene $112 (up 8.7%), Louisa $110 (down .09%), and Fluvanna $107 (up 9.2%).
Conclusions and Forecasts
At the beginning of the year, I predicted that 2004 would show a slight increase in sales over the 2003 record level. So far, it looks like that prediction was too conservative. Interest rates have remained lower than expected and the local economy is thriving, so it is safe to say we will be setting another record for home sales in 2004. Inventories are still low and demand is still high, so prices will continue to rise rapidly. If you are planning to buy, the sooner you do, the better your investment. It may not be easy for buyers to find a home to purchase, but it is not expected to get any easier over the next few years (or longer). *** If you have any questions on these market statistic or other aspects of the local market, please contact me at 434-817-2393 or Dave@caar.com.