By Dave Phillips, CEO
Charlottesville Area Association of REALTORS®
Mark Twain once said, "When we remember we are all mad, the mysteries disappear
and life stands explained." He could have been talking about the real estate market
over the past few years. After two years of insanity (irrational price increases and crazy
sales numbers), the market appears to be leveling off at a rational level. As the charts
and graphs below show, 2005 and 2006 were spikes in an otherwise steady market.
The real estate market is now much easier to understand.
Overview of the Second Quarter While the second quarter numbers for 2007 are down from last year’s mid-year marks,
they do show a strengthening real estate environment. Home prices appear to have
stabilized, the glut of inventory of homes for sale has peaked, the average days on the
market has dropped slightly, and home sales have picked up. There are still soft spots
in the market, but overall this is the most balanced market in years. We are still in a
"buyer’s market," so buyers have a slight upper hand on sellers, but the pendulum is
gently easing back to a nice equilibrium.
Homes Sold There were 1,882 homes sold in the first six months of 2007, which was down 385 (-
17%) from last year. All local areas (Albemarle -13.3%, Charlottesville -33.7%,
Fluvanna -18.5%, Greene -34.7%, Louisa -20.7, and Nelson -24.9%) posted lower sales
than the same period last year. Looking at the past 6 years (see chart below), our
region’s core markets have returned to the sales levels of 2003, which was just prior to
the crazy boom years of 2004-2006. Sales outside the core areas listed were strong, so
the total market is closer to the impressive numbers we saw in 2004. It should be noted
that the decline of sales in the city is a bit misleading. Last year the city condo market
exploded and this year has returned to normal. That accounts for a large portion of the
city’s sales decline.