To combat slump, Realtors target new homebuyers

The Charlottesville region’s real-estate market may have slowed to a tortoise’s pace, but that’s actually a good thing — at least for first-time homebuyers.
The number of homes available for less than $250,000 has rocketed to 1,236, up from only 150 or so during the red-hot peak of the market in 2005.
With high inventory on the less pricey end of the real-estate market, prices may be dropping into affordable territory for many young families and others who are renting.
Home sellers and builders are motivated to sell their property, meaning that, in many cases, asking prices and closing costs can be negotiated. Homes for sale in the region have been on the market for an average of 114 days, according to the Charlottesville Area Association of Realtors. By comparison, the average time on the market in 2005 was 43 days.
Meanwhile, mortgage rates are relatively low, with 30-year fixed rates hovering at or below 6 percent.
Add up all these factors and they equal a perfect storm for first-time homebuyers, real-estate professionals say.
“There hasn’t been such a great time to buy a house in a long, long, long time,” said Judy Savage, a real-estate agent and president of CAAR. “Now if we could just get those first-time homebuyers up off the couch.”
To highlight the area’s emerging homeownership opportunities for first-time buyers, the real-estate agent association is launching a massive outreach campaign called “Affordable Again.”
The campaign will be launched May 1 and conclude July 6. It will feature free workshops for potential first-time homebuyers, offering them tips on credit scores, local down-payment assistance programs, mortgage lending and more.
Workshop attendees will get access to discounts of up to 20 percent for goods and services such as furniture, legal fees, title services and home inspections. They will also get a chance to win a grand prize package that includes a big-screen television, a $500 gift certificate to Bed, Bath & Beyond and other housing-related goodies.
“We want to save ’em a whole lot of money,” said Dave Phillips, chief executive officer of CAAR. “That’s our intent anyway.”
As part of the campaign, the association will also launch an Affordable Again Web site that will feature selected properties listed for less than $250,000 and will provide information about opportunities for first-time buyers. The association will also sponsor two Affordable Again open house weekend events, in which many homes on the less expensive end of the market will be highlighted.
“The market is attractive right now,” Phillips said. “We’re trying to get that word out.”
First-time homebuyers are being targeted because they are seen as the market’s best hope for a kick-start. If properties on the lower end of the market sell at a fast clip, then those properties’ home sellers can then purchase their next home.
“First-time homebuyers are the engine that makes the real-estate industry and the new construction industry work,” said Ray Caddell, a real-estate agent with Century 21 who is in his 25th year of working with first-time buyers. “We call it the domino. The whole chain has to work or nothing works.”
Charlottesville-area homes are a good long-term investment, Caddell said, but not for house flippers who are looking for a quick payday.
“We have to get back to understanding that the single best reason to buy a house is to put a roof over your family’s head,” he said. “It’s not like buying pork bellies.”
The bulk of the so-called affordable homes inventory is not in Charlottesville and Albemarle County, but in places such as Waynesboro, Fluvanna County and Greene County. Yet even in Charlottesville and Albemarle, there are far more homes listed for less $250,000 than in previous years. As of Friday, there were 389 homes in that price range in Charlottesville and Albemarle, up from approximately 10 in 2005.
The Charlottesville-area real-estate market and overall economy is strong compared with that of many other communities. Nevertheless, the local housing market is still weakening, and that benefits homebuyers, said William Shobe, director of business and economics research at the Weldon Cooper Center for Public Service at the University of Virginia.
“Everything points in the direction of downward pressure on housing prices,” he said.
Yet sellers need to make sure that they are setting a price for their house that matches the market’s reality, as opposed to unreasonable expectations, Shobe said. The market cannot reach its full potential, he said, until expectations on housing prices match up between sellers and buyers.