Area housing market shows signs of life

The pace of home sales picked up slightly across the Charlottesville region during the first three quarters of 2010, but the market remains sluggish.

According to the Charlottesville Area Association of Realtors’ latest market report, there were a total 1,844 residential units sold between Jan. 1 and Sept. 30 in the region — a 5.3 percent jump over the same period in 2009.

The third quarter market report, released Friday, points to the federal homebuyer tax credit that led to a surge of home purchases before it expired in April.

“Realizing the tax credit of earlier this year had an impact on our market, we are not far enough removed from the influence of that event on our area to draw any conclusions,” the report says. “But as it stands now, we are still showing an increase in sales activity year over year.”

As of Sept. 30, sales were up for all area localities except Charlottesville and Orange County.

The most dramatic sales bump was seen in Nelson County, which posted a 45.3 percent increase over the previous year.

Chastity Morgan, broker of Nelson County’s Mountain Area Realty, said several factors likely are contributing to the county’s sales increase.

One reason, she said, is that vacation home sales at Wintergreen basically came to a “standstill” following the economic meltdown of fall 2008. That trend, she said, seems to be turning around, at least slightly.

“We’re starting to see people willing to make purchases in the secondary home market,” she said, “but it’s still nothing like it was during the boom time.”

Wintergreen real estate sales were buoyed this year, Morgan said, by an unusually good ski season that lured a sizable number of skiers to the mountain who then went on to buy a vacation home there.

Apart from the second-home segment of Nelson’s market, Morgan said, many of this year’s sales were in the county’s northern half and tended to be more affordable than in neighboring Albemarle.

“Part of the reason is people recognize oftentimes they can buy more property and more square footage with their dollar in Nelson than they can in Albemarle County,” she said.

In Fluvanna County, meanwhile, there was an 18.8 percent increase, while Louisa climbed by 14.3 percent, Greene rose by 9.5 percent and Albemarle went up by 6.1 percent.

On the other end of the spectrum, Charlottesville’s sales fell from 359 in 2009 to 297 in 2010, a drop of 17.3 percent. In Orange County, sales slipped from 47 to 43, a decline of 8.5 percent.

Why such a sharp sales drop-off in Charlottesville? Greg Slater, a real estate agent with BHG Real Estate III and president of CAAR, said some reasons may include that condo sales have fallen as financing has become harder to obtain and because the city currently lacks the housing supply at certain price points that can be found in Albemarle and elsewhere.

While there were few surprises in the third quarter market report, Slater said, there was one unexpected trend.

“I thought it was interesting that the median sales price stayed basically level,” he said. “I would have expected there’d have been a little more downward pressure on that.”

As of the end of 2010’s third quarter, the median sales price of homes in the Charlottesville area fell by a mere $900, or a drop of less than half a percentage point.

Median prices were down the most in Nelson County, which fell by 10.7 percent, while Charlottesville went down by 2.5 percent and Greene declined by 1.4 percent.

The median price rose slightly in Albemarle by 1.7 percent, in Orange by 2.5 percent and in Louisa by 5.9 percent.

In Slater’s view, the biggest question is whether the market will bounce back or if the region is correcting itself into a new normal.

“Is October 2010 what we can expect in October of the next two or three years? I don’t know,” he said.

Michael Guthrie, CEO of Roy Wheeler Realty, said the market will probably not truly bounce back until the region’s still excessive inventory drops and until homebuyers are less concerned about their jobs and the overall economy.

Conditions remain attractive for buyers, Guthrie said, as interest rates are at a 50-year low and home prices aren’t likely to go up anytime soon.

“Normally,” he said, “things would be jumping. There’s some outside factors influencing what’s going on here.”