Housing market mending?

Central Virginia home prices dropped 7.8 percent and home sales fell by 6.1 percent in 2009, but area real estate executives say a market rally in the last six months indicates the market is slowly mending.

The Charlottesville Area Association of Realtors released its year-end sales report Wednesday, showing continued declines in home sales and prices that created a buyer’s market.

The best selling homes were in lower price brackets, with 42 percent of homes selling for less than $300,000, the report states.

The report also shows that the median price of a home sold in Central Virginia in 2009 dropped by more than $20,000 to just below 2004 levels. There were fewer homes sold in 2009 in Charlottesville and in Fluvanna, Louisa, Nelson and Orange counties than were sold in 2008, while Albemarle and Greene counties saw increases over 2008 sales.

The report notes, however, that sales were at their lowest points between July 2008 and June 2009 and that afterward figures trended upward.

“The lack of activity in the end of 2008 really set us up for a slow start to 2009,” said Greg Slater, CAAR president and an agent with Real Estate III. “The second half of the year had been building momentum and we’re finally beginning to see sales come back and inventories decrease. The increased sales in the last six months indicate the market has probably bottomed-out and we should see some improvement through spring. For a long time, sellers were in control of the local market. That’s not the case now.”

Real estate agents have credited an $8,000 federal tax credit for those who qualify as first-time or returning buyers as a motivating factor for late 2009 sales. The credit has been extended until April 30 with an additional $6,500 credit for buyers who are “moving up” to another home.

“With interest rates as low as they currently are, and with the tax credits, I think we’ll have a promising market until at least April,” Slater said.

Although the market is tough for those wanting to sell their homes, Slater noted that it’s easier for buyers to drive bargains. More than 65 percent of homes sold last year were considered starter homes, the report states.

Homes spent an average of 107 days on the market in Albemarle County. Charlottesville homes spent 116 days up for sale.

The longest span in the region was the average 159 days that Nelson County houses sported for-sale signs in yards. Greene County homes spent the fewest days on the market, 98.

“It depends on what side you’re on as to whether it’s a good market or not,” he said. “If you’re selling, you have to be realistic about what you’re selling and about your price because you’re faced with challenges. You really have to be hyper-local and look at the market closely to know what other properties have sold for and if you have any foreclosure sales nearby.”

Agents say they have seen a steady stream of buyers entering the market. Barbara McMurry, of Montague-Miller and Co., president-elect of CAAR, said sales figures indicate that 18 percent of home buys in Albemarle County were of houses priced between $250,000 and $300,000.

Pending sales show 12.8 percent of property sales awaiting approval are priced in that range, with 11 percent priced below $225,000. About 6 percent of pending sales cost between $750,000 and $1 million, she said.

“We had a number of sales at the lower-end of the range but at the end of the year there were several properties in the multi-million range,” she said. “There are sales across all of the categories and that’s a good sign.”