Virginia Mortgage Demand Lessens in Charlottesville, But Remains Strong
While it marked a substantial cool-down from the record-setting 2005 year, the real estate market in 2006 turned out to be the second best year for real estate in Charlottesville, Va., history.
“Nobody remembers second place,” said Dave Phillips of the Charlottesville Area Association of Realtors, employing a football analogy. “The second-place finisher in the Super Bowl is still a pretty good football team.”
According to the Daily Progress, there were 4,318 homes sold in 2006 in the Charlottesville area, representing a 7.4 percent drop from the 4,663 homes sold during 2005, according to statistics released Wednesday by CAAR.
Last year was the first time since 2000 that the number of homes sold in the Charlottesville housing market did not surpass the amount sold the previous year.
But rather than a market downturn, 2006 was more of a market correction, said Lori Chapman, a managing broker with Real Estate III.
“We enjoyed the ride, but this is a bit more sustainable for the long-term,” she said.
In the past year, as Virginia mortgage costs exceeded the range in which many buyers could qualify, the Charlottesville market flipped from a seller’s market to a buyer’s market.
Rates have remained relatively low, with 30-year, fixed-rate mortgages at an average of 6.18 percent. The market’s supply also has grown throughout that time, giving buyers more choice and more room to negotiate price.
Eighteen months ago, the market had only 1,100 homes for sale, or roughly four units per buyer. Today, there are 2,504 homes listed for sale in the Charlottesville market, or an estimated 10 homes per buyer.
“Early 2007 is probably a great time to buy,” Phillips said. “The buyer’s market will continue as long as the current inventory stays level.”
Heading into 2007, area broker Michael Guthrie expects the Charlottesville-area market to stay in favor of buyers, but perhaps slightly less so than currently.
“My sense is that you will see a more level playing field for both buyers and sellers, but it’ll be somewhat slanted toward the buyer because of the market’s supply,” Guthrie said.
The median price of a new home in the Charlottesville market during 2006 was $274,900, an increase of $18,900 over the previous year. In 2006, 107 homes sold for more than $1 million.
As people waited for home mortgage loan costs to drop, the number of days a property stayed on the market increased by 16 in 2006. Properties listed for sale were listed for an average of 76 days before selling.
But that’s not necessarily a cause for concern - when it comes to Virginia home sales, the market is considered strong unless the average time it takes to sell a property begins to exceed 90 days, experts say.