There were few surprises in the Charlottesville Area Association of Realtors (CAAR) recently released 2nd quarter market report. (Click to Read full report https://www.caar.com )Compared to the same time period in 2017, there were more homes sold (1290 vs 1200) and the median home price once again increased to $314,500 from $309,500. Even though more listings were introduced to the market but because of the increased amount of sales, housing inventory is now down to just 4 months. Because of the demand, homes are selling faster than a year ago. The increased amount of homes that went under contract certainly signal that the market should continue to be positive.
As one looks deeper into the 2nd quarter report, the number and how quickly attached homes are selling was surprising. However, two factors bring sense to it. 1) There is a different type of attached home than what many of us think. Many of us see attached homes as vertical townhomes and side by side duplexes. Due to the cost of dirt, it is difficult to build horizontally while keeping the price of the home down. A solution to this has become a patio style which places two homes side by side w a garage separation. 2) interestingly, The older millenials AND the late stage baby boomers are now both looking for this type of “one level living, no maintenance” home which is what has created the demand for this type of product. We talked with CAAR leaders about this phenomenon. Here is the podcast of that conversation. https://wina.com/podcasts/a-look-at-the-housing-market/ Two other points of data in CAAR’s analysis is 1) that new construction sales which has increased over the last years looks as if they are leveling off. Over the last 6 months, new home sales made up over 20% of all area sales. Over the last three months, it was down below 20%. Secondly, the higher price ranges (especially from $500-750K) saw a significant increase in sales. This may be because builders now are into 2019 for delivery. For those needing a home sooner, they have to find an existing home rather than wait for a new one. This is certainly a trend that needs to be watched.
Finally, one can’t ignore what rising interest rates combined with higher home prices might do to dampen the market in the future. There are even some who feel it will lead to diminished sales and lowered sales prices. (https://www.dailyprogress.com/news/local/report-area-home-prices-rising-as-sales-ramp-up/article_af7fc6ba-856c-11e8-8dae-a3b5d4504057.html) The data suggests differently. The numbers of people needing housing is increasing and will remain strong over the next few years. That, along with the fact there aren’t enough homes for sale in certain price ranges, points to a moderate increase in the number of sales and home values moving forward.
Michael Guthrie, CEO
Roy Wheeler Realty Company