– Where is the Market Heading in 2017

Where is the Market Heading in 2017

The Charlottesville Area Association of Realtors released their 3^rd quarter market report this week.  Although there were few surprises, there are some interesting stats to watch as we try to predict what the housing market will do as we travel through the final three months of 2016 and head into 2017.  The good news is home sales and days on market numbers continue to improve.

“The market is saying in essence, more buyers, less inventory, things are moving quicker. So that is what the market is saying here locally,” said Dr. Lawrence Yun, Chief Economist and Senior Vice President of Research at the National Association of REALTORS®, at an Oct. 13th exclusive presentation for CAAR REALTOR® members.

These numbers indicate we have almost gotten back to a pre-recession 2005 market.  Looking back, the average sales price in 2005 was $345,000 and at is now at $350,159 at the end of September of 2016.  This is for two reasons.  One the market continues to improve and two there are finally is an increase in higher priced properties selling.  That being said, the lower priced affordable properties are still the most attractive as evidenced by the median price only being $273,000 through the most recent quarter.  The median price is also being affected by the number of attached homes selling vs detached as the former almost sell for a lower price than the latter.

Another interesting trend is vacant land sales increased during the 3^rd quarter of 2016 vs the same time frame in 2015.  One reason for this is land prices have come down to a point that folks are finding property at a price they can afford.  CAAR’s president-elect, Anthony McGhee made another interesting point by saying, “sales of land under 5 acres showed the most activity which could may be because of lack of inventory.  Since they can’t find the right home, they are buying a lot and getting someone to build a home for them”.

As Roy Wheeler Realty Company has been predicting since mid- 2015, New construction is playing a major role in the housing recovery here in Charlottesville.  Case in point, new home sales made up 16% of the 2016 homes sold in Q3 of 2016 whereas only 11% of the 845 homes sold in Q3 of 2015 were new construction.  (see graph below) The new construction median price was $424,000 compared to a $254,000 median price for existing homes.  Roy Wheeler’s Broker and CEO, Michael Guthrie, was quoted in the October 20 issue of the Daily Progress saying, “over the next 15 to 18 months, people are going to continue to buy new, which can cause concern in the existing-home market.

“If you’re in that same price range as new construction, people, if they have the choice, are going to buy new versus buying existing,” he said. “It’s a really important thing to watch for folks who are thinking about selling their existing home because they need to be priced right; they need to have their houses in wonderful condition because they’re competing against brand-new homes.”

Here is a link to the entire CAAR Market Report:
https://www.caar.com/docs/default-source/market-report/caar-3q2016_member-expanded-edition_final.pdf?sfvrsn=4

New home sales are having a positive impact on our market.

Here is the link to The Daily Progress article mentioned in this news release.  https://www.dailyprogress.com/news/local/caar-q-home-sales-in-charlottesville-area-up-over/article_7fe982da-4ae4-5d3c-a6ea-5f2e2920bd81.html

For more information contact:
Michael Guthrie
Broker/CEO Roy Wheeler Realty Company
michael@mrg7175.com
434-951-5155