Published by the Charlottesville Area Association of REALTORS®

down 28%, but after the first 9 months of the year, sales are only 19% below the 2008 levels. In

the third quarter, sales (845) were only down 6.2% from the same period in 2008 (901). This is

the smallest year over year decline we have seen in several quarters in the Charlottesville area.

July and August monthly sales were very close to 2008 levels, but September fell back a bit.

or more) are driving the pick-up in sales. In addition, the $8,000 tax credit for first time buyers

has supercharged the sale of starter homes (below $300,000). 65% of home sales in the third

quarter were in this starter home category, which is consistent with the overall trend for the

entire year. The surge in first-time buyers is also a national trend.

There were 2,001 homes sold in the Charlottesville area during the first nine months of 2009,

which was down 19.1% (-471 sales) from 2008. All local areas are still down from last year:

Albemarle -5.4%, Charlottesville -27.4%, Fluvanna -25.3%, Greene -7.7%, Louisa -28.9%,

Nelson -25.8%, and Orange -25.5%. Monthly sales for the region had improved slightly each

month since November 2008, but that string was broken in August due to normal seasonal

swings.

Sales in the Central Valley region were generated from the Greater Augusta MLS, which has

more complete data on the Valley market than the CAAR MLS. Sales were down in the Valley

by 18.5 % compared to last year.

Based on the data from the CAAR MLS, we believe that the numbers clearly show a significant

decrease in home prices. The median prices listed below are the middle of the market of

properties that sold. Simply put, this is an indication of what buyers were willing/able to pay and

is not a true reflection of individual home prices. It is probably safe to assume that a steady, yearto-

year decrease in the median price is a good indication that prices are going down, but it is not

an exact measurement.

We believe the numbers displayed below provide compelling evidence that our local real estate

market has experienced a noteworthy drop in home prices. The CAAR market reports have been

discussing this trend since the Fall of 2007, and this report shows more evidence of the decline.

The one caveat that we need to make is that part of this median price decline is a reflection of an

545 were sold for $300,000 or less. This surge in the lower end of the market will naturally pull

the median price down.

Overall, the median home price (including attached homes) declined $17,100 (-6.4%) compared

to the first nine months of last year. For the first time, the quarterly report shows that the area

median price actually dropped below the 2005 median price. All areas covered in this report

showed a decline except for Nelson, which remained flat. Median price changes for each locality

were as follows: Albemarle (-9.5%), Charlottesville (-6.8%), Fluvanna (-17.1%), Greene (-

4.5%), Louisa (-16.7%), Nelson (0%), Orange (-28.7%) and the Valley (-8.7%).

Another indicator that allows us to see the decline in home prices is a major drop in the price per

square foot numbers. The average price per square foot of finished space in homes is not a

scientific number, but a downward trend over the years clearly indicates a decrease in prices (and

vice versa). According to the chart below, prices peaked in 2006 and have declined for the past

three years. There has been a $32 per square foot drop since the peak in 2006. The current $145

per square foot is the lowest number since 2004.

The inventory of homes for sale in the Charlottesville has continued to decline very slowly. As

we have reported for the past several quarters, the excess of inventory is causing many of the

problems with our local housing market. Until we are able to reduce the number of homes for

sale, we will continue to be in a strong buyer’s market with soft home prices and very creative

incentives. That’s good for buyers, but it is not any better for the long-term housing market than

the strong seller’s market we experienced just a few years ago.

Currently, we have 3,425 homes on the market, compared to 3,519 at this time last year. This

small decrease from last year is a positive sign, but we have a long way to go before we see

appropriate inventory levels in the 2,000 to 2,500 range. The median price of homes currently for

sale is $294,900, which is $21,350 less than last year. The average DOM (days on market) of

these homes is 159 days, which is six days less than last year and 40 days more than homes that

have sold. The most telling statistic related to homes currently on the market is that the average

price per square foot is $201 compared to $145 for homes that have sold in the first 9 months of

2009.

Housing affordability is the positive aspect of this market. There are 879 homes for sale

$200,000 or less with an average DOM of 137 and an average price per square foot of $145.

There are 270 homes currently on the market priced at a million dollars or more with an average

DOM of 244.

In this market, the average days a property stays on the market is less important than it would be

in a more balanced market. There are many variables in the marketplace – excess, inventory,

which may indicate we are finding an equilibrium of sorts. Even in this market, the best

way to shorten the days your property is on the market is to price it correctly.

It is important to note that many “new” homes are not included in CAAR MLS statistics. It is

very common for a buyer to contact a builder directly to custom build a home. With that said, the

historical perspective of the pace of new home sales gives us a reasonably good picture of the

market for new construction. As the chart below shows, new home sales are still struggling and

until the inventory of re-sale homes for sale declines, new construction will lag.

The sale of attached homes is only reported in Charlottesville and Albemarle because very few

properties in this category are located in other counties, except Nelson. Since the condos in

Nelson are primarily in the Wintergreen Resort market, we have decided not to include them in

this report. One of the more interesting numbers in this report is the increase in the sale of

Charlottesville attached home sales are down 34.4%, while Albemarle sales are up 9.1%

compared to 2008. The chart below shows the attached homes sold in 2009 compared to past

years. Inventory levels of attached homes for sale are still high (over 600), with an average DOM

of 199 for properties currently on the market. The median price of an attached home currently on

the market is $219,900. The median price for an attached home that sold in the first nine months

of 2009 is $221,500 for Albemarle and $218,950 for Charlottesville.

We can draw a few general conclusions from the numbers in this report. First, prices of homes in

the Charlottesville area have fallen substantially in 2009. Second, due to excess inventory, we

are still in a strong buyer’s market. Third, some areas of this report show a positive or at least

stabilizing trend – sales are doing better compared to last year, DOM has flat-lined, and condo

sales in Albemarle are rebounding.

The next quarter should continue an improvement in the market compared to 2008. During the

quarter of 2008 was so bad it will be hard not to beat. 2009 may even catch up with sales from

2008 by the end of the year. Additional declines in prices are possible, but it will be hard to tell if

these price drops are a result of more sellers finally pricing their properties based on the current

market, or a real decline in home values. Only time, and future market reports, will reveal this to

us.

This Quarterly Market Report is produced by the Charlottesville Area Association of