Strong Team Realtors Fluvanna & Lake Monticello 2008 Real Estate Market Analysis
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Fluvanna & Lake Monticello Real Estate Market Analysis
Data compiled and presented by:
Information in this report is believed accurate, however, not guaranteed
86 Joshua Lane Palmyra,VA 22963 434.589.5800 StrongTeamRealtors.com
We would like to thank you for taking the time to consider our Fluvanna & Lake Monticello Real Estate Market Analysis. We sincerely hope that you will find the report both informative and valuable. There are a few things you should know that will help you consider the data that we have shared. . .
The source of all of the statistical data in this report is the Charlottesville Area Association of REALTORS Multiple Listing Service. All of the information in the the CAAR MLS is believed to be accurate, however, is not guaranteed. All of the data was compiled and analyzed personally by Strong Team REALTORS. All of the opinions contained herein are those of Strong Team REALTORS, unless otherwise noted. The presentation of the data in this report is licensed under a Creative Commons Copyright License. This document may be shared, as long as it is passed along unchanged and in whole, with proper attribution to Strong Team REALTORS.
creative commons
by attribution
no derivatives
We encourage you to share this report with others who you think might find it valuable. If you have any questions about any of the information, or would like additional information, or additional copies of the report, we are happy to help however we can. All you have to do is give us a call at 434-589-5800, or send an email to [email protected].
Strong Team REALTORS
Introduction Welcome to the Strong Team REALTORS Fluvanna & Lake Monticello Real Estate Market Analysis. We know that comprehensive, accurate data about the local real estate market is absolutely critical in order for you to make informed decisions about your real estate needs. We also know, however, that such information is often far too hard to come by. It is our goal to change that. This is merely the first of many regular reports we will release that will contain the vital data about the local real estate market that you want, need, and deserve. As real estate professionals, we know first-hand that market data leads to increased knowledge and better decision-making. After all, knowledge is power. We want to empower our clients and customers with the knowledge necessary for them to make the best decisions for them. Everyone has a “feeling” about the real estate market, our goal is to provide facts and analysis that will show you a true picture of the local real estate market.
Scope of this report The data in this report looks back at 2008 and compares the data to 2007. Some of the graphs will refer to the entire Charlottesville Area (Albemarle, Charlottesville, Fluvanna, Greene, Nelson), others will show data for only Fluvanna County and/or Lake Monticello. This is done so that you can compare the local market against itself, and also against the performance of the region.
Strong Team REALTORS
Total Sales By Area The chart on the following page is a representation of the total number of sales in the Charlottesville Area for 2008. The sales are broken down by individual area, and also as a total. As you can see, sales in every area are lower, compared to the same time frame in 2007. For the entire Charlottesville Area, sales volume is 25% lower in 2008, compared with 2007. By area, Albemarle has seen the largest drop-off in sales (-32%), and the City of Charlottesville has seen the smallest change (-14%). Fluvanna, Greene, and Nelson Counties have seen a -26%, -17%, and -20% change, respectively. There is no doubting the fact that there were simply less homes sold in the Charlottesville Area in 2008 compared to 2007. The overall drop in area sales was to be expected. The months of November and December were particularly hard on the market, which is something we will examine later in the report. Sellers need to be aware of the fact that there is little evidence to suggest that the trend of fewer home sales shows no reason to change in 2009. That does necessarily mean that sales volume will continue to drop significantly, but it does mean that to expect the sales numbers from 2004-2006 to return is unreasonable. From a buyer’s perspective, it will be interesting to see how the historically low interest rates will affect demand in 2009. The health of the overall economy will also be a significant factor in demand going forward. There is certainly a lot of inventory from which to choose, prices have reduced, and interest rates are at historic lows. All of these factors are favorable to buyers.
Strong Team REALTORS
Total Sales by Area 3,000 2,902
2,700 2,400 2,100
2,177
1,800 1,500 1,439
1,200 900
984
600
643
423
300 0
553 314 203
Albemarle Charlottesville Fluvanna
2007 Strong Team REALTORS
170
Greene
194
156
Nelson
Total
2008 Source: CAAR MLS
Total Sales in Fluvanna vs. Lake Monticello The following chart shows the total sales for Fluvanna vs. Lake Monticello. In the previous chart, both were included in the “Fluvanna” column. Since Lake Monticello is, by far, the largest subdivision in Fluvanna and very unique compared to the rest of the county, it is worthwhile to examine it individually, whenever possible. Lake Monticello experienced a drop-off of 27% in total sales in 2008 compared to 2007. The decrease is slightly less among the other homes in Fluvanna, coming in 24% lower. It is interesting to note that Lake Monticello accounted for 64% of Fluvanna County’s sales in 2007, and accounted for 62% of sales in the County in 2008.
Strong Team REALTORS
Fluvanna & Lake Monticello Total Sales 300 270
266
240 210 194
180 150 120
157 120
90 60 30 0
Fluvanna Co. ONLY
Lake Monticello
2007 Strong Team REALTORS
2008 Source: CAAR MLS
Charlottesville Area Sales by Month The following chart breaks down the total area sales on a per-month basis. The chart compares the monthly-by-month totals from 2007 and 2008. This chart is important because it gives a picture of the entire year in such a way that we can see the fluctuations in sales from month-to-month. While sales were lower in 11 out of 12 months (September was the exception), the percentage differences fell close in line to the overall percentage difference in sales. The one month that was significantly different in 2008 compared to 2007 was October. In October, sales were 51% lower in 2008. This is a very significant difference. Although significant, it isn’t all that surprising, given the fact that it was around this time that the worst of the economic news was beginning to surface. This news had a very negative effect on consumer confidence, which had a similarly negative effect on housing sales. One positive development was that sales trended a bit higher in December. This might indicate that the drop in sales in November was an anomaly, and not the beginning of a trend. Most economists expect 2009 to be a continuation of 2008. The only way to know if this will be true is to watch the sales by month numbers very closely as we go through the first few months of 2009.
Strong Team REALTORS
Charlottesville Area Sales by Month 400
374 342
350
321
316
300 262
295
246
250
282
255 202
200
169 184
150 100
170
205
152
162
178
165 127
183
140
138
117 90
50 0
Jan.
Feb.
Mar.
Apr.
May
2007 Strong Team REALTORS
Jun.
Jul.
Aug.
Sept.
Oct.
Nov.
Dec.
2008 Source: CAAR MLS
Fluvanna & Lake Monticello Sales by Month The following two charts show the same month-by-month breakdown of the sales total, but the information is limited to Fluvanna County (only) on the first chart, and to Lake Monticello (only) on the second chart. Fluvanna County sales were a bit more erratic on a month-by-month basis than the overall area. Sales in June of 2008 were actually higher than those in 2007. In September and October, the sales numbers were very close to the 2007 numbers. As one might expect, November saw the same drop in sales of just over 50%. December showed a rebound, and we should watch very closely the first few months of 2009 to see how sales respond. Lake Monticello showed a similar pattern to Fluvanna, with June being a high point, September and October trending close to 2007, and November down just over 50%. Again, December saw a rebound, so the first few months of 2009 will be watched very closely. Both charts are instructive, in that they show quite clearly that sellers have a much better opportunity to sell their homes in March through August. This time is known as the Spring Market. Selling a home during this time, when buyers are most active, gives the best chance for success.
Strong Team REALTORS
Fluvanna Sales by Month 60
58 54
50 43
40
38
39 42
38
35
33 34
30
20
20
27
32
30
29 26
21
25
19
20
18
19
10
0
25
12
Jan.
Feb.
Mar.
Apr.
May
2007 Strong Team REALTORS
Jun.
Jul.
Aug.
Sept.
Oct.
Nov.
Dec.
2008 Source: CAAR MLS
Lake Monticello Sales by Month
000 43
667
32
333 29 25
000
26
29 20
24 20
23
21
667 12
16
14
18
17
18
13
14
333
8
12 10
10 6
0
Jan.
Feb.
Mar.
Apr.
May
2007 Strong Team REALTORS
Jun.
Jul.
Aug.
Sept.
Oct.
Nov.
Dec.
2008 Source: CAAR MLS
Fluvanna Sales by Price Range The following chart shows the total sales in Fluvanna County (only), broken down by price range. This chart EXCLUDES homes in Lake Monticello. Those sales are on a separate, following, chart. The chart also compares the price price range sales in 2007 and 2008. Most of the price ranges in Fluvanna County saw a drop in sales, which is to be expected. In fact, the distribution of sales throughout the price ranges remained mostly unchanged in 2008. The most significant change was the fact that prices slid to the lower end of scale overall, which is reflected in the median price range in Fluvanna County, which we will cover later. The main driving factor in the price of homes in Fluvanna County has traditionally been the value of land. Since most homes in the County have greater amounts of land associated with them, they tend to be higher in price. The fact that we have seen an increase in the lower price ranges suggests that buyers might be putting less of a premium on the value of land.
Strong Team REALTORS
Fluvanna ONLY Sales by Price Range 25
0-179,900
30 16
180,000-199,900
7 21
200,000-259,900
18 14
260,000-299,900
8 16
300,000-349,000
15 33
350,000-399,900
24 15
400,000-449,000
7 5
450,000-499,900
6 10
500,000-800,000
5
0 Strong Team REALTORS
4
8
2007
12
16
20
24
2008
28
32
36
40
Source: CAAR MLS
Lake Monticello Sales by Price Range The following chart shows the sales at Lake Monticello, broken down by price range. The numbers refer ONLY to homes in Lake Monticello. Once again, the ranges are compared for 2007 and 2008. As you might expect, most of the price ranges have experienced a decrease in sales. The only two ranges that have experienced an increase in sales were homes under $200,000, and homes between $450,000 and $499,000 (these are waterfront homes, which we will discuss later). The distribution of sales by price range seems to suggest what one might expect during 2008, prices have come down, meaning that sales in the lower price ranges have grown, while sales in the upper price ranges in Lake Monticello have dropped rather significantly. The biggest hit to the price ranges was seen where you would expect to see it-- the $200K-$300K price range, which makes up the bulk of the Lake Monticello market. In this price range, sales dropped 36%. Waterfront homes at Lake Monticello is a market all unto itself, so even though the highest ranges have seen an increase in sales, the numbers aren’t really significant enough to bolster the median home price. We will examine the median home price later in the report.
Strong Team REALTORS
Lake Monticello ONLY Sales by Price Range 15
0-179,900
26 31 29
180,000-199,900
103
200,000-259,900
70 56
260,000-299,900
32 22
300,000-349,000
13 20
350,000-399,900 400,000-449,000 450,000-499,900
7 12 3 2 9 5 5
500,000-800,000 0 Strong Team REALTORS
25
2007
50
75
100
2008
125
150 Source: CAAR MLS
Median Price by Area The following chart shows the median home price, broken down by area. On this chart, 2007 is compared to 2008, and we have added a column that shows the median price for Lake Monticello ONLY. The median price is the price at which exactly half of the homes have sold for more, and half for less. The median price is a significant number because it is used to measure appreciation or depreciation. The reason that the median is used, and not the average, is because if there were to be a few more sales at either extreme of the price range, it would skew the average in that direction. The median is, therefore, considered a more accurate measure of overall value in the market. In 2007, the median home price in the Charlottesville Area was $288,400. In 2008, the median home price in the Charlottesville area dropped to $277,570 (-4%). Albemarle County is the only area that has experienced an increase in the median (+4%). Lake Monticello experienced a 7% drop in median home price ($230,000 vs. $247,500). Fluvanna County as a whole (including Lake Monticello) has experienced a 6% drop in the median price. It would appear that, while the area is certainly experiencing price depreciation, it is very slight. There are many areas of the country where depreciation is in the double-digits. While it might be shocking to local residents, the Charlottesville Area is in much better shape than many parts of the country.
Strong Team REALTORS
Median Price by Area 330,000 288,750
320,600 307,000
247,500
310,000 300,000 280,000 265,000
288,400 277,570
285,000 260,000
259,000
247,500
243,250
230,000
206,250 165,000 123,750 82,500 41,250 0
Albemarle Charlottesville Fluvanna
2007 Strong Team REALTORS
Greene
Nelson
*Lake Mont.
Total
2008
* This column refers to Lake Monticello only. Fluvanna column includes Lake Monticello.
Source: CAAR MLS
Days on Market by Area The following chart shows the average Days on Market (DOM), broken down by area. It compares the average DOM, through Sept. 30, in 2007 and 2008. This chart also includes a column for Lake Monticello only. DOM is a statistic that measures how many days a property is active in the MLS before it goes under contract. The higher the number, the longer properties have remained on the market. Because of the way the DOM statistic is calculated, there is always a possibility that the number does not actually reflect the true DOM for a property, but since it is the only measure we have, we rely upon it anyway. Typically, when DOM isn’t completely accurate, it is usually underestimating the true DOM of a property. So if the average DOM for any area is inaccurate, you can safely assume that the number should be higher, not lower. As you might expect, the average DOM has risen during 2008 for every individual area, and for the Charlottesville Area as a whole. Across the area, average DOM rose almost one full month (26 days) in 2008. It now takes an average of 115 days for a home to go under contract in the Charlottesville Area. In Fluvanna as a whole (including Lake Monticello), the average DOM was 119 days. This is 31 days more than in 2007. In Lake Monticello, specifically, the average DOM was 109 days. This is a 32-day increase over 2007. If we combine these numbers, we can see that average DOM for properties in Fluvanna County, specifically, should have been 129 days. Of course, all of these numbers are averages. Some homes sell very quickly, in days or weeks, while others remain on the market for months, or even a year or more. The most significant factor in a higher DOM for an individual property is its price. Properties that are priced higher than their competing comparable properties typically have a much higher DOM. Strong Team REALTORS
Days on Market by Area
0.000
150
8.571 119 113
7.143
5.714
110
91
108
88
115
111
109
93
89
79
77
4.286
2.857
1.429 0
Albemarle Charlottesville
Fluvanna
2007 Strong Team REALTORS
Greene
Nelson
*Lake Mont.
Total
2008
*This column refers to Lake Monticello only. Fluvanna column includes Lake Monticello.
Source: CAAR MLS
Inventory for Fluvanna & Lake Monticello The following two charts shows the total inventory of homes for sale in Fluvanna (including Lake Monticello), and for Lake Monticello only, broken down by month. For the purpose of this report, the inventory was measured on the first day of each month. For example, as of September 1st of 2008, there were 376 homes on the market in Fluvanna County. 174 of those were located in Lake Monticello. The encouraging thing about these numbers is that the gap between inventory numbers in 2008 compared to 2007 has grown closer. At the beginning of the year, there were significantly more homes on the market in 2008. By the end of the year, the inventory numbers in both Lake Monticello and Fluvanna were almost identical. Any reduction in inventory is a positive sign for homeowners who are in a situation where they must sell. While sales have fallen, if the inventory continues to remain fairly stable, it will help the people who must sell their homes. Of course, it is impossible to tell exactly why the inventory numbers are reducing. Since the number of sales has been significantly reduced, there must be another reason that inventory numbers would remain virtually the same by the end of 2008 and 2007. One possible reason is that homes are coming out of the sales inventory, and going into the rental inventory. Another possibility is that many homes in foreclosure do not make it into the MLS, so they are not reflected in these inventory numbers. The most likely reason, however, is probably that the homes are the market belong to the most motivated sellers. There are less people out there attempting to “flip” properties for profit, or selling just because they would like to move.
Strong Team REALTORS
Fluvanna Total Inventory by Month* 400
391
388
378
380
376
370 358
360
350
382
380 365
372 382
368
349
339
340
364
349
323
345
332
320
325
300 293
280 260 240
297
269
Jan.
Feb.
Mar.
Apr.
May
2007 Strong Team REALTORS
Jun.
Jul.
Aug.
Sept.
Oct.
Nov.
Dec.
2008
*Inventory is counted on the 1st day of every month
Source: CAAR MLS
Lake Monticello ONLY Inventory by Month* 200 190 181
185
186
182
184
185
180
174 183 168
170 160
174
157
170
174
163
167
165
166
Nov.
Dec.
157
150 150
140 130 120
172 179
128
131
135
110 100
Jan.
Feb.
Mar.
Apr.
May
2007 Strong Team REALTORS
Jun.
Jul.
Aug.
Sept.
Oct.
2008
*Inventory is counted on the 1st day of every month
Source: CAAR MLS
Sold vs. List Price Fluvanna & Lake Monticello The following chart shows the relationship between the listing price and the sold price of properties in Fluvanna and Lake Monticello. It compares this percentage in 2007 and 2008. The “Fluvanna” column includes all homes, while “Lake Monticello” refers only to homes in Lake Monticello. This statistic is important because it represents the percentage of the list price that owners are receiving when their home is sold. The statistic uses the list price of the home on the day it goes under contract, and compares that to the sold price on the contract. One thing to keep in mind is that in some transactions, there are closing costs credits, or other credits included in the contract price. These credits have the effect of inflating the contract price, as the seller of the home does not actually keep the money. Therefore, the percentage of sold vs. list price can sometimes be slightly inflated. As you can see, sellers are receiving slightly less for their homes in 2008, compared to 2007. This isn’t surprising, as high inventories, low interest rates, and falling prices have made buyers very value-conscious. In Lake Monticello, sellers averaged just over 96% of list price when they sold the home. For the county overall, the number was slightly better, at just shy of 97%. We can infer from the numbers that sellers not in Lake Monticello were probably closer to 98%. This will be yet another statistic that we will closely monitor in 2009 to see how it compares to 2008, as that will be an important indicator as to where the market might be headed. As with many of the other statistics, these numbers represent an average across all homes sold. Meaning that many homes are selling for at or near list price, while others are selling for well below the list price at the time of contract. The statistic does show, however, what a seller and buyer can reasonably expect to receive in a negotiation. Of course, each individual property presents a unique situation, so buyers and sellers should act accordingly. Strong Team REALTORS
Sold Price vs. List Price (percentage) 100 99 98 97
97.40
97.40 96.89
96
96.26
95 94 93 92 91 90
Fluvanna
Lake Monticello ONLY
2007 Strong Team REALTORS
2008 Source: CAAR MLS
Lake Monticello Waterfront Sales Stats The following chart refers to only waterfront homes and condos sold at Lake Monticello through Sept. 30 in 2007 and 2008. Included in the stats are only those homes that were on the main lake. There was one home sold in 2007 located on Tufton Lake, which was excluded from the results. The chart shows the average price and the median price of waterfront homes sold. As you can see from the chart, both the average and the median price of waterfront homes has increased in 2008 compared to 2007. The number of sales has increased also, rising from 13 to 17 (an increase of 24%). In 2008, the average price of sold waterfront homes was $487,342, and the median price was $477,000. For 2008, the highest-priced waterfront home to sell was $612,000, while the low was $325,000 (a condo). In 2007, the high and low was $700,000 and $365,000, respectively. It would seem that 2008 was a pretty good year for waterfront home sales. The most difficult thing about the waterfront home market is that each home is truly unique. Each has its own features and challenges, making finding comparable sales very difficult at times. The fundamentals of real estate still hold true, however, in that sellers need to pay attention to comparable homes, and price accordingly. For buyers, sometimes patience is required to find the waterfront home that is just the right fit. Despite the fact that the median and the average price of waterfront homes was higher in 2008, there is still great value to be found in the waterfront market, and demand is still healthy.
Strong Team REALTORS
Lake Monticello Waterfront Sales Statistics* 490,000
487,342
477,000
441,000
434,000
430,000
392,000 343,000 294,000 245,000 196,000 147,000 98,000 49,000 0
Median Price
2007
Average Price
2008
*Stats include homes and condos on the main lake. 13 sales in 2007, 17 sales in 2008 Strong Team REALTORS
Source: CAAR MLS
Conclusion 2008 was one of the most challenging years in history for the American real estate market, and the Charlottesville Area was no different. Here, we experienced our own challenges, and home prices and sales ended at levels that haven’t been seen in many years. Many of the factors that lead to the drop in sales and falling median home prices were external economic factors. Factors over which buyers and sellers had no control. As we move into 2009, there will be much attention given to the national economy, the local economy, and the employment situation in our area. There is reason to be positive, however, as the challenges faced in our area were not nearly as great as those faced by many areas throughout the country. The Charlottesville Area, and particularly Lake Monticello and Fluvanna County, all remain desirable areas in which to live for a number of reasons. There is no reason to think that this will change any time in the near future. Interest rates have also remained at historic lows, and credit availability has thawed a bit since the end of 2008. All of this might help to keep our market stable in 2009. Everyone wants predictions for 2009. Most predictions that are made are highly inaccurate, and really just guesses. We will spare you from our guesses here. What we can say, however, with great confidence, is that the current market conditions of high inventory, and low appreciation are here to stay. The days of the red hot real estate market of 2000-2005 are long gone. This is probably a good thing, as market stability is to the benefit of both buyers and sellers. Buyers and sellers should arm themselves with as much knowledge and information as possible, and make an effort not to ignore the market realities in favor of wishful thinking. Being grounded in reality and good information provided the best opportunity for reaching your real estate goals. Strong Team REALTORS
Thank you We at Strong Team REALTORS would like to thank you for taking the time to read our Fluvanna & Lake Monticello Real Estate Market Analysis. We hope that you have found all of the statistics and analysis both informative and valuable. We encourage you to share this document with others who you think may find it valuable. If you would like more copies of this document, or to automatically receive our future market analyses, please call us at 434-589-5800, or send an email to [email protected]. It is always one of our goals to empower our clients and customers with the knowledge necessary to achieve their real estate goals. We are always happy to help you with any questions you might have about real estate, from statistics to staging advice, we are happy to share our knowledge and expertise wherever it is needed. Please don’t hesitate to contact us with any additional questions or comments.
Strong Team REALTORS 86 Joshua Lane Palmyra, VA 22963 434-589-5800 StrongTeamRealtors.com Strong Team REALTORS
Data compiled and presented by:
Information in this report is believed accurate, however, not guaranteed
86 Joshua Lane Palmyra,VA 22963 434.589.5800 StrongTeamRealtors.com
We would like to thank you for taking the time to consider our Fluvanna & Lake Monticello Real Estate Market Analysis. We sincerely hope that you will find the report both informative and valuable. There are a few things you should know that will help you consider the data that we have shared. . .
The source of all of the statistical data in this report is the Charlottesville Area Association of REALTORS Multiple Listing Service. All of the information in the the CAAR MLS is believed to be accurate, however, is not guaranteed. All of the data was compiled and analyzed personally by Strong Team REALTORS. All of the opinions contained herein are those of Strong Team REALTORS, unless otherwise noted. The presentation of the data in this report is licensed under a Creative Commons Copyright License. This document may be shared, as long as it is passed along unchanged and in whole, with proper attribution to Strong Team REALTORS.
creative commons
by attribution
no derivatives
We encourage you to share this report with others who you think might find it valuable. If you have any questions about any of the information, or would like additional information, or additional copies of the report, we are happy to help however we can. All you have to do is give us a call at 434-589-5800, or send an email to [email protected].
Strong Team REALTORS
Introduction Welcome to the Strong Team REALTORS Fluvanna & Lake Monticello Real Estate Market Analysis. We know that comprehensive, accurate data about the local real estate market is absolutely critical in order for you to make informed decisions about your real estate needs. We also know, however, that such information is often far too hard to come by. It is our goal to change that. This is merely the first of many regular reports we will release that will contain the vital data about the local real estate market that you want, need, and deserve. As real estate professionals, we know first-hand that market data leads to increased knowledge and better decision-making. After all, knowledge is power. We want to empower our clients and customers with the knowledge necessary for them to make the best decisions for them. Everyone has a “feeling” about the real estate market, our goal is to provide facts and analysis that will show you a true picture of the local real estate market.
Scope of this report The data in this report looks back at 2008 and compares the data to 2007. Some of the graphs will refer to the entire Charlottesville Area (Albemarle, Charlottesville, Fluvanna, Greene, Nelson), others will show data for only Fluvanna County and/or Lake Monticello. This is done so that you can compare the local market against itself, and also against the performance of the region.
Strong Team REALTORS
Total Sales By Area The chart on the following page is a representation of the total number of sales in the Charlottesville Area for 2008. The sales are broken down by individual area, and also as a total. As you can see, sales in every area are lower, compared to the same time frame in 2007. For the entire Charlottesville Area, sales volume is 25% lower in 2008, compared with 2007. By area, Albemarle has seen the largest drop-off in sales (-32%), and the City of Charlottesville has seen the smallest change (-14%). Fluvanna, Greene, and Nelson Counties have seen a -26%, -17%, and -20% change, respectively. There is no doubting the fact that there were simply less homes sold in the Charlottesville Area in 2008 compared to 2007. The overall drop in area sales was to be expected. The months of November and December were particularly hard on the market, which is something we will examine later in the report. Sellers need to be aware of the fact that there is little evidence to suggest that the trend of fewer home sales shows no reason to change in 2009. That does necessarily mean that sales volume will continue to drop significantly, but it does mean that to expect the sales numbers from 2004-2006 to return is unreasonable. From a buyer’s perspective, it will be interesting to see how the historically low interest rates will affect demand in 2009. The health of the overall economy will also be a significant factor in demand going forward. There is certainly a lot of inventory from which to choose, prices have reduced, and interest rates are at historic lows. All of these factors are favorable to buyers.
Strong Team REALTORS
Total Sales by Area 3,000 2,902
2,700 2,400 2,100
2,177
1,800 1,500 1,439
1,200 900
984
600
643
423
300 0
553 314 203
Albemarle Charlottesville Fluvanna
2007 Strong Team REALTORS
170
Greene
194
156
Nelson
Total
2008 Source: CAAR MLS
Total Sales in Fluvanna vs. Lake Monticello The following chart shows the total sales for Fluvanna vs. Lake Monticello. In the previous chart, both were included in the “Fluvanna” column. Since Lake Monticello is, by far, the largest subdivision in Fluvanna and very unique compared to the rest of the county, it is worthwhile to examine it individually, whenever possible. Lake Monticello experienced a drop-off of 27% in total sales in 2008 compared to 2007. The decrease is slightly less among the other homes in Fluvanna, coming in 24% lower. It is interesting to note that Lake Monticello accounted for 64% of Fluvanna County’s sales in 2007, and accounted for 62% of sales in the County in 2008.
Strong Team REALTORS
Fluvanna & Lake Monticello Total Sales 300 270
266
240 210 194
180 150 120
157 120
90 60 30 0
Fluvanna Co. ONLY
Lake Monticello
2007 Strong Team REALTORS
2008 Source: CAAR MLS
Charlottesville Area Sales by Month The following chart breaks down the total area sales on a per-month basis. The chart compares the monthly-by-month totals from 2007 and 2008. This chart is important because it gives a picture of the entire year in such a way that we can see the fluctuations in sales from month-to-month. While sales were lower in 11 out of 12 months (September was the exception), the percentage differences fell close in line to the overall percentage difference in sales. The one month that was significantly different in 2008 compared to 2007 was October. In October, sales were 51% lower in 2008. This is a very significant difference. Although significant, it isn’t all that surprising, given the fact that it was around this time that the worst of the economic news was beginning to surface. This news had a very negative effect on consumer confidence, which had a similarly negative effect on housing sales. One positive development was that sales trended a bit higher in December. This might indicate that the drop in sales in November was an anomaly, and not the beginning of a trend. Most economists expect 2009 to be a continuation of 2008. The only way to know if this will be true is to watch the sales by month numbers very closely as we go through the first few months of 2009.
Strong Team REALTORS
Charlottesville Area Sales by Month 400
374 342
350
321
316
300 262
295
246
250
282
255 202
200
169 184
150 100
170
205
152
162
178
165 127
183
140
138
117 90
50 0
Jan.
Feb.
Mar.
Apr.
May
2007 Strong Team REALTORS
Jun.
Jul.
Aug.
Sept.
Oct.
Nov.
Dec.
2008 Source: CAAR MLS
Fluvanna & Lake Monticello Sales by Month The following two charts show the same month-by-month breakdown of the sales total, but the information is limited to Fluvanna County (only) on the first chart, and to Lake Monticello (only) on the second chart. Fluvanna County sales were a bit more erratic on a month-by-month basis than the overall area. Sales in June of 2008 were actually higher than those in 2007. In September and October, the sales numbers were very close to the 2007 numbers. As one might expect, November saw the same drop in sales of just over 50%. December showed a rebound, and we should watch very closely the first few months of 2009 to see how sales respond. Lake Monticello showed a similar pattern to Fluvanna, with June being a high point, September and October trending close to 2007, and November down just over 50%. Again, December saw a rebound, so the first few months of 2009 will be watched very closely. Both charts are instructive, in that they show quite clearly that sellers have a much better opportunity to sell their homes in March through August. This time is known as the Spring Market. Selling a home during this time, when buyers are most active, gives the best chance for success.
Strong Team REALTORS
Fluvanna Sales by Month 60
58 54
50 43
40
38
39 42
38
35
33 34
30
20
20
27
32
30
29 26
21
25
19
20
18
19
10
0
25
12
Jan.
Feb.
Mar.
Apr.
May
2007 Strong Team REALTORS
Jun.
Jul.
Aug.
Sept.
Oct.
Nov.
Dec.
2008 Source: CAAR MLS
Lake Monticello Sales by Month
000 43
667
32
333 29 25
000
26
29 20
24 20
23
21
667 12
16
14
18
17
18
13
14
333
8
12 10
10 6
0
Jan.
Feb.
Mar.
Apr.
May
2007 Strong Team REALTORS
Jun.
Jul.
Aug.
Sept.
Oct.
Nov.
Dec.
2008 Source: CAAR MLS
Fluvanna Sales by Price Range The following chart shows the total sales in Fluvanna County (only), broken down by price range. This chart EXCLUDES homes in Lake Monticello. Those sales are on a separate, following, chart. The chart also compares the price price range sales in 2007 and 2008. Most of the price ranges in Fluvanna County saw a drop in sales, which is to be expected. In fact, the distribution of sales throughout the price ranges remained mostly unchanged in 2008. The most significant change was the fact that prices slid to the lower end of scale overall, which is reflected in the median price range in Fluvanna County, which we will cover later. The main driving factor in the price of homes in Fluvanna County has traditionally been the value of land. Since most homes in the County have greater amounts of land associated with them, they tend to be higher in price. The fact that we have seen an increase in the lower price ranges suggests that buyers might be putting less of a premium on the value of land.
Strong Team REALTORS
Fluvanna ONLY Sales by Price Range 25
0-179,900
30 16
180,000-199,900
7 21
200,000-259,900
18 14
260,000-299,900
8 16
300,000-349,000
15 33
350,000-399,900
24 15
400,000-449,000
7 5
450,000-499,900
6 10
500,000-800,000
5
0 Strong Team REALTORS
4
8
2007
12
16
20
24
2008
28
32
36
40
Source: CAAR MLS
Lake Monticello Sales by Price Range The following chart shows the sales at Lake Monticello, broken down by price range. The numbers refer ONLY to homes in Lake Monticello. Once again, the ranges are compared for 2007 and 2008. As you might expect, most of the price ranges have experienced a decrease in sales. The only two ranges that have experienced an increase in sales were homes under $200,000, and homes between $450,000 and $499,000 (these are waterfront homes, which we will discuss later). The distribution of sales by price range seems to suggest what one might expect during 2008, prices have come down, meaning that sales in the lower price ranges have grown, while sales in the upper price ranges in Lake Monticello have dropped rather significantly. The biggest hit to the price ranges was seen where you would expect to see it-- the $200K-$300K price range, which makes up the bulk of the Lake Monticello market. In this price range, sales dropped 36%. Waterfront homes at Lake Monticello is a market all unto itself, so even though the highest ranges have seen an increase in sales, the numbers aren’t really significant enough to bolster the median home price. We will examine the median home price later in the report.
Strong Team REALTORS
Lake Monticello ONLY Sales by Price Range 15
0-179,900
26 31 29
180,000-199,900
103
200,000-259,900
70 56
260,000-299,900
32 22
300,000-349,000
13 20
350,000-399,900 400,000-449,000 450,000-499,900
7 12 3 2 9 5 5
500,000-800,000 0 Strong Team REALTORS
25
2007
50
75
100
2008
125
150 Source: CAAR MLS
Median Price by Area The following chart shows the median home price, broken down by area. On this chart, 2007 is compared to 2008, and we have added a column that shows the median price for Lake Monticello ONLY. The median price is the price at which exactly half of the homes have sold for more, and half for less. The median price is a significant number because it is used to measure appreciation or depreciation. The reason that the median is used, and not the average, is because if there were to be a few more sales at either extreme of the price range, it would skew the average in that direction. The median is, therefore, considered a more accurate measure of overall value in the market. In 2007, the median home price in the Charlottesville Area was $288,400. In 2008, the median home price in the Charlottesville area dropped to $277,570 (-4%). Albemarle County is the only area that has experienced an increase in the median (+4%). Lake Monticello experienced a 7% drop in median home price ($230,000 vs. $247,500). Fluvanna County as a whole (including Lake Monticello) has experienced a 6% drop in the median price. It would appear that, while the area is certainly experiencing price depreciation, it is very slight. There are many areas of the country where depreciation is in the double-digits. While it might be shocking to local residents, the Charlottesville Area is in much better shape than many parts of the country.
Strong Team REALTORS
Median Price by Area 330,000 288,750
320,600 307,000
247,500
310,000 300,000 280,000 265,000
288,400 277,570
285,000 260,000
259,000
247,500
243,250
230,000
206,250 165,000 123,750 82,500 41,250 0
Albemarle Charlottesville Fluvanna
2007 Strong Team REALTORS
Greene
Nelson
*Lake Mont.
Total
2008
* This column refers to Lake Monticello only. Fluvanna column includes Lake Monticello.
Source: CAAR MLS
Days on Market by Area The following chart shows the average Days on Market (DOM), broken down by area. It compares the average DOM, through Sept. 30, in 2007 and 2008. This chart also includes a column for Lake Monticello only. DOM is a statistic that measures how many days a property is active in the MLS before it goes under contract. The higher the number, the longer properties have remained on the market. Because of the way the DOM statistic is calculated, there is always a possibility that the number does not actually reflect the true DOM for a property, but since it is the only measure we have, we rely upon it anyway. Typically, when DOM isn’t completely accurate, it is usually underestimating the true DOM of a property. So if the average DOM for any area is inaccurate, you can safely assume that the number should be higher, not lower. As you might expect, the average DOM has risen during 2008 for every individual area, and for the Charlottesville Area as a whole. Across the area, average DOM rose almost one full month (26 days) in 2008. It now takes an average of 115 days for a home to go under contract in the Charlottesville Area. In Fluvanna as a whole (including Lake Monticello), the average DOM was 119 days. This is 31 days more than in 2007. In Lake Monticello, specifically, the average DOM was 109 days. This is a 32-day increase over 2007. If we combine these numbers, we can see that average DOM for properties in Fluvanna County, specifically, should have been 129 days. Of course, all of these numbers are averages. Some homes sell very quickly, in days or weeks, while others remain on the market for months, or even a year or more. The most significant factor in a higher DOM for an individual property is its price. Properties that are priced higher than their competing comparable properties typically have a much higher DOM. Strong Team REALTORS
Days on Market by Area
0.000
150
8.571 119 113
7.143
5.714
110
91
108
88
115
111
109
93
89
79
77
4.286
2.857
1.429 0
Albemarle Charlottesville
Fluvanna
2007 Strong Team REALTORS
Greene
Nelson
*Lake Mont.
Total
2008
*This column refers to Lake Monticello only. Fluvanna column includes Lake Monticello.
Source: CAAR MLS
Inventory for Fluvanna & Lake Monticello The following two charts shows the total inventory of homes for sale in Fluvanna (including Lake Monticello), and for Lake Monticello only, broken down by month. For the purpose of this report, the inventory was measured on the first day of each month. For example, as of September 1st of 2008, there were 376 homes on the market in Fluvanna County. 174 of those were located in Lake Monticello. The encouraging thing about these numbers is that the gap between inventory numbers in 2008 compared to 2007 has grown closer. At the beginning of the year, there were significantly more homes on the market in 2008. By the end of the year, the inventory numbers in both Lake Monticello and Fluvanna were almost identical. Any reduction in inventory is a positive sign for homeowners who are in a situation where they must sell. While sales have fallen, if the inventory continues to remain fairly stable, it will help the people who must sell their homes. Of course, it is impossible to tell exactly why the inventory numbers are reducing. Since the number of sales has been significantly reduced, there must be another reason that inventory numbers would remain virtually the same by the end of 2008 and 2007. One possible reason is that homes are coming out of the sales inventory, and going into the rental inventory. Another possibility is that many homes in foreclosure do not make it into the MLS, so they are not reflected in these inventory numbers. The most likely reason, however, is probably that the homes are the market belong to the most motivated sellers. There are less people out there attempting to “flip” properties for profit, or selling just because they would like to move.
Strong Team REALTORS
Fluvanna Total Inventory by Month* 400
391
388
378
380
376
370 358
360
350
382
380 365
372 382
368
349
339
340
364
349
323
345
332
320
325
300 293
280 260 240
297
269
Jan.
Feb.
Mar.
Apr.
May
2007 Strong Team REALTORS
Jun.
Jul.
Aug.
Sept.
Oct.
Nov.
Dec.
2008
*Inventory is counted on the 1st day of every month
Source: CAAR MLS
Lake Monticello ONLY Inventory by Month* 200 190 181
185
186
182
184
185
180
174 183 168
170 160
174
157
170
174
163
167
165
166
Nov.
Dec.
157
150 150
140 130 120
172 179
128
131
135
110 100
Jan.
Feb.
Mar.
Apr.
May
2007 Strong Team REALTORS
Jun.
Jul.
Aug.
Sept.
Oct.
2008
*Inventory is counted on the 1st day of every month
Source: CAAR MLS
Sold vs. List Price Fluvanna & Lake Monticello The following chart shows the relationship between the listing price and the sold price of properties in Fluvanna and Lake Monticello. It compares this percentage in 2007 and 2008. The “Fluvanna” column includes all homes, while “Lake Monticello” refers only to homes in Lake Monticello. This statistic is important because it represents the percentage of the list price that owners are receiving when their home is sold. The statistic uses the list price of the home on the day it goes under contract, and compares that to the sold price on the contract. One thing to keep in mind is that in some transactions, there are closing costs credits, or other credits included in the contract price. These credits have the effect of inflating the contract price, as the seller of the home does not actually keep the money. Therefore, the percentage of sold vs. list price can sometimes be slightly inflated. As you can see, sellers are receiving slightly less for their homes in 2008, compared to 2007. This isn’t surprising, as high inventories, low interest rates, and falling prices have made buyers very value-conscious. In Lake Monticello, sellers averaged just over 96% of list price when they sold the home. For the county overall, the number was slightly better, at just shy of 97%. We can infer from the numbers that sellers not in Lake Monticello were probably closer to 98%. This will be yet another statistic that we will closely monitor in 2009 to see how it compares to 2008, as that will be an important indicator as to where the market might be headed. As with many of the other statistics, these numbers represent an average across all homes sold. Meaning that many homes are selling for at or near list price, while others are selling for well below the list price at the time of contract. The statistic does show, however, what a seller and buyer can reasonably expect to receive in a negotiation. Of course, each individual property presents a unique situation, so buyers and sellers should act accordingly. Strong Team REALTORS
Sold Price vs. List Price (percentage) 100 99 98 97
97.40
97.40 96.89
96
96.26
95 94 93 92 91 90
Fluvanna
Lake Monticello ONLY
2007 Strong Team REALTORS
2008 Source: CAAR MLS
Lake Monticello Waterfront Sales Stats The following chart refers to only waterfront homes and condos sold at Lake Monticello through Sept. 30 in 2007 and 2008. Included in the stats are only those homes that were on the main lake. There was one home sold in 2007 located on Tufton Lake, which was excluded from the results. The chart shows the average price and the median price of waterfront homes sold. As you can see from the chart, both the average and the median price of waterfront homes has increased in 2008 compared to 2007. The number of sales has increased also, rising from 13 to 17 (an increase of 24%). In 2008, the average price of sold waterfront homes was $487,342, and the median price was $477,000. For 2008, the highest-priced waterfront home to sell was $612,000, while the low was $325,000 (a condo). In 2007, the high and low was $700,000 and $365,000, respectively. It would seem that 2008 was a pretty good year for waterfront home sales. The most difficult thing about the waterfront home market is that each home is truly unique. Each has its own features and challenges, making finding comparable sales very difficult at times. The fundamentals of real estate still hold true, however, in that sellers need to pay attention to comparable homes, and price accordingly. For buyers, sometimes patience is required to find the waterfront home that is just the right fit. Despite the fact that the median and the average price of waterfront homes was higher in 2008, there is still great value to be found in the waterfront market, and demand is still healthy.
Strong Team REALTORS
Lake Monticello Waterfront Sales Statistics* 490,000
487,342
477,000
441,000
434,000
430,000
392,000 343,000 294,000 245,000 196,000 147,000 98,000 49,000 0
Median Price
2007
Average Price
2008
*Stats include homes and condos on the main lake. 13 sales in 2007, 17 sales in 2008 Strong Team REALTORS
Source: CAAR MLS
Conclusion 2008 was one of the most challenging years in history for the American real estate market, and the Charlottesville Area was no different. Here, we experienced our own challenges, and home prices and sales ended at levels that haven’t been seen in many years. Many of the factors that lead to the drop in sales and falling median home prices were external economic factors. Factors over which buyers and sellers had no control. As we move into 2009, there will be much attention given to the national economy, the local economy, and the employment situation in our area. There is reason to be positive, however, as the challenges faced in our area were not nearly as great as those faced by many areas throughout the country. The Charlottesville Area, and particularly Lake Monticello and Fluvanna County, all remain desirable areas in which to live for a number of reasons. There is no reason to think that this will change any time in the near future. Interest rates have also remained at historic lows, and credit availability has thawed a bit since the end of 2008. All of this might help to keep our market stable in 2009. Everyone wants predictions for 2009. Most predictions that are made are highly inaccurate, and really just guesses. We will spare you from our guesses here. What we can say, however, with great confidence, is that the current market conditions of high inventory, and low appreciation are here to stay. The days of the red hot real estate market of 2000-2005 are long gone. This is probably a good thing, as market stability is to the benefit of both buyers and sellers. Buyers and sellers should arm themselves with as much knowledge and information as possible, and make an effort not to ignore the market realities in favor of wishful thinking. Being grounded in reality and good information provided the best opportunity for reaching your real estate goals. Strong Team REALTORS
Thank you We at Strong Team REALTORS would like to thank you for taking the time to read our Fluvanna & Lake Monticello Real Estate Market Analysis. We hope that you have found all of the statistics and analysis both informative and valuable. We encourage you to share this document with others who you think may find it valuable. If you would like more copies of this document, or to automatically receive our future market analyses, please call us at 434-589-5800, or send an email to [email protected]. It is always one of our goals to empower our clients and customers with the knowledge necessary to achieve their real estate goals. We are always happy to help you with any questions you might have about real estate, from statistics to staging advice, we are happy to share our knowledge and expertise wherever it is needed. Please don’t hesitate to contact us with any additional questions or comments.
Strong Team REALTORS 86 Joshua Lane Palmyra, VA 22963 434-589-5800 StrongTeamRealtors.com Strong Team REALTORS
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