Housing stock at record-high level

By Seth Rosen

Published: April 13, 2008

Depending on where you stand — seller versus buyer — the first quarter housing market report released today by the Charlottesville Area Association of Realtors is either a depressing read or a report brimming with optimism.
Fewer homes were sold in the region in the first three months of this year than during any similar period since 2000 and housing inventory sits at about an all-time high.
“This is not totally unexpected,” said Dave Phillips, the organization’s CEO. “Whenever you have a market that goes up so rapidly and unsustainably as we did in ’05 and ’06, a rebound drop is natural.”
There were 557 homes sold in the first quarter of 2008, down from 767 in the first quarter last year — a 27 percent drop. And Albemarle County home sales plummeted by 40 percent in that same period.
Additionally, there’s a surplus of homes on the market, the report stated. This time last year there were 3,100 available in Charlottesville, Waynesboro, Staunton and the counties of Albemarle, Augusta, Fluvanna, Greene, Louisa and Nelson. Now the number is 3,673.
“A lot of people are still nervous because of what they read and they feel like there’s uncertainty,” said Greg Slater, director of sales and marketing for Church Hill Homes. “If they don’t have to make a decision, they aren’t making a decision.”
Not surprisingly, homes are taking longer to sell this year. For example, the average number of days on the market in Charlottesville for the first quarter of 2008 was 122, compared with 49 in the first quarter of 2007.
“There is such a glut of inventory that I’ve advised those who don’t have to sell not to,” said Jim Duncan, a Realtor at Century 21 Manley Associates and a real-estate blogger.
In Albemarle, condo sales have been hit the hardest, dropping by 66 percent compared with this time last year. The reason, real-estate experts say, is that the wave of condo conversions has crested and many people no longer see condos as a good investment.
The median sale price of homes in the area has actually jumped from $262,500 to $273,000. The increase is most pronounced in Albemarle, going from $289,000 in the first quarter last year to $340,000 in the same period in 2008. Two major factors explaining the increase, real-estate agents say, are that higher-end homes are not as affected by the mortgage crisis and that moderately priced homes in Albemarle are not as attractive as those in neighboring counties.
The market saturation means that there are good opportunities available, especially for first-time buyers, agents say. Many sellers have been forced to drop their price significantly in recent months.
Denise Kreitzman has learned first-hand how the seller has had to adapt. For more than two months her house languished on the market. But in the 10 days since she dropped the asking price by $50,000, she’s had three interested buyers.
“I see that it’s starting to pick up,” said Kreitzman, a finance manager at REMAX Assured Properties.
Real-estate agents have been urging their clients to be more realistic about what price they can garner.
There are “a lot of homes on the market where owners are not taking a good, hard look at what their price should be,” Slater said.