New Construction continues to impact the Charlottesville and Central Virginia housing market. According to the Charlottesville Area or Realtors recently released 2017 3rd quarter market report, 997 homes sold compared to 1021 during the same time in 2016. Out of the 997, the CAAR MLS showed that 167 (16.7%) were new homes. This was an increase from 160 (15.6%) of the 1021 sold in the 3rd quarter of 2016. Even with the increase, the 997 reflected a 2.4% decrease in homes sold year over year.
The other important factor not mentioned in the CAAR report or the article in the Daily Progress is how new home sales impacted median home prices. The report shows prices rose 8.5% to $296,300 but if you take the new construction average median prices ($475,113) out of the equation, the area’s median sales price decreases to $260,321. Two concerns come out of this analysis. 1) The average new home median price of $475,113 continues a trend away from affordable housing. 2) the average median price for existing homes substantiates that there is not the demand for resale homes in the upper price ranges. Case in point-of the 195 (20% of 997) homes sold over $500,000 in the 3rd quarter, 74 (38% were new)
It is important to consider these factors If you are thinking of buying or selling later this year. For buyers, it is a great time to buy a home if you are looking in the upper price ranges in existing neighborhoods. If you are looking in the lower price ranges especially for detached homes, they will be hard to find and you will be competing with others looking to do the same. If you are wanting to buy new expect to see higher prices due to demand and the increase cost of building materials. These costs are already going up and it will only continue given the rebuilding needed from the hurricanes and fires. For sellers, there will not be as many buyers as we move into the winter/holiday season. Getting your home in the best condition possible and pricing it competitively is a must. This is especially the case if you are in a higher priced neighborhood.
For a detailed conversation with CAAR leaders about this report, click here.
Michael Guthrie, CEO and Broker - Roy Wheeler Realty Co.