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Charlottesville area home prices increase, inventory still low

The home market in Central Virginia continues to be a seller’s market, according to a new real estate report.

The first-quarter report from the Charlottesville Area Association of Realtors shows a 17% decrease in the number of homes sold in the region in the first quarter of 2022 compared with the same period in 2021.

During the same time, median sales prices rose in January through March by $45,000, or 13%, compared with that time period last year. The median sales price is now $87,900 higher than it was just two years ago.

“The first quarter compared to other years is still very strong, and it’s fueled by strong economic conditions, strong job growth, low unemployment, but we’ve got shaky consumer confidence starting, resulting from rising mortgage rates, inflation and the war in Ukraine,” CAAR President Pam Dent said.

CAAR covers the city of Charlottesville and Albemarle, Greene, Nelson, Louisa and Fluvanna counties.

“A lack of inventory has been the primary constraint on the market and there would have been more sales if there was more inventory,” the report states. “Market conditions could be changing, as inventory may have bottomed out in the Charlottesville region and higher mortgage rates could dampen demand.”

Inventory is down by just 16 listings, or 3%, at 472 listings at the end of the first quarter, compared with the end of the first quarter of 2021. Compared to a year ago, the number of active listings actually increased significantly in Fluvanna, Greene and Louisa counties, the report said.

Interest rates are rising in response to actions taken by the Federal Reserve, the report said, including a boost in short-term interest rates and a pullback in the purchase of bonds and mortgage-backed securities, and the Fed has indicated several more short-term rate increases during 2022.

Homes in the region sold quickly compared with last year’s first quarter, the report shows. They were on the market about 30 days on average overall, which is 15 days faster than a year ago, and 48 days faster than the first quarter of 2020.

All localities covered in the report saw the number of home sales decrease compared with the first quarter of 2021. Fluvanna saw the highest percent decrease of 25%, while Greene saw the lowest at 3% fewer homes sold. In Charlottesville, the number of homes sold decreased 7% and Albemarle County saw home sales decrease 19%.

Sales in Nelson County decreased by 12% compared to the first quarter of 2021, while Louisa saw a 17% decrease in homes sold.

Median sales prices across the region rose 13% over the first quarter of 2021, to $389,900. That’s a 41% increase from the first quarter of 2019, and a nearly 30% increase from the first quarter of 2020.

“If people are waiting for a drastic price reduction in the market, I don’t think that they’re going to see it,” CAAR President Elect S. Lisa Herndon said. “If anything it’s going to maintain pretty steadily where it is.”

Fluvanna led the region, with median sales prices increasing 22%, from $270,070 in the first quarter of 2021 to $335,263 in 2022’s first quarter.

Albemarle median sales prices rose 11%, from $429,900 in 2021’s first quarter to $476,750 this year. Charlottesville sales prices rose 4%, from $397,650 in 2021’s first quarter to $412,000 this year.

Louisa prices rose 11%, to $344,914 this year from last year’s median first-quarter price of $282,651. Greene saw a 7% price rise, from $312,000 to $335,000, and Nelson prices jumped 17%, from 2021’s $308,500 to 2022’s first-quarter price of $361,250.

The report said new residential construction “continued to be brisk” in the first two months of 2022. In January and February, there were 286 new construction permits, “which is up significantly from prior years”. In the first two months of 2022, more than 70% of new housing permits were for the construction of single-family homes.

Dent said with low unemployment and median sale prices increasing, house affordability is concerning.

“We are very much for housing for all, affordable home ownership and that you have a fair market, but you do get concerned about whether certain portions of the buyers may be priced out of the home market, and we know how important it is for everyone to have a place to call home,” she said.

Herndon said it’s important to have a good buying strategy with a realtor, and buyers may need to adjust their mindset on what home ownership looks like for them in this market.

“I have definitely sold homes to individuals in this market, first time homebuyers, but we had to make adjustments and we learned very quickly that oftentimes coming in with the list price or asking price is not going to get it done,” she said. “It’s a very strong seller’s market out here, so know what you’re willing to sacrifice and set those expectations and be ready.”

Source: www.dailyprogress.com

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