Let’s just get this out of the way: There are still a lot of homes on the market in the Charlottesville area. A whole lot. According to the third-quarter report [pdf] by the Charlottesville Area Association of Realtors (CAAR), there are 3,471 homes on the market, 479 more than this time last year and three times the inventory level of three years ago.
The problem? Those homes just aren’t moving.
"I would say that the inventory we have on the shelf right now is probably close to, if not the, high-water mark on properties for sale," says Dave Phillips, CEO of CAAR. "We’ve added a few, and now we’re heading into a slower time of year."
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Sales are still sagging, topping out at 2,884 at the end of the third quarter, the lowest number of sales the area has seen since 2003. The glut of housing is one thing. But median home prices for the area remain fairly stable, firmly entrenching sellers in a buyers’ market.
The median price in Charlottesville is the same as it was at mid-year, $280,000, which will get you roughly three bedrooms and 1,700 square feet. Albemarle’s median price increased slightly from last quarter to $311,644, netting a county buyer three bedrooms and a little over 1,800 square feet.
If these two things combine to make it a good time to buy, as the report notes, why aren’t more houses moving? The answer might lie in a specific segment of the market: first-time home buyers.
Phillips says that first-time buyers have been scared away by reports about the ongoing mortgage crisis and housing slump. Those are the buyers the market needs right now, he says, as other potential buyers are already saddled with homes that they must first sell before buying. It’s a market conundrum worthy of a Joseph Heller novel.
"First-time home buyers have an advantage," says Phillips. "They don’t have a home to sell. We need to get those folks into the market, and that will create the ripple effect."
It’s a simple solution, really: an influx of new buyers to give a slowing market a jump start. "Or maybe a defibrillator," says Phillips, "one of those things they put on your chest and yell, ‘Clear!’ That’s what we need. A market defibrillator."
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