Charlottesville / Central Virginia Region Q2 2012

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Heating Up At The Core

Weve always said that the local real estate market recovery will start at the core of our market. Based on what we are seeing in the marketplace, our core markets of the City of Charlottesville and Albemarle County are starting to gain a bit of momentum that will hopefully lead to continued positive signs in the local real estate market. Overall, the Charlottesville MSA had a solid Q2. Volume is up and inventory is down - two key components that are great to see. Total year-over-year sales were up 2.7% and total inventory fell by 7.5%. In addition, months of inventory also improved from Q2 2011 and fell to 8.76 months of supply. Once again, single family homes continue to lead the way in sales across most sub-markets and attached and condominium sales are performing admirably. While its great to see the overall market creeping back to solid ground, its even better to see our core market segments showing stability and growth. For the first time since we began running our Quarterly Nest Report in 2009, the five year trend for home sales in Albemarle County is trending in a positive direction. With a 4% increase from Q2 2011, Albemarle has now seen four straight quarters of year-overyear sales increases. Inventory levels are moving in the right direction also with total inventory levels down 3% year-over-year. But...lest we get too confident, keep in mind that lower inventory is not necessarily a sign of a recovery; there are a lot of upside-down homeowners who would love to sell but cant. Until we see appreciation to the point where they can sell, were not going to see a true recovery. The City of Charlottesville continued its hot streak this past quarter. The 154 total sales in Q2 were a 11.6% increase from last year and represents the most Q2 sales since 2008. Single family homes in Charlottesville saw a 19.4% increase in closed sales and a 14.9% increase in median prices from last years second quarter. Simply put, the Charlottesville real estate market is very active right now. And, yes, inventory levels are down in Charlottesville, too. Overall inventory levels are down to 302 units and 5.59 months of supply. Single family homes are even more scarce in the City: with 196 units for sale and only 4.26 months of supply. (Remember, anything less than 6 months of inventory is considered a sellers market. Were not quite ready to make the official sellers market statement, but its trending that way right now in this market segment.) Theres also a shift in both Albemarle and Charlottesville in that a larger percentage of homes in higher price ranges are selling. Whereas sales in the last 24 months have been heavily skewed towards homes in the under $250,000 category, we are starting to see a higher percentage of home sales in upper price brackets. (See pages 5 and 7 for more details.) This shift is most likely due in part to the return of move-up buyers to the market, as well as buyers who have been sitting and saving on the sidelines who are finally seeing that now is their time to buy. With improving market conditions, move-up buyers are now more likely to be able to sell their homes and buy their next home. This strong second quarter is also impressive for another reason: sales numbers in Q2 2012 are very comparable to sales numbers in Q2 2010. Whats the significance? If you remember, the 2010 tax credit boosted sales in Q2 2010. That tax credit, arguably, did not create many buyers. Instead, it provided additional motivation for buyers to purchase sooner in 2010...thus artificially boosting sales in Q2. Q3 2010 sales dropped off dramatically because of the tax credit. Its a great sign that local sales numbers for this past quarter are rivaling those stats. In closing, were beginning to feel more confident that the Charlottesville area real estate market is beginning to stabilize. Obviously, the historically low interest rates are helping. While there continues to be some concern with how short sales and foreclosures will affect values moving forward, its clear that consumers are beginning to gain more confidence in the local and national economies...and are feeling better about investing their money back into real estate.

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Central Virginia/Charlottesville MSA Market Snapshot

Once again, the overall five year trend for the MSA trends downward...but ever-so-slightly. After years of a fairly significant downward trend, we seem to be seeing a shift towards the positive side, which is great news. Total Q2 sales for the MSA totaled 780, a slight 2.7% increase from the 759 total sales in Q2 2011. Sales of both single family homes and attached/condos were up year-over-year. Single family home sales increased 2.2%, while attached/condos bounced upward by about 4.5%. Days on Market moved downward by 7.7% to 108 days for single family homes and increased slightly by 4.5% to 186 days for attached/condos.

Five Year Trend of Sales Activity (Number of Sales)

1,400 1,200 1,000 800 600 400 200 0

5 YEAR TREND

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Median prices in Q2 increased for both single family homes and attached/condos in the Charlottesville MSA. Single family home prices jumped by 5.5% to $290,000, while attached/condos bounced slightly upward by 0.5% from $189,000 to $190,000. Inventory levels continue to fall. This is great news. Single family inventory fell to 1820 total units, representing a drop of 5.7%. Attached/condo inventory fell by 14.4% to 465 total units. Months of inventory stayed in the single digit territory: there is a 7.98 month supply of single family homes and 6.73 months of attached/ condo inventory. Keep in mind that months of inventory levels are typically low in June. Nonetheless, year-over-year inventory levels are decreasing or staying relatively steady across almost all market segments.

MSA (Albemarle, Charlottesville, Fluvanna, Greene, Louisa, and Nelson)

Average List Price Average Sale Price $342,800 -0.6% $344,725 -0.2% $345,365 Median Sale Price $290,000 5.5% $275,000 -6.1% $293,000 Price per Square Foot $140.00 -1.4% $142.00 -2.1% $145.00 Avg Days on Market 108 -7.7% 117 9.3% 107 Total Sales 594 2.2% 581 -8.6% 636 Total Inventory 1820 -5.7% 1929 -6.5% 2063 Months of Inventory 7.98 -7.3% 8.61 12.4% 7.66

Single Family

Q2 2012 Change Q2 2011 Change Q2 2010

$360,841 -0.4% $362,183 0.5% $360,319

Attached / Condo

Average List Price Q2 2012 Change Q2 2011 Change Q2 2010 $215,655 5.6% $204,208 -10.7% $228,597

Average Sale Price $210,376 5.9% $198,569 -12.8% $227,642

Median Sale Price $190,000 0.5% $189,000 -14.1% $220,000

Price per Square Foot $139.00 -4.1% $145.00 2.8% $141.00

Avg Days on Market 81 2.5% 79 -7.1% 85

Total Sales 186 4.5% 178 -19.5% 221

Total Inventory 465 -14.4% 543 -6.4% 580

Months of Inventory 6.73 4.2% 6.46 10.4% 5.85

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Albemarle County Market Snapshot

Q2 sales of single family homes and attached homes were strong in Albemarle County. However, condominiums suffered a bit. Overall sales increased by just over 4% from Q2 2011 (from 389 to 405). Single family sales were up (+8%), as were median prices (+1.4%). The average price per square foot of single family homes fell by 5.0%. Attached homes in Albemarle also fared relatively well: sales were up (3.4%). Median prices for attached homes decreased slightly (-1.4%) and price per square foot was flat. Condo sales in Albemarle dropped dramatically (-21.6%), median prices fell (-2.8%) and days on market increased to 110 days.

Five Year Trend of Sales Activity (Total Number of Sales)

600

5 YEAR TREND

500

400

300

200

100

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

The positive five-year trend line for total sales is the biggest news for Albemarle County. This is the first time since we began our Quarterly Nest Reports in 2009 that the trend has been positive. Contracts Written in Q1 - typically an indicator of future sales - were up for single family and attached homes. Single family contracts written jumped by 14.9% while contracts on attached homes had a modest 5.1% gain. Albemarle condos suffered with a 16.7% drop in contracts. Overall inventory levels in Albemarle County also improved. Months of inventory for all properties fell from 8.11 in June 2011 to 7.4 in June 2012. In addition, total homes for sale also fell slightly from 1201 to 1162 homes.
Average Average Median Avg Days List Price Sale Price Sale Price on Market Avg $ PSF $151 9.4% $138 $151 -5.0% $159 Total Sales # 285 88.7% 151 285 8.0% 264 Average Average Median Avg Days List Price Sale Price Sale Price on Market Q2 2012 245,074 243,298 230,000 72 -22.6% 93 72 -1.4% 73 Avg $ PSF $132 2.3% $129 $132 0.0% $132 Total Sales # 91 54.2% 59 91 3.4% 88

Single Family

Q2 2012 442,396 420,610 350,500 Change 2.1% 2.4% 3.1%

104 4.0% 100 104 -8.0% 113

Attached

Change

1.5%

1.1%

-3.2%

Q1 2012 433,379 410,593 340,000 Q2 2012 442,396 420,610 350,500 Change -6.8% -6.5% 1.4%

Q1 2012 241,531 240,672 237,620 Q2 2012 245,074 243,298 230,000 Change 5.7% 5.6% -2.0%

Q2 2011 474,769 449,665 345,750

Q2 2011 231,886 230,479 234,700

Average Average Median Avg Days List Price Sale Price Sale Price on Market Q2 2012 163,627 154,987 120,000 110 -36.4% 173 110 80.3% 61

Avg $ PSF $122 4.3% $117 $122 1.7% $120

Total Sales # 29 11.5% 26 29 -21.6% 37

Contracts Written
Q2 2011 Single Family Attached Condos 241 98 42 Q2 2012 277 103 35 Change 14.9% 5.1% -16.7%

Condos

Change

5.1%

2.5%

18.6%

Q1 2012 155,726 151,240 101,200 Q2 2012 163,627 154,987 120,000 Change 12.1% 11.6% -2.8%

Q2 2011 145,956 138,819 123,500

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Albemarle County Market Snapshot (Part 2)

Albemarle County Sales by Sub-Area

9% 14% 7% 10% 6%

Albemarle County Sales by Type

17%

7%

22%

70% 20% 18%

29 North Crozet

Rio Ivy

Earlysville Keswick

Southside Barracks

Single Family

Attached

Condos

Sales in Keswick, Southside, 29N, and Crozet once again led the way in Albemarle County. Strong new construction sales in Crozet helped boost it to the #1 sales area in Q2 with 1 out of 5 home sales occurring in Crozet. As compared to Q1: 29N increased from a 14% market share to 17%, Keswick fell from 17% to 14%, and Southside rose from 14% to 18%. Earlysville, which has been suffering for a few quarters now, posted a stronger quarter - increasing from 3% to 6% from Q1 2012. Single family homes made up 7 out of every 10 sales in Albemarle County in Q2. This is up from 63% in Q1 2012.

Albemarle County Percent of Sales by Price Range

Q2 12 35% 46% 14% 3% 2%

Q1 12

44%

39%

10%

5%

3%

Q4 11

44%

37%

13%

3%

4%

Q3 11 0%

42% 25% 50%

42% 75%

10%

3% 2% 100%

0-250K

250K-500K

500K-750K

750-1M

1M+

Home sale price distribution changed a bit in Q2, possibly signaling consumer confidence with a penchant for higher priced homes as compared to the previous three quarters. Homes under $250,000 dropped to only 35% of all total sales. $250,000 - $500,000 homes made up the majority of sales in Q2 with a 46% share. $500,000 - $750,000 home sales also increased to 14% of the market, that segments highest share in the previous 12 months. While homes over $750,000 made up a smaller percentage of the market as compared to the previous 2 quarters, there were 11 sales in the $750k $1 million range and 7 sales over a million dollars in Q2. Those 18 total sales represent the most $750k+ sales in a quarter in the last 12 months.

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Charlottesville City Market Snapshot

The Charlottesville City real estate market continues its comeback with the 4th straight quarter with year-over-year sales increases. The Citys 154 total sales in Q2 represent the highest Q2 sales volume since 2008. As compared to Q2 2011, total sales were up 11.6% (154 vs. 136) in 2012. Charlottesville single family homes led the way with a 19.4% year-over-year increase. Attached and condominium sales were flat from 2011. However, even with the recent increase in sales, Charlottesville Citys five year trend line is still on a downward slope. This is due, in large part, to the extremely low sales throughout the 2nd half of 2009 and throughout 2010.

Five Year Trend of Sales Activity (Total Number of Sales)

350 300 250 200 150 100 50 0

5 YEAR TREND

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Median prices in the City also bounced upward in Q2. Single family (+14.9%), attached (+6.7%), and condominium (+12.5%) all showed increases in median prices. Average sales price also showed increases across the board. Expect Charlottesville Citys sales success to continue: contracts written were up in Q2 for single family homes (+15.53%) and for attached homes (13.33%). Contracts written for Charlottesville condominiums were flat year-over-year.

Average Average Median Avg Days List Price Sale Price Sale Price on Market

Avg $ PSF $170 14.9% $148 $170 7.6% $158

Total Sales # 111

Average Average Median Avg Days List Price Sale Price Sale Price on Market Q2 2012 196,690 193,485 200,950 86 -42.3% 149 86 -39.0% 141

Avg $ PSF $121 16.3% $104 $121 -8.3% $132

Total Sales # 10 42.9% 7 10 0.0% 10

Single Family

Q2 2012 377,963 354,063 290,000 Change 22.9% 21.5% 17.2%

100 3.1% 97 100 -7.4% 108

Attached

82.0% 61 111 19.4% 93

Change

-18.7%

-12.4%

26.8%

Q1 2012 307,509 291,520 247,500 Q2 2012 377,963 354,063 290,000 Change 22.5% 20.5% 14.9%

Q1 2012 241,842 220,899 158,500 Q2 2012 196,690 193,485 200,950 Change -2.1% 1.8% 6.7%

Q2 2011 308,665 293,733 252,500

Q2 2011 200,820 190,080 188,250

Average Average Median Avg Days List Price Sale Price Sale Price on Market Q2 2012 205,200 195,621 180,000 78 -34.5% 119 78 -2.5% 80

Avg $ PSF $184 -8.5% $201 $184 -11.5% $208

Total Sales # 33 50.0% 22 33 0.0% 33

Contracts Written
Q2 2011 Single Family Attached Condos 103 15 34 Q2 2012 119 17 34 Change 15.53% 13.33% 0.00%

Condos

Change

-3.6%

-4.6%

11.1%

Q1 2012 212,881 204,981 161,950 Q2 2012 205,200 195,621 180,000 Change -1.1% 0.5% 12.5%

Q2 2011 207,496 194,554 160,000

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Charlottesville City Market Snapshot (Part 2)

Charlottesville City Sales by Elementary School Area

Charlottesville City Sales by Type

21%

21%

21%

6% 18% 18% 72% 10% 11%

Burnley Moran Jackson-Via

Clark Johnson

Greenbrier Venable

Single Family

Attached

Condos

By school district, sales in the Burnley Moran and Venable districts outpaced the Clark district, which had held the top spot in Q1. Clarks market share fell from 24% to 18%. Sales in the Venable district rose from 16% to 21% from Q1 to Q2. As is the case in Albemarle County, single family homes continue to make up the vast majority of sales in Charlottesville. 72% of homes sold in the City were detached single family (compared to 69% in Q1).

Charlottesville City Percent of Sales by Price Range

Q2 12

54%

36%

6%

3% 2%

Q1 12

60%

34%

3%

2%1%

Q4 11

59%

33%

3%

3%

3%

Q3 11 0% 25%

61% 50% 75%

33%

4% 1% 1% 100%

0-250K

250K-500K

500K-750K

750-1M

1M+

The sub-$250,000 market in the City slowed a bit this past quarter. Representing 54% of the market, sub $250,000 homes were the only pricing segment to decrease from Q1. The $250,000 - $500,000 segment showed a slight increase to 36% of the market (up from 34% in Q1). In more good news, the City saw a large increase in $500,000+ sales. There were 9 sales between $500,000 - $750,000, 4 between $750,000 - $1 million, and 3 over $1 million: each of these numbers represents the highest totals for each category over the last 12 months. Obviously, this is a great sign that higher priced homes are selling again.

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Fluvanna County

Average List Price

Average Sale Price $206,609 -3.2% $213,368 -10.1% $237,444

Median Sale Price $171,500 -12.5% $196,000 -8.4% $214,000

Avg Days on Market 93 -28.5% 130 56.6% 83

Total Sales # 100 28.2% 78 -21.2% 99

Total Inventory 364 -5.2% 384 -2.0% 392

Months of Inventory 8.87 -35.3% 13.71 46.9% 9.33

Overall

Q2 2012 Change Q2 2011 Change Q2 2010

$214,597 -4.2% $223,921 -6.8% $240,162

One word for Fluvanna: Wow. Fluvanna was hot in Q2. Year-over-year sales were up from 78 to 100 (+28.2%), total inventory was down to 364 units (-5.2%), and months of inventory decreased significantly to 8.87 months (-35.3%). In addition, contracts written were up 65.8% (from 76 to 126). Whats brought this on? Lower prices and underwater homeowners. Median sales prices have plummeted over the last few years in Fluvanna. Median prices in Q2 2012 are off almost 20% from just 2 years ago. Buyers are clearly being attracted to these lower prices in Fluvanna.

Contracts Written
Q2 2011 Q2 2012 Change

76

126

65.8%

Greene County

Average List Price Q2 2012 $236,698 -1.2% $239,512 -16.7% $287,646

Average Sale Price $233,798 -2.0% $238,523 -14.7% $279,668

Median Sale Price $240,000 6.0% $226,500 -9.0% $249,000

Avg Days on Market 128 25.5% 102 -7.3% 110

Total Sales # 45 -32.8% 67 -2.9% 69

Total Inventory 255 5.4% 242 -3.6% 251

Months of Inventory 10.2 26.6% 8.06 -10.0% 8.96

Overall

Change Q2 2011 Change Q2 2010

As hot as the Fluvanna real estate market was in Q2, Greene County is that cold. Greene sales were off over 32% from Q2 2011. In addition, inventory (+5.4%) and months of inventory (+26.6%) both saw fairly large year-over-year increases. Days on market in Greene were up from 102 days from Q2 2011 to 128 days in Q2 2012. Things continue to be on the downward trend for Greene: contracts written in Q2 were off by 30% from last year. Greene County real estate saw fairly healthy increases during 2011 and it seems as though values may now be turning off potential buyers. The slowdown in Greenes real estate could also be tied to the slight drop in expected DIA/NGIC jobs.

Contracts Written
Q2 2011 Q2 2012 Change

70

49

-30.0%

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Louisa County
Average List Price Q2 2012 $239,303 10.6% $216,296 -9.9% $240,147 Average Sale Price $226,975 7.8% $210,490 -9.5% $232,687 Median Sale Price $160,000 -3.3% $165,500 -23.6% $216,500 Avg Days on Market 97 -4.9% 102 -5.6% 108 Total Sales # 41 0.0% 41 -33.9% 62 Total Inventory 213 -14.5% 249 2.9% 242 Months of Inventory 11.83 -19.2% 14.64 39.2% 10.52

Overall

Change Q2 2011 Change Q2 2010

Louisa County has seen a fairly healthy real estate market over the last few quarters. Q2 sales in Louisa were flat and median sales prices dropped ever-so-slightly to $160,000 (-3.3%). However, on the plus side, total inventory fell by 14.5% to 213 total units and months of inventory dropped a whopping 19.2% to 11.83 months of supply. Those are drastic improvements in inventory levels - that should bode well for future sales in Louisa. Along those lines, contracts written in Q2 were up 23.5% from last year. So, Louisa continues to show some solid real estate numbers.

Contracts Written
Q2 2011 Q2 2012 Change

51

63

23.5%

Nelson County

Average List Price Q2 2012 $248,765 -23.9% $326,863 -9.8% $362,533

Average Sale Price $230,442 -24.3% $304,335 -10.6% $340,424

Median Sale Price $200,000 -13.0% $230,000 -26.5% $312,750

Avg Days on Market 181 5.8% 171 21.3% 141

Total Sales # 35 -27.1% 48 9.1% 44

Total Inventory 340 -10.8% 381 -11.4% 430

Months of Inventory 28.33 11.5% 25.4 -17.3% 30.71

Overall

Change Q2 2011 Change Q2 2010

Nelson County is still feeling the aftershocks of Wintergreens financial crisis. Even with the signs pointing to a new ownership group, it will take a while for Nelson to achieve some stability. Year-over-year total sales fell by 27.1% in Q2. In addition, median sale prices (-13%), average sale prices (-10.6%) and average list prices (-23.9%) were all down. While total inventory also fell (-10.8%), the lack of sales caused the monthly supply in Nelson to jump by 11.5% to 28.33 months. However, contracts written in Q2 2012 were off by only 4 from 2011 (38 vs 34). Heres to hoping that the Nelson County real estate market can stabilize soon.

Contracts Written
Q2 2011 Q2 2012 Change

38

34

-10.5%

*Some statistics in this report come courtesy of the Charlottesville Area MLS as of 7/9/12.

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