A few months ago, we took a closer look at inventory levels for homes throughout Charlottesville and Albemarle County. Since I’m a big believer that inventory levels are a predictor of future real estate values, I’d like to take another look...this time for single family and attached homes in Albemarle County.
As you may recall, Steve Harney introduced this chart to me – it relates current inventory levels to a 12-month forecast in real estate values:
Is this theory exact? No. But it makes sense. It’s basic supply and demand.
So, what exactly do I mean when I refer to ‘inventory levels’? Well, here’s the quick description: inventory level is basically the supply of homes at specific date divided by the sales during a month. For example, if there are 600 homes on the market right now and there have been 50 sales in the most recent month, there is a 12 month supply of homes (600/50). In this example, if not one new home was listed for sale over the upcoming year, there would (theoretically) be no inventory of homes left after 12 months.
So check out these inventory levels for single family detached Albemarle County homes:
While the numbers aren’t pretty for March 2010 (17.52 months of inventory...that’s a lot), it does show that things are improving ever so slightly since March 2009 had almost 19 months of inventory. But I think that looking on a monthly basis is a bit deceiving since there were only 38 sales – that sample size just isn’t big enough to deduct the truth from.
I like to look at 12 month periods. The last 12 months are showing some improvement from the 12 month period before that. Inventory levels are down (13.74 to 12.28). Sales are up (672 to 648). Days on Market are steady at 122. But median price is down from $390,000 to $356,250. This median price drop is actually a good thing and shows that our market is correcting (something that has to be done to get back to a ‘normal’ market).
And now Attached Albemarle County homes...
These numbers are actually improving significantly. While the list-to-sale price ratios may be skewed by new home sales (sorry, Sellers, homes aren’t really selling for 99% of list price), the overall stats are actually pretty darn positive. Inventory levels for the previous 12 months are hovering just about 6 months – that is the definition for a ‘balanced market.’ Sales are up very dramatically (307 vs. 226) and median prices are down from $240k to $230k.
Are attached homes rebounding before single family homes in Albemarle County? This would definitely be odd, but it looks to be the case.
We’ll keep our eyes on this and will let you know how things transpire as the Spring market continues...
