The New NAR Housing Numbers and Our Local Market

A little over a week ago when I heard NAR was revising their national data, my immediate reaction was… so what? I commented to a colleague that if I challenged them to find an agent with a client that referenced national data when making a home buying or selling decision, they would have a difficult time locating one. I have never had a client reference this data.  I assume there is going to be a lot press surrounding these numbers. While these numbers are going to change, and the numbers of sales is going to decrease, I don’t think it really matters to the overall market. This conversation is far too local and we have far better data available to us in our local MLS. For example, when we tally the numbers, we are going to see more homes sold in 2011 in Albemarle and Charlottesville than did in 2010.

Here is some commentary on this topic from VAR and CNBC for reference.  The data will be release on December 21. (Tomorrow at the time of this post.)

It’s important to understand your segment of the market. I gain a lot of my insight into the marketplace through my relationship with Piedmont Realty and Construction. Understanding the new home market is vital to understanding the overall market. 2011 is going to go down as the worst year in homebuilding since they started keeping records 48 years ago. The number of homes built in 2011 will be just 14% of the number of homes built in 2004. 6 out of 10 privately held home building business that were in operation in 2004 no longer exist.

Piedmont Realty and Construction launched in 2009. In 2011, they will contract for over 70 homes and close over 70 homes in this calendar year. This is truly remarkable and incredibly relevant to our market.

A lot has changed since 2004. The business model is different. Demand has changed. Construction methods to achieve energy efficiency is here to stay. We take orders for new homes now and speculative building is all but gone. I think this is a good thing. I gain an incredible amount of knowledge and insight in to this market by being exposed to all of those sales. Each sale is a tremendous amount of market data. Why did they choose to build? What was the floor plan type chosen and why? What features are most important? What locations are in demand and why? I could go on and on. The order for a new home is the leading edge of demand in the market place. I balance that against my analysis of the resale market and my experience helping buyers in seller in the overall market.

If you are interested in buying or selling in the Charlottesville area real estate market, I am interested in that conversation. Feel free to contact me if you would like to learn more about my approach to helping my clients make the best decision possible in the context of their situation.