Highest profile - The Landmark hotel shell gets sold to an Atlanta developer in August for $6.25 million.
Biggest condo deal - Three floors of Waterhouse, the new mixed-use structure cantilevered over the old Thomas Tire building, traded hands in July for $9.9 million.
Our local housing market saw a bit of a rebound in 2012, as reported by both Nest Realty and CAAR (the Charlottesville-Albemarle Association of Realtors), and now that the year is drawing to a close, a number of us are wondering what might be in store for 2013. Though making predictions can be a risky business (just look how things turned out for the Mayans), the prospect of missing the mark doesn’t deter some folks from whipping out their crystal balls.
This time last year, TransUnion, a credit reporting agency, predicted we’d see a decrease in the number of delinquent mortgages during 2012, and that prediction held true. Granted, they had a fifty-fifty shot at being right, but movement in the right direction, and incremental improvement, is better than a decline. For 2013, they’re forecasting another drop in delinquencies, although this projection is a good bit more modest than last year’s.
Though their formal 2013 forecast won’t be presented until early January, the National Association of Realtors released a report in June with early projections and some all-around useful information that helps shed some light on future forecasts.
Housing starts, for example, which measure the number of homes under construction, new home sales, and existing home sales are all used as indications of the direction the market will take. According the NAR report, all three indices have been on the rise, which bodes well for the coming year. Housing start rates hit a four-year high in 2012 and are expected to increase 75 percent over the next two years, depending on lending requirements. New homes sales and existing homes sales are also projected to continue their upward movement.
Forbes.com attributes the uptick in housing starts in part to underbuilding– constructing fewer new homes than what is needed to meet demand. A couple of factors that have reduced demand are a decrease in population growth and the fact that bleak employment prospects have forced many adult children to move back in with their parents. Barring a significant improvement in the job market that would enable those adult kids to move out and put a dent in the surplus housing inventory, Forbes is forecasting moderation across the board– a gentle rise in home prices and a similar improvement overall with many homeowners remaining underwater (owing more than their home is currently worth).
Goldman Sachs agrees that improvement in the labor market is a key factor in increasing “household formation” (that’s the part where the adult kids move out of their parents’ basements and get houses of their own). Overall, Goldman, too, tows the middle line in its projections, calling for a 3-4 percent increase in home prices, a slight upsurge that should have a beneficial effect on both the economy and credit availability. Their expert is quick to caution that the effects will vary from market to market, however.
And speaking of individual market variance, how about the market that most of us care about, the greater Charlottesville-Albemarle area market? Well, fourth quarter reports haven’t been released yet, but the market steadily increased its performance throughout 2012, leading to an overall optimistic tone in the CAAR third-quarter report. While the Nest Realty’s November Market Update doesn’t make a prediction for 2013, it echoes the optimism found in the CAAR report, citing a 15 percent increase in sales year-over-year and pointing out that Charlottesville city inventory is lower now than it has been since 2005.
Looking forward is fun, but it can also be fun to take a look back. Here’s a walk back through a number of listings and sales in our area that were interesting for a variety of reasons.