The number of homes sold rose in many parts of the Charlottesville region in January, according to the Long & Foster Market Minute report. Greene County saw the highest increase in unit sales at 27 percent, followed by a 25 percent increase in Albemarle County. With the exception of Albemarle County, median sale prices increased in much of the area when compared to the same month last year. Active inventory levels fell throughout the region.
Throughout the country, inventory of available homes has begun to increase, but at the hyperlocal level many areas are still feeling the squeeze, as seen in the Charlottesville region.
“This low inventory environment is caused by a combination of factors,” said Larry “Boomer” Foster, president of Long & Foster Real Estate. “The main reason is that baby boomers are aging in place and remaining in their homes. Also, you have the combination of people who refinanced or bought at historically low rates that don’t want to move away from that and builders who are unable to keep up with demand for lower priced homes.”
Although mortgage interest rates are expected to increase this year, industry experts lowered their predictions and they continue to remain down.
“I don’t expect that to be a trend moving forward,” Foster said. “We’ve avoided another government shutdown and investors are becoming more confident around U.S./China trade talks. We’ll see money shift out of Treasuries and into equities, which will cause the yield on the 10-year Treasury bond to go up within the next few weeks, unless something else happens in the world economy.”
The housing affordability index improved recently, and Foster noted that while the index has typical seasonal fluctuations, there are three factors that influence those fluctuations.
“The three things looked at in the housing affordability index are mortgage rates, appreciation of homes, and people’s ability to pay – or wages,” Foster said. “When these things come together in the right way, it leads to more affordable housing, though that normally happens this time of year anyway.”