The Nest Report Q1 2012

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The Nest Report (1Q 2012), an honest look at what's happening in the New River Valley real estate market.

Created and published by Nest Realty Group, www.NestRealty.com. Licensed real estate brokers in the Commonwealth of Virginia.

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The Nest Report Q1 2012

  1. 1. New River Valley Q1 2012NestRealty.com 1 of 9
  2. 2. Still Some Work To Do.As news starts to trickle out from other parts of the country that some local real estate markets are shifting from Buyer’sMarkets to Seller’s Markets, there’s definitely reason for some excitement. After dealing with extremely difficult marketconditions over the last several years, you can’t blame anyone for waiting in anticipation that our local real estate markethas finally turned. Unfortunately, the New River Valley isn’t quite there, yet.That being said, there are some positive signs starting to trickle out of the core New River Valley sub-market (Blacksburg)and the overall NRV region. Q1 2012 sales for the overall New River Valley were at their highest point since 2007. Andwhile median prices for single family homes were down slightly (about 4%), single family inventory levels fell from 1924 to1792 homes for sale. This represents a decrease of 6.9%. In addition, total Months of Inventory for single family homes onthe market was also reduced by 12.1%.Attached home sales for the overall NRV didn’t bode quite as well, but didn’t perform poorly either. While sales were offslightly from Q1 2011, inventory levels were also down significantly. Total inventory fell 33.5% and Months of Inventorydropped 31%. That large reduction in year-over-year inventory is a great sign.Real estate recoveries start at the core of markets and New River Valley’s core is Blacksburg. Blacksburg’s numbers in Q1were steady. Sales were down ever-so-slightly, but were in line with the past several Q1s. There’s something to be said forconsistency. Other indicators of the Blacksburg real estate market were good. Median prices for single family andcondominiums were up (attached median prices were off slightly). Single family home sales in Blacksburg were flat, butcondominiums seem to be geared for a comeback.The real recovery in the New River Valley will happen, but we’re not quite there yet. The biggest roadblock to any realestate market recovery is inventory levels (supply). Until inventory and months of inventory reach lower levels in themarketplace, the market truly can’t bounce back. There was a drop in total inventory and months of inventory in just aboutevery category throughout the New River Valley in Q1. That is definitely a step in the right direction.We also keep a close eye on contracts written and pending sales. These are great indicators for the upcoming months andare the best way to forecast the future of the market. Looking at the Blacksburg core market, contracts written were up inQ1 - once again, a good sign.Numbers aside, we’re hearing stories from our team and other local real estate professionals that make us feel as thoughwe are starting to turn a corner. Q1 2012 saw the return of multiple offers, realistic sellers, and an increase in investoractivity. It can easily be argued that these stories from the ‘trenches’ are even more valuable than raw numbers indetermining the future of the market.Overall, the expected job growth, construction starts, and the continued impact that Virginia Tech and the Research Parkhave on the New River Valley will ultimately lead to more sales activity. However, don’t expect the New River Valley realestate market to turn around overnight. Considering the high inventory levels in many of the market sub-categories, thiswill be a slow recovery.NestRealty.com 2 of 9
  3. 3. New River Valley MSA Market SnapshotWhile the overall five year trend for the MSA trends downward, year-over-year sales are on the rise. Total Q1 sales for the New River Valleytotaled the highest Q1 levels since 2007. This marks the third straight quarter where year-over-year sales have been up. Single family home salesjumped from 214 in Q1 2011 to 227 in Q1 2012 - a 6.1% increase. This comes off a 4.4% increase from Q1 2010 to Q1 2011. Attached homesales, however, were off 3.6% (from 28 to 27).Five Year Trend of Sales Activity (Number of Sales) 5 YEAR TREND800600400200 0 Q2 ’07 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 ’12Median prices in Q1 were down for both the single family and attached categories. Single family home median prices in the MSA were down 4.9%,while attached median prices were off 9.4% from Q1 2011. The total volume of real estate transactions in the New River Valley was up in Q1:single family home total sales volume increased 7.1%, which represents an increase of over $2,500,000 from Q1 2011. Attached home salesvolume fell from approximately $4.7m to $4.3m (down 8.2%). Inventory levels remain high, however. There are some positive signs with bothtotal inventory and Months of Inventory numbers coming down significantly from last Q1. Months of Inventory for single family homes across theNRV fell 12.2%, while attached fell 31%. These lower inventory levels must continue to come down for a recovery to take place.MSA (Entire New River Valley MSA) Total Sold Average Median Total Total Months of Volume Sale Price Sale Price Sales Inventory Inventory Single Family Q1 2012 $38,572,456 $169,923 $141,000 227 1792 23.68 Change 7.1% 0.9% -4.9% 6.1% -6.9% -12.2% Q1 2011 $36,030,843 $168,368 $148,250 214 1924 26.97 Change 7.6% 3.1% 6.7% 4.4% 1.2% -3.0% Q1 2010 $33,487,901 $163,356 $139,000 205 1901 27.82 Average Average Median Total Total Months of List Price Sale Price Sale Price Sales Inventory Inventory Q1 2012 $4,332,350 $160,457 $151,500 27 133 14.78 Attached Change -8.2% -4.8% -9.4% -3.6% -33.5% -31.0% Q1 2011 $4,717,210 $168,472 $167,250 28 200 21.43 Change 17.6% 5.0% 11.9% 12.0% -24.2% -32.4% Q1 2010 $4,010,200 $160,408 $149,500 25 264 31.68NestRealty.com 3 of 9
  4. 4. Blacksburg (In Town Limits) Market SnapshotOverall, the Blacksburg real estate market is showing some healthy signs. Q1 2012 sales were down slightly over Q1 2011: from 50 to 46.However, the 46 total sales represents a significant increase over Q1 levels in both 2010 and 2009. Single family year-over-year home sales wereflat, condo sales were up (from 6 to 10) and attached sales were down fairly significantly (from 16 to 8). Total sales volume for both single familyand condos were up, while attached home sales volume dropped over 55%. Median prices for attached (-1.2%) and single family (+2.6%) stayedrelatively flat. However, median prices for Blacksburg condos increased 19.8%.Five Year Trend of Sales Activity (Total Number of Sales) 5 YEAR TREND175150125100 75 50 25 0 Q2 ’07 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 ’12Contracts Written in Q1 - typically an indicator of future sales - were up up for single family homes (+43.2%) and condominiums (+209.1%).However, contracts written for attached homes were off 42.9% from Q1 2011. Clearly, condominiums in Blacksburg are starting to make acomeback. Even though condo sales and median prices are up, the most significant number is the contracts written: up from 11 in Q1 2011 to 34in Q1 2012. Expect Blacksburg condo sales to continue on an upward trend in Q2. Total Average Median Total Total Average Median Total Sales Volume Sale Price Sale Price Sales # Sales Volume Sale Price Sale Price Sales # Q1 2012 7,602,600 271,521 237,475 28 Q1 2012 1,298,500 162,312 165,250 8 Single Family Attached Change 32.5% 13.6% 2.6% 16.7% Change 21.3% -9.0% -1.2% 33.3% Q4 2011 5,737,630 239,068 231,365 24 Q4 2011 1,070,150 178,358 167,325 6 Q1 2012 7,602,600 271,521 237,475 28 Q1 2012 1,298,500 162,312 165,250 8 Change 4.9% 4.9% 2.7% 0.0% Change -55.3% -10.6% -4.5% -50.0% Q1 2011 7,245,260 258,759 231,280 28 Q1 2011 2,904,660 181,541 173,000 16 Total Average Median Total Contracts Written Sales Volume Sale Price Sale Price Sales # Q1 2012 1,346,900 134,690 122,500 10 Q1 2011 Q1 2012 Change Change 204.7% 21.9% 19.8% 150.0% Condos Single Family 37 53 43.2% Q4 2011 442,000 110,500 102,250 4 Q1 2012 1,346,900 134,690 122,500 10 Attached 28 16 -42.9% Change 111.0% 26.6% 12.4% 66.7% Condos 11 34 209.1% Q1 2011 638,200 106,367 109,000 6NestRealty.com 4 of 9
  5. 5. Blacksburg (In Town Limits) Market Snapshot (Part 2) Blacksburg (In Town Limits) Sales by Type 22% 17% 61% Single Family Attached CondosSingle family homes continue to make up the largest percentage of sales within Blacksburg Town Limits. Approximately 6 out of every 10 sales isa single family home. Once again, the biggest change is the increase in the condominium market. Condos made up 22% of total sales inBlacksburg, as compared to 17% for attached homes. Based on the contracts written in Q1, we anticipate that this gap will continue in the nearfuture. Buyers are clearly seeing values in the condo market and as financing for condominiums continues to loosen (albeit only slightly), thelower price points of Blacksburg condos are proving to be attractive. Blacksburg In Town Limits Percent of Sales by Price RangeQ1 ’12 7% 46% 28% 17% 2%Q4 ’11 0% 6% 41% 44% 9%Q3 ’11 7% 33% 34% 22% 4%Q2 ’11 3% 31% 39% 26% 2% 0% 25% 50% 75% 100% 0-100K 100K-200K 200K-300K 300k-500k Over 500KHome sale price distribution gives a good indication on several market trends, including where the buyer demand lies. Over the last four quarters,the $100k-$200k Blacksburg sub-market has seen steady growth - increasing from 31% in Q2 2011 to 46% in Q1 2012. That represents asignificant increase of over 50%. The below $100k market has also seen a fairly large increase. Subsequently, other price categories havedropped. The relative percentage of home sales above $200,000 has dropped. $200k-$300k has fallen from almost 40% of the market to 28%,while the $300k-$500k range has decreased from 26% to 17%.NestRealty.com 5 of 9
  6. 6. Christiansburg (In Town Limits) Market SnapshotThe Christiansburg real estate market lagged slightly in Q1 2012. Total sales in Q1 were down ever-so-slightly: from 47 to 45. However, thismarked the fourth straight decline in Q1 sales within Christiansburg. Single family home sales in Christiansburg dropped from 37 to 34 (-8.1%)and condo sales were flat. Unlike Blacksburg, which saw a fairly significant decrease in Q1 attached home sales, attached home sales inChristiansburg held relatively steady (8 sales in Q1 2011 vs. 9 sales in Q1 2012).Five Year Trend of Sales Activity (Total Number of Sales) 5 YEAR TREND175150125100 75 50 25 0 Q2 ’07 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 ’12Median prices were off across the board in Christiansburg: single family (-5.3%), attached (-5.3%), and condos (-35.7%) each showed declines.Total sales volume for single family and condominiums in Christiansburg fell slightly. However, attached total volume showed a 12.8% increase.More surprising than a year-over-year drop in sales and volume, Christiansburg Q1 2012 sales were also lower than Q4 2011 sales. Single familyhomes were down 15% from Q4 and attached sales were 35.7% lower. Total Average Median Total Total Average Median Total Sales Volume Sale Price Sale Price Sales # Sales Volume Sale Price Sale Price Sales # Q1 2012 6,099,900 179,409 162,000 34 Q1 2012 1,222,350 135,817 125,500 9 Single Family Attached Change -13.1% 2.2% -6.6% -15.0% Change -36.9% -1.8% -9.5% -35.7% Q4 2011 7,022,450 175,561 173,500 40 Q4 2011 1,936,553 138,325 138,750 14 Q1 2012 6,099,900 179,409 162,000 34 Q1 2012 1,222,350 135,817 125,500 9 Change -3.1% 5.4% -5.3% -8.1% Change 12.8% 0.2% -5.3% 12.5% Q1 2011 6,296,986 170,189 171,000 37 Q1 2011 1,083,950 135,494 132,500 8 Total Average Median Total Contracts Written Sales Volume Sale Price Sale Price Sales # Q1 2012 357,000 178,500 178,500 2 Q1 2011 Q1 2012 Change Change 55.2% -22.4% -22.4% 100.0% Condos Single Family 55 46 -16.36% Q4 2011 230,000 230,000 230,000 1 Q1 2012 357,000 178,500 178,500 2 Attached 49 32 -34.69% Change -35.7% -35.7% -35.7% 0.0% Condos 0 3 NA Q1 2011 555,316 277,658 277,658 2NestRealty.com 6 of 9
  7. 7. Christiansburg (In Town Limits) Market Snapshot (Part 2) Christiansburg (In Town Limits) Sales by Type 4% 20% 76% Single Family Attached CondosThe vast majority of home sales in Christiansburg continues to be single family homes. More than 3 out of every 4 sales are single family homes.This percentage is representative of the overall market inventory in Christiansburg. Contracts written in Q1 were off fairly significantly inChristiansburg also. While condo sales were up (from 0 last Q1 to 3 this past quarter), single family (-16.36%) and attached (-34.69%) contractswritten were down from Q1 2011. Christiansburg (In Town Limits) Percent of Sales by Price RangeQ1 ’12 0% 7% 71% 18% 4%Q4 ’11 0% 13% 64% 20% 4%Q3 ’11 0% 12% 59% 22% 7%Q2 ’11 0% 7% 66% 27% 1% 0% 25% 50% 75% 100% 0-100K 100K-200K 200K-300K 300K-500K Over 500kLike Blacksburg, Christiansburg has seen the most growth over the past year in the $100k-$200k price category. Total market share for this pricesegment increased from 66% in Q2 2011 to 71% in Q1 2012. Sub-$100k sales saw a spike in Q3 and Q4 2011, but have settled back to similarlevels in Q1 2012 that they were in Q2 2011. $200k-$300k sales have steadily decreased over the last 12 months. Interestingly enough, $300k-$500k sales have not fallen off much. Over $500,000 sales in Christiansburg are virtually non-existent.NestRealty.com 7 of 9
  8. 8. Montgomery County Total Average Median Total Sales Volume Sale Price Sale Price Sales # Q1 2012 $6,934,950 $203,969 $191,500 34 Overall Change -19.0% -19.0% -11.5% 0.0% Q1 2011 $8,559,597 $251,752 $216,379 34 Change 50.7% -2.5% -11.3% 54.5% Q1 2010 $5,679,317 $258,150 $244,000 22After a 54% increase from 2010 to 2011, Montgomery County sales were flat in Q1 2012. Pending ContractsHowever, most other indicators in this New River Vally sub-market were negative. Total volume(-19%), average sales price (-19%) and median sales price (-11.5%) were all down double digits Q1 2011 Q1 2012 Changefrom Q1 2011. Pending real estate sales contracts were relatively flat with the numberdropping from 21 to 20 this past quarter. Expect sales in Montgomery County to stay flat or 21 20 -4.8%increase very slightly in Q2 2012.Pulaski County Total Average Median Total Sales Volume Sale Price Sale Price Sales # Q1 2012 $6,493,808 $124,880 $111,500 52 Overall Change 56.9% -6.5% -4.6% 67.7% Q1 2011 $4,138,975 $133,515 $116,900 31 Change 17.6% 25.2% 11.9% -6.1% Q1 2010 $3,519,323 $106,646 $104,500 33Pulaski has seen a nice increase in sales and activity as compared to previous Q1s. Q1 2012 Pending Contractstotal sales were up from 31 o 52 (an increase in over 67%). Total sales volume jumped analmost equal amount with a 56.9% increase from Q1 2011. Average sales price(-6.5%) and Q1 2011 Q1 2012 Changemedian sales price (-4.6%) were down in Pulaski. However, we anticipate sales increases tocontinue in the short term as pending contracts in Pulaski were up 61.9%. 21 34 61.9%NestRealty.com 8 of 9
  9. 9. City of Radford Total Average Median Total Sales Volume Sale Price Sale Price Sales # Q1 2012 $1,921,400 $128,093 $110,900 15 Overall Change -22.7% -7.2% -4.4% -16.7% Q1 2011 $2,485,675 $138,093 $116,012 18 Change -2.0% 3.4% -1.7% -5.3% Q1 2010 $2,536,450 $133,497 $118,000 19 Pending ContractsThe City of Radford struggled through a tough Q1 2012. Total sales were down again from 18to 15, which represents a 16.7% drop in sales. This comes off the heels of a slight drop from Q1 2011 Q1 2012 Change2010 to 2011. Total volume (-22.7%), average sales price (-7.2%) and median price (-4.4%) allsaw year-over-year declines in Radford. Along similar lines, pending contracts in Radford fellalso in Q1: from 13 to 9 (-30.8%). All signs are pointing to slower sales in Radford. However, 13 9 -30.8%with prices continuing to drop, buyers may see opportunity and start to purchase in Radford ifthey see value.Giles County Total Average Median Total Sales Volume Sale Price Sale Price Sales # Q1 2012 $2,810,887 $122,212 $107,000 23 Overall Change 11.3% -8.1% -26.2% 21.1% Q1 2011 $2,525,900 $132,942 $145,000 19 Change 18.1% 49.2% 77.9% -20.8% Q1 2010 $2,138,950 $89,122 $81,500 24Giles County sales have held relatively steady over the past three Q1s. However, Q1 2012 saw Pending Contractsa 21.1% increase from 19 to 23 sales. While median price (-26.2%) and average price (-8.1%)did drop, total sales volume increased thanks to the small pop in total sales. Pending contracts Q1 2011 Q1 2012 Changein Giles increased ever-so-slightly from Q1 2011. The jump from 12 to 14 contracts (+16.7%)bodes well for Giles. Expect Giles numbers to hold relatively steady in Q2. 12 14 16.7%*Some statistics in this report come courtesy of the New River Valley Area MLS as of 4/20/12. This report covers the entire New River Valley real estate market.NestRealty.com 9 of 9

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