CHARLOTTESVILLE, Va. (WVIR) - The Charlottesville Area Association of Realtors (CAAR) released its third quarter report today and home prices in the city and surrounding counties are on the rise.

CAAR’s president Anthony McGhee says the reason prices continue to rise is a matter of basic economics: supply and demand.

The number of homes on the market is down 13 percent since this time last year.

McGhee says this lack of supply is what is driving up prices and deterring potential buyers.

The report shows that the number of homes purchased within city limits is down over 25 percent compared to last year's third quarter.

McGhee says the issue of low inventory is frustrating buyers nation-wide.

“They’re out there, they’re looking, they’re not seeing much out there to buy, they’re seeing higher prices so there’s some talk that we may see a stall in the marketplace because of it,” said McGhee. 

That’s because potential buyers are not seeing many homes available for purchase, so they are opting to stay where they are.

Because of this they are not listing their homes on the market and the lack of supply becomes a cyclical issue.