Friday, December 19, 2008

"Housing Prices Always go UP!" - "Insulated/steady/different"

The RealCentralVA blog has a satirical video posted: "Housing prices always go 'UP'!" The featured "homeowner" can't believe his property has lost value.

Realtor blogger Jim Duncan knows the bubble is over, and crunches the numbers in a way no other blogger or agent seems to be willing or able to.

And there's perspective over there: From the RealCentralVA Twitter feed this morning: "Talked to a buyer yesterday who said all the Charlottesville Realtors he called still said our market is insulated/steady/different."

We hear the same thing from commentors and prospective buyers.

But most of us know this is no longer true. Even those in the housing industry.

We recently learned that a number of Realtors and lenders are themselves having troubles from declining values: they are facing bankruptcy or foreclosure, as described by CAAR President Judy Savage in C-ville Weekly.

As one of our commenters put it, "Public admission of Game Over."

This blog frequently looks at properties with Asking Prices that are 100, 200, even 300% higher than the previous selling price, with the sale typically within the past 1-10 years.

With 18+ months of inventory, one might expect the trend of climbing Asking Prices to change. But no. Some sellers and sellers' agents still do believe this market is "insulated, steady, protected." The asking prices, therefore, reflect
this optimistic belief.

The sellers/sellers' agents also must believe the market will come back. Sadly, it's not coming back in our lifetime.

Cases in point: the following properties came on the market last week, and the percentage increase is even more noticeable, ioho, because these are offered by the same seller. This material comes from public records.

605 Orange Street - $395K
Sale history: 12/2005 - $190K = 107% percent increase in three years

MLS# 460012
Locust Grove neighborhood near 250 Bypass
3 bed, 1 bath, 1065 sq. ft., ca. 1920.
Price/sq. ft.: $375
Assessment: $208K
Listing: "This home needs updating."

1105 Little High Street - $499K
Sale history: 7/2000 - $148.5K = 237% increase in 8 years

MLS #459973
East of Downtown
3 bed, 1 bath, 1800 sq. ft., ca 1925
Price/sq.ft.: $271.
Assessment: $322K
Listing: "Interior needs renovation."

1721 Jefferson Park Ave
- $549K
Sale history: 9/2005 - $240k = 129% increase in three years

MLS #459976
4 beds, 2 baths. 1,382 sqft, ca. 1959.
Price/sqft: $397
Assessment: $242K
Listing: "Currently under renovation."

1101 Little High Street - $595K
Sale history: 8/2000 - $226.5K = 163% increase in 8 years

MLS #457653
East of Downtown
Multi-unit. 2,905 sq. ft., ca. 1925.
Price/sq. ft: $205
Assessment: $359.7K

110 Kent Terrace - $599K
Sale history:
3/2007 - $212K = 182% increase in under two years

MLS #460010
Off JPA, in UVa student housing area.
4 beds, 2 bath. 1,673 sqft, ca. 1950.
Price/sq. ft: $358
Assessment: $250K.

And these properties in the Belmont Bubble, offered by the same seller, came on the market in October:

219 Douglas Avenue - $495K

MLS #457706
Duplex: 4 Bedrooms, 2 Baths. 2227 sq. ft., ca. 1900
Price/sq. ft. - $222
Assessment: $354,000.

128 Goodman Street - $575K

MLS # 457701
Duplex with Cottage
Sq Ft: 2254, ca. 1920.
$255 per sq. ft.
Assessment: $362.9K.


Anonymous said...

"insulated, steady, different"


detached from reality, trickle, delusional

Stephen said...

6 of the 7 properties require jumbo loans.

Rates on 30yr fixed are at a historic low about 5% for properties under $417 grand.

Jumbo rates can be two or more x higher.

stephen said...

x = points, that is.

Anonymous said...

Looks like someone is going to be sitting on lot of property for a very long time. Maybe he was just fishing to see if anyone will bite, and he doesn't really need to sell?

james said...

to go thru trouble of 'hiring' an agent in this economy? just to see if somebody will 'bite'?
wouldn't you have to have a lot of time on your hands? maybe it's like the 'unvitaion' on Seinfeld. you invite someone to your wedding when you know they can't make it. maybe the cpa or attorney is suggesting 'sell' but seller doesn't really want to. but it looks like he's making an effort. an unsale.

michael guthrie said...

I would be interested in who was the person who said that to Jim because I don't know a Realtor out there who doesn't think sellers need to be more realistic in their price.

Anonymous said...

I've talked to three realtors in the past two to three weeks, and every one of them: 1) still claimed this was an "insulated market" and 2) tried very hard to rationalize listings priced well (at least 20%) above recent (2004 to 2006) sales and assessments.

Real C'ville - The Bubble Blog said...


We're *much more* interested in who the *agents* are who are claiming what amounts to no change in this market, local and national evidence to the contrary. IOHO, they're doing everybody a disservice.

With 26 months of inventory--more than twice the current national average of 11 months--do you, as an agent believe this market is different, steady, protected?

Or do you believe such adjectives are misleading for buyers and sellers alike?

Can you, as an agent, justify the numbers that "anonymous" is quoting, either to buyers or sellers?
Listings that are 20% (or more) above 2004-2006 sales or assessments?

Here's an article about today's report from NAR about the drop in November sales and prices: