Friday, February 27, 2009

Charlottesville/Albemarle Market: January Sales and February Inventory

RealcentralVA has noticed an increase in buyer activity, and gives some anecdotal and Tweeted references to foot traffic and people looking.

But a commenter named Craigger summarizes the education level and the feelings of many local buyers as he describes this market and puts it in a national context:

Increased buyer activity is good news for realtors! Feb has seen a 50% increase in sales MoM!

Sounds impressive, until you realize Jan sales were 57, and Feb MTD are 79. Which is down about 66% since last year and even more since the totally bubblicious 06-07 period. Not so great is that current inventory is sitting at MORE THAN THREE YEARS. Plus Jumbo’s are 200bps higher than conforming, and Obama is looking to reduce the mortgage interest deduction for mortgages greater than ~500k. It’s hard to think higher priced homes will not go down 25% in general, with an extra 15-20% possible if the mortgage interest deduction gets polaxed. At least the government will reduce the incentive to waste tax payer dollars on subsidizing more house than any reasonable person would need.

"Craigger" could be one of us--that is, realists instead of optimists.

These are the numbers:

January Sales:
Sold in Cville
7 houses
2 condos/townhouses

Sold in Albemarle
17 houses
16 condos/townhouses

Add the rest of the region:
57 total

When compared with January 2008 sales, this is
approximately a +/60% drop in YOY; the drop is even wider from earlier years, as Craigger points out.

Nationwide, sales and inventory are so bad that they garner front page headlines. But they're nowhere near as bad as in this area. Nationwide new home sales were down 48% in January 2009. This is the lowest since 1963, when the CB began keeping track. Median price fell YOY 13.5%, and just over 10% from the previous month. Nationally, there are approximately 13 months of supply.

Nationwide, existing home sales were down 5.3% from December. In the South, they were down over 7%. YOY, they were down over 8%. 45% of sales in January were distressed (foreclosures, short sales), according to the National Association of Realtors. Inventory also declined to 9 months.

These numbers are significantly different than what's going on in this market, as "Craigger" noted, and which as one realtor put it is "essentially frozen."

Current supply in this area is now measured in years. More properties come on the market daily.

Currently for Sale: Charlottesville

182 Houses
132 Condo/Townhouses

Currently for Sale: Albemarle
585 houses
299 condos/townhouses

(All above numbers are most likely

In the entire Central VA region, there are about 3,400 properties for sale.
Median prices rose more than 70% since 2002 (according to CAAR as well as OFHEO and FHFA). But in many cases prices rose much higher, and don't seem to be striking many buyers as having "corrected" enough.

Posting about an uptick in buyer activity seems to be a response to our Sellers Trapped In Their Homes, and RealCentralVA's own "Learning From the Bubble Blog." Both were followed by many comments from what seemed to be interested but reluctant buyers who believe that prices in this area have not corrected themselves considering large market inventory, global economic slowdown, local economy, credit crisis, and that houses, like stocks, are not going to begin appreciating again for quite some time.

Optimism is great. So is being realistic, practical, and looking at the bottom line, as one recent commenter put it.

See: RealCentralVA Buyer Activity. Calculated Risk for New and Existing Sales and graphs. NAR's press release.

Wednesday, February 25, 2009

$8K Tax Credit for 2009 First-Time Homebuyers: Revised

The up to $8K tax credit that passed with President Obama's American Recovery and Reinvestment Act just got better.

Those who purchase a home between January 1 and December 31, 2009, meet income caps ($75K for an individual, $150K for married couple) and haven't owned a home in the past three years, may now claim the tax credit on either their 2008 (filed April 2009) or 2009 (filed April 2010) return.

This means the benefit may be "immediate," instead of more than a year away. This tax credit does not have to be repaid, unlike the 2008 / $7,500 version.

See the Treasury announcement, and the IRS announcement.

The IRS website will also have FAQ's on how you can get the tax credit for 2008 if you don't close on a house until, say, July. Short answer: amend your return after April 15 by filing another form. Long answer: contact your tax professional.

"We Will Rebuild." But It's Not Going to Be This Year.

President Obama's Address to Congress: Transcript

Governor Bobby Jindal (R-La.) GOP Response: Transcript

The missing piece of the puzzle? What exactly will happen to the largest banks in the US, all of which are technically insolvent. Fed Chair Ben Bernanke isn't showing his hand, though he echoes prominent economists: the Recession may lift in 2010, but it's a hard slog through 2011.

Earlier Tuesday, the topic that began it all was in the news: declines in home values. The monthly S&P Case-Shiller Home Price Index was released. The numbers, tracking 20 major metropolitan areas, were dismal: home prices down 18.5% in December '08 from '07. 2008 closed out with record low prices.

Nationally, the prices of existing single family homes are now back at 2003 levels.
More in an upcoming post, but this caught our notice:

“The broad downturn in the residential real estate market continues,” said index chairman David Blitzer. “There are very few, if any, pockets of turnaround that one can see in the data. Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines, and eight of those MSAs now with negative rates exceeding 20 percent.”

Read a short version of the numbers here; see the breakdown of Metro Areas here; and the full report here.

Monday, February 23, 2009

Dow Plummets to 7,114: We're Back to 1997

The Dow dropped another 250 points today on concerns of bank nationalization (deepening recession, mortgage bailout, more Citi handouts, more AIG handouts, etc.). Call what's coming "receivership," "preprivatization," "temporary," "stakeholder," etc., but we're guessing that by a week from now the entire banking landscape is going to be trasformed.

Before the latest cliff diving, the Fed called the gain in "family wealth" a "mirage," according to

[T]he Fed found that the median net worth of American households increased by a seemingly healthy 17 percent between the end of 2004 and the end of 2007.

But the gains were wiped out by the collapse in housing and stock prices last year. Adjusting for those declines, Fed officials estimated that the median family was 3.2 percent poorer as of October 2008 than it was at the end of 2004.

So now how much poorer is the median family? A number of economists and analysts have suggested the housing bubble won't truly be over until prices are back to 1998 levels. Ditto the stock bubble. The market has achieved the number. How long will it take national housing prices to follow?

To see the Four Bad Bears graph in larger format, go to Calculated Risk or To remember 1997 (or learn about it) go to The Big Picture.

There's more bad news coming this week: the Case Shiller Price Index, New and Existing Home Sales, GDP report. The home sales will be bolstered by foreclosure sales in the West and Florida....

Friday, February 20, 2009

Sellers Trapped in Their Homes

More and more sellers are trapped in their homes, unable to move on or up. Read about these sellers in NY, who are unable to sell, stuck and stressed, due to a variety of reasons and decisions.

On the other end of the spectrum are homes that won't sell but are empty. The vacancy rate for houses currently for sale in the Charlottesville / Albemarle area has remained at a consistently high level.

Too much supply, not enough demand. And the supply increases every day.

The Hook: From "On the Block" to the Auction Block

The Hook reports that a home they recently featured in the column "On the Block" now faces foreclosure auction.

The Albemarle County property at 200 George Rogers Road in Key West had an asking price of $499K; the current owners paid $495K in 2005.

At the time The Hook story appeared, the tax assessment was $460,700K.

The 2009 assessment has dropped to $424K.

It's always bad news when the tax man, who wants as much cash as he can get, thinks a property is worth less than what the seller thinks it is. Current buyers, however, don't give much credence to what the tax man thinks, as the figures are based on sales that happened before the current snail's pace took over, property values plummeted nationwide, and all hell broke loose on September 15, leaving the national and global economies in a condition that will take years to normalize.

Wednesday, February 18, 2009

Info About & Reactions to Homeowner Affordability and Stability Plan (Updated)

Here are some links to pertinent answers about the program, and opinions about it:
Update at bottom.

Who qualifies, What to Do, etc.:

Answers to FAQ here.
NYT: Meltdown 101: FAQ here.
NYT: The plan in graphic form here.

What's Wrong With the Plan:

Barry Ritholtz over at The Big Picture:

The Obama plan is a little better than I expected, but it still dances around an issue that is sacrilegious to many economists: Home prices are still way too high for any stabilization and/or housing bottom to form.

...[T]hey are still too high by most valuation metrics. Propping up home prices and the desperate attempt to forestall foreclosures only serve to delay this inevitable process. To effect a stabilization, housing bottom and recovery, overpriced assets need to fall even further.

Go to any suburban neighborhood — the one you or a friend/family member lives in. Look at the starter homes that a newlywed couple just starting out might consider. Small capes, 2/3 bedroom houses or cottages. Assume that this couple are late 20s/early 30s, and are making decent — but not 6 figure — salaries.

Can they afford that starter house? If not, then the entire real estate chain is frozen.

BB: While this remains an issue in many areas, it's particularly true in the Charlottesville MSA.
Read the rest of Ritholtz here.

Mike Shedlock, over at Mish's Global Economic Trend Analysis:

I do not buy this "acted responsibly" nonsense. If a person took out a loan greater than 38% of their income they most assuredly did not act responsibly.

Furthermore, the Obama plan increases the size of Fannie and Freddie, rewards servicers for no reason, giving them an incentive actually to waste taxpayer money, and rewards those who acted irresponsibly. Is this a good thing?

Read more from Mish here.

Calculated Risk parses the plan, but reserves disdain for homedebtors who used excessive leverage. He carefully comments on most parts of the plan here.


But analysts and administration officials alike cautioned that it would not come close to halting the tidal wave of foreclosures. Nor would it provide much help to millions of homeowners who are “under water,” or holding mortgages that are bigger that the market value of their houses.

More Opinions

Economist's View has a summary of other reactions, as well as links here.

WSJ: Dems Praise, GOP Disses Plan here.

WSJ: Homeowner Aid Risky to Banks here.

UPDATE: Thursday Feb. 19 10pm - More Links

(btw, Dow closed at 6 year low...a little lower and it will wipe out any "gains" of the past 12 years. Currently, it's down 46.6% for the year.)

Barry Ritholtz expands on Homes: Still Too Pricey to Stabilize, here.

Time Magazine: Saving the Housing Market by Speeding Up Foreclosures, here.

WaPo: US Doubles $ to Fannie & Freddie: $400 Billion, here.

newgeography: Housing Downturn Moves Into Phase II, here.

Charles Hugh Smith: What's Obvious: This Is Not the Bottom in Housing, here.


Dukes of Moral Hazard: Re-default rates are 55% after six months, here.

Mean Street blog, Plan is Bound to Fail here.

Real Time Economics blog, Economists react, here.

Obama may turn to Hollywood for help, here.

Some ineligible Americans riled up, here.

Our first HASP post here.

Details: Obama Housing Bailout Seeks to Help 9 Million Mortgage Debtors

CNN is reporting on the President's plan for "troubled" mortgage debtors, though Mr. Obama hasn't yet given his speech in Phoenix. Our comments are italicized:

*Helping borrowers who owe more than 80% of their home's value to refinance and reduce their monthly payments - Many borrowers owe more than 80% of their homes value since they put no money down AND the value of their homes has dropped.

*Creating a $75 billion homeowner stability initiative to reduce monthly payments for at-risk borrowers by subsidizing interest rates. The goal would be to bring payments to no more than 31% of a borrower's income - Many mortgages being written right now still allow a much higher Debt-to-Income ratio, which is risky .

*Providing multiple incentives to servicers to modify loans and to proactively help at-risk borrowers while they are still current in their payments - It will be interesting to see how "at risk borrowers current in their payments" will be defined. Those who have Option ARMs that are about to reset? Or, more understandable, unemployment?

*Creating a $10 billion fund to protect investors and servicers against further home price declines - Since investors and servicers are now bleeding money, some incentive is necessary, right?

*Requiring all financial institutions receiving government funds to participate in a standardized loan modification program, while seeking to have all federal agencies that own or guarantee loans also apply the guidelines - The Treasury and Fed seem pretty savvy now since they forced so many banks to take TARP funds last Fall. So this plan will involve "private" banks as well as Fannie, Freddie, etc.

*Allowing judges to modify mortgages during bankruptcy, a measure the financial industry has strongly opposed - Citi recently agreed to drop opposition to this, and where Citi goes, everybody follow.

*Providing more Treasury Department backing of Fannie Mae and Freddie Mac and expanding the number of mortgages the agencies back - F&F already own or back about 57% of US residential mortgages. Aiming for 100%?!

Mr. Obama said: “It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone.” Keep the bubble alive!

The result: We all own bad mortgage debt now! And banks, and car companies, and insurance companies....

See the CNN story here.
White House Fact Sheet here.
Mr. Obama's Remarks here.
NYT article here.

Tuesday, February 17, 2009

Rugby Road: Asking v. Selling Prices

The Rugby Road area, near UVa and one of the nicest and most convenient neighborhoods in Charlottesville, had many properties for sale in the Summer of 2008.

At one point there were a handful within a block of each other. Several were ultimately pulled from the market. These two sold:

1332 Rugby Road
had an Asking of $700K (MLS #451929) last Spring. In August the price dropped to $605K. In October, the house closed for $525K.

$175K less = 75% of Asking.

There's an ongoing debate in Comments on who sets prices: seller or seller's agent. In the case of 1332 Rugby, the seller was an agent.

A few doors down and for sale at the same time: 1325 Rugby Road, with an Asking of $1.6 Million (MLS # 452065). This property closed in December at $1.3M.

$300K less = 82% of Asking.

We looked back at these properties (and others) after RealCentralVA ran a post about Asking v. Selling prices and DOM (days on market).

What does this mean? One thing it means, based on City Records, is that these sellers were able to accept lower offers because these houses hadn't changed hands in many years.

Monday, February 16, 2009

Fannie & Freddie Upping Fees, Credit Score Requirements, Downpayments

Giant Mortgage Lenders Fannie Mae and Freddie Mac, which were taken over by the Government back in September, are responding to their ongoing foreclosure losses by charging new customers more for mortgages.

Fannie Mae and Freddie Mac own or guarantee roughly 57% of all residential mortgages in the United States. They've received billions in bailout money from the Fed even as they continue bleeding money.

The new guidelines take effect April 1, according to WaPo, but:

"Most major lenders already are pricing in these higher fees, effectively raising costs to borrowers immediately and reducing the impact of housing stimulus efforts from Congress and the Obama administration.

Under Fannie's and Freddie's new guidelines, even applicants who assumed that their FICO credit scores would get them favorable rates will be charged more unless they can come up with down payments of 30 percent or more.

For example, a buyer with a 699 FICO score who brings a sizable down payment of about 25 percent to the table will be hit with a 1.5 percent "delivery" fee at closing under the new guidelines.

A buyer with a FICO score between 700 and 720 will pay an extra three-quarters of a point. Even someone with a 739 FICO -- once considered a platinum guarantee of the best rates available -- will get dinged with a quarter-point add-on.

Condominium buyers who cannot come up with a 25 percent down payment will be hit with a three-quarter point add-on penalty, no matter how high their credit score -- simply because they are not purchasing a traditional detached, stand-alone house.

As recently as two years ago, FICO scores in the upper 600s were enough to qualify any applicant for prime financing. Now scores of 720 to 740 are the bare minimum if you're going to escape add-on fees -- and still not good enough if you choose to buy a condo or a duplex.

To avoid these fees and pay as little as 3.5% down, consider an FHA loan. Unfortunately for the Charlottesville MSA, the limit for FHA loans is $437K (and this number takes into account that this is a "high cost" area).

Read all about the Fan/Fred fees and conditions, in this column by WaPo's Kenneth R. Harney.

Thursday, February 12, 2009

$8K Homebuyer Tax Credit: the Final Version in the Stimulus Plan

As agreed upon by the House and the Senate:

"FIRST-TIME HOME BUYER CREDIT First-time home buyers are eligible for a refundable tax credit equal to 10 percent of the purchase price of their home, up to $8,000, if they made the purchase after Jan. 1, 2009, but before Dec. 1, 2009."

"[Y]ou don’t have to pay this one back over 15 years. The new credit, however, does phase out for individuals with incomes over $75,000 or married couples with incomes over $150,000 who file their taxes jointly. Also, you forfeit the credit if you sell the house within three years."

Read about this and other Stimulus Bill tax breaks and benefits in Ron Leiber's Your Money.

Wednesday, February 11, 2009

76% of Homes Lost Value in 2008: Zillow

The real estate website Zillow likes to delve into the psyche of the American homeowner, and has periodically been surprised at what it finds. While there is objective evidence that nationwide homeprices have been declining for the past 10 quarters, or 2.5 years, there's been the "Not my house" syndrome. Zillow recently reported that home values lost $3.3 Trillion in 2008. And now, for the first time, the majority of homeowners believe the news, and the news that 1 in 6 mortgage holders are underwater. In the 2008 Q4 Homeowner's Confidence Survey:

More than half of homeowners acknowledge that their own home’s value has declined over the past year:
  • 57% think their home’s value has decreased
  • 18% think their home’s value has stayed the same
  • 25% think their home’s value has increased
In reality, says Zillow, 76% of homes lost value in 2008.

The "not my house" syndrome is so pervasive that Zillow has a "Home Value Misperception Index." But homeowners see the loss, apparently, as just momentary: "Fully 70 percent predict their home’s value will either increase or stay the same in the first six months of 2009." Economists be damned!

Read the Zillow blog post, with links to their studies and indices, here. It seems like a lot of sellers in the Charlottesville MSA are some of those 43% of homeowners who think their home's value has stayed the same or increased. But with large supply and small demand, perhaps there will be a shift this Spring.

Bank Bailout at $2.5 Trillion: "The Financial Stability Plan"

Treasury Secretary Tim Geithner announced the new bank bailout on Tuesday, February 10. Obama Administration officials have committed to flood the financial system with as much as $2.5 trillion: $350 billion of that coming from the TARP bailout fund and the rest from private investors and the Federal Reserve, making use of its ability to print money.

However, as reported by the NYT, "basic questions about how the various parts of the program would work, especially those involving the unsellable mortgages that banks are holding and preventing home foreclosures, were left for another day."

The Treasury has set up a website that will give details about the plan. The site is so new that as of today, it is actually less sophisticated than anything our host, Blogger, has to offer. But it's under construction. Check it out at

Some banks are now so wary of the program that they want to return money.

Adding Up the Government’s Total Bailout Tab: Through Feb. 10, the government has made commitments of nearly $8.8 trillion and spent $2 trillion. Click here for an overview, organized by the role the government has assumed in each case.

Tuesday, February 10, 2009

$15K Homebuyer's Tax Credit on "Chopping Block": WSJ

"The Senate passed the $838.2 billion plan Tuesday by a 61-37 vote. As lawmakers meet to reconcile the House and Senate versions of the legislation, the White House's effort to reshape it is likely to lead to skirmishes among House and Senate Democrats, as well as with moderate Republicans and Democrats who pushed to cut the size of the original Senate package."

"Other tax-cut proposals are on the chopping block. They include an $11.5 billion proposal to give car buyers a tax deduction covering local sales taxes and interest on auto loans, and
a $35 billion proposal to create a new tax credit for home purchases."

Read entire article here.
Previous posts on this topic here and here.

How to Buy Foreclosures, Pre-Foreclosures, Short Sale, REO, and Auction Properties

Tonight 7PM: information session free and open to the public at the Hilton Garden Inn, Rte. 250 / Pantops in Charlottesville. If you can't make it tonight, there will be two more, Feb. 17 and 24. These sessions are sponsored by Greenwood Lending and Assist2Sell who are, of course, hoping for your business. (But who's not nowadays?)

You can gain a lot of info from 'seminars' like these, and learn about the phases of foreclosure, how to find them, what happens at an auction, what REO is/means, what's a Short Sale, and whether these kinds of properties, which are often 'discounted,' can work for you.

For more info, call 434-996-8788.

As you know from the nat'l and local news, and checking out the DP, The Hook, and this daily listing of public notices, foreclosures are rising in this area at all price points.

Tell 'em the Bubble Blog sent you.

Monday, February 9, 2009

Price Reduced - 935 Monticello Avenue - Asking $149,900

MLS #461713. The Asking Price has dropped $118,000 on this 3 bdrm ca. 1920 Belmont farmhouse w/big yard, at the traffic light near where the Avenue becomes Rte. 20. Last Spring the Asking was $267,900 (possibly higher). And this one is habitable; it's been a rental for the past six years. The listing tells us 'this could be the bargain of the summer'. Wait a second: it said the same thing last year, too. Whatever. 935 Monticello previously sold at the beginning of 2003, when it went for $82,500. Percentage change from then to now: roughly 81%. If the Belmont "uninhabitables" sold, can this one be far behind?

More on the $15,000 Homebuyer's Tax Credit: "Flip Your Brother's House"

Nobel Prize winner and Princeton Economics Professor Paul Krugman Op-Eds in today's NYT, harshing on the current version of the Stimulus Plan, President Obama's approach, and the $15K homebuyer's tax credit:

What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?

A proud centrist.
...[T]he centrists were apparently just fine with one of the worst provisions in the Senate bill, a tax credit for home buyers. Dean Baker of the Center for Economic Policy Research calls this the “flip your house to your brother” provision: it will cost a lot of money while doing nothing to help the economy.

The Senate still hasn't voted upon this bill; this credit may not make it into the final version. Read Mr. Krugman's entire piece here. Our original post explaining the credit, and containing other links, is here.

Sunday, February 8, 2009

The $15,000 Homebuyer Tax Credit - What It Is and What it Is Not

There is a $15,000 Tax Credit in the current version of the stimulus package, on which the Senate is expected to vote on Tuesday, Feb. 10. Senators Johnny Isakson (R-GA) and Joe Lieberman (I-CT) are the sponsors.

What the Tax Credit IS NOT:

--A Rebate. Buyers will not get a check for a lump sum merely because they purchase a house. A "rebate" is what citizens meeting certain income qualifications received last Spring/Summer, in order to go out and spend and help "keep" the economy out of recession.

What the Tax Credit IS:

---Buyers who purchase a house as a principal residence and owe taxes in 2009 or 2010 can apply 10% of the purchase price, or $15,000 (whichever is greater), toward owed personal income tax.

--If a buyer owes, say $3,000 one year and $4,000 the next year, the total credit is $7,000.

--If a buyer owes MORE than $15,000, the burden is his/her own.

--If a buyer DOES NOT owe any income tax, the buyer does not get the credit.

More Details:

This tax credit replaces the current $7,500 program, which is actually a loan repayable over 15 years.The tax credit will be available one year from the date of enactment. It may be used for new or existing home purchases. There is no income cap for the buyer. It is not just for first-time buyers. The buyer must use the house as principal residence for at least two years.

This program will work best for those in higher income brackets. If the family income is closer to the National Median of $58,000 or Charlottesville's Median of $68,000 for a family of four, chances are, few or no taxes will be owed. See the Bloomberg News report on this here. For an example of what the credit could do for a family in a lower income bracket, see this post, and look for of "John and Jane" in the middle.

Is there a "downside" to this Tax Credit?

It will cost +/-$40 Billion.

And as genius Calculated Risk explains:

The tax credit for existing homes does almost nothing to help the economy. Some might argue that this is more work for agents and home inspectors, and might help with furniture sales, but the impact will be minor.
The sponsors and supporters of this tax credit believe this will support house prices - a mistake because this will mostly just shuffle homeowners between homes, and not reduce the excess supply.
The key problem for housing is prices are too high. How does this tax credit help reduce prices? Why are we trying to artificially increase the turnover rate? And why are we targeting a tax credit at higher income individuals?

This tax credit seems ill-conceived, and probably should be removed from the stimulus package. No one has adequately explained how this helps "fix housing first".

Emphasis ours. Read the complete Calculated Risk post, which includes graphs, here.

See Senator Isakson's statement, given on the Senate Floor, here.

Here's a LIST OF CUTS from the stimulus bill, thus far.

Thursday, February 5, 2009

Is Hauser Homes' Stonehaus Development Seeking to Sell Belvedere Stake?

We hear that Stonehaus Development, a subsidiary of Hauser Homes, is seeking to sell property at the unfinished "green" development Belvedere. Hauser built 20 of the proposed 400 single-family homes and the work has significantly slowed since 2007, a nationwide trend, since new home construction and sales are cliff-diving.

Now Stonehaus apparently wants to sell full or partial stake in the multi-family portion of the planned project. That is, the 275 'garden style' apartments. Each is estimated to be worth $150K or $41 Million if/when built.

There's been speculation lately about whether Hauser Homes is in financial trouble, as reported by Brian McNeill of The Daily Progress. Just a month ago, Hauser was reported having "issues" with several developments: Old Trail in Crozet has filed suit, and Weather Hill's Poplar Glen in Western Albemarle faced mass foreclosure, blaming Hauser.

Stonehaus is apparently willing to sell the Belvedere Square parcel outright for $4.6M or $17,000 per unit.
Or become an equity partner with the current property as their stake.

It's almost too easy an observation to say "Green" Belvedere is not proving very green financially. Last Fall, Church Hill Homes principals Josh Goldschmidt and Jamie Spence unloaded their portion of Belvedere on Richmond's Eagle Construction, took jobs with the company, then faced mass foreclosures and liens.

Stonehaus trying to sell for $4.6 Million?
And does this price to take into account the millions and millions in liens on the place?

751 Park Street - Price Reduced - $769.9K to $619K

We first admired 751 Park Street in June '08 when it came on the market at $769,900 (original MLS #457177). The grand place, known as The Keller House, is a classic four over four with a center staircase and large attic: 2928 finished square feet, .49 acre level back yard, ca. 1900. A City of Charlottesville architectural study has called it " extremely important example of the Georgian Revival style so popular at the turn of the Century...."

When this house was relisted in September (different MLS #) the price had dropped $100K. Now it's even lower. IOHO, this terrific property should go--but who knows in a market like this and with the necessity for a Jumbo Mortgage. But...Need furniture? The antique shops downtown are having fire sales, based on ads in the local papers. Need new appliances? Best Buy will haggle. As will other furniture stores. Need some changes? As we all know, there are lots of subs who need the reno work.

Current Asking Price: $619,000. About 20% less than original asking. The house has its own website; Google the address. According to the current agent's listing, the sellers are "motivated." (Ioho, it would be odd not to be motivated in a market that has an inventory more than twice the national average of 10 months, but then again, there are still sellers who believe the market is going to "turn" and are "waiting it out.")

Tuesday, February 3, 2009

Nationwide Homeownership Rates Decline & Those Who Do Own Homes Lost $3.3 Trillion in Value in 2008

Ain't the Bubble Bust grand? Not.

The Fourth Quarter of 2008 finds US homeowner levels back to the same level as the year 2000. Eight years of "gains" wiped out.

And for those who still own (or "own") their home, Bloomberg reports: "The U.S. housing market lost $3.3 trillion in value last year and almost one in six owners with mortgages owed more than their homes were worth...."

“It’s like a runaway train gaining momentum,” Stan Humphries, Zillow’s vice president of data and analytics, said in an interview. “It’s difficult to say when we’ll see a bottom to the housing market.”

On the Zillow blog, details include:

  • More than one-third (34.6 percent) of homes sold in 2008 were sold for a loss, up from 30.2 percent for the twelve months ending Q3 2008.
  • The higher rates of negative equity and increasing economic insecurity are combining to push foreclosure rates higher.
  • 10.9 percent of all transactions in the United States in 2008 were short sales, or homes sales where the lender agreed to a home price less than the amount owed on the mortgage in order to avoid the cost and time of a foreclosure.
Zillow also says, "As usual, one should dive down into the individual metropolitan level reports to get a better idea of what’s happening on a local level." Zillow compiles data from multiple listing services, county assessors and recorders, and information from its users.

Price Drop - 1605 Keith Valley Road - Foreclosure

The Hook has a weekly series "On the Block," which allows an intrepid reporter access to a house that's for sale in this slow market. Just two weeks ago writer Mark Davison visited 1605 Keith Valley Road, and told us what he found: "This house's undeniable uniqueness stems from the recent addition of an entire second level and the startling contrasts it created...." And he goes into vivid detail describing what he found.

At the time of the story, January 22, the Asking Price was $410,550. This week, the Asking has dropped to $375,700.

The agent's listing says "$190,000 BELOW CITY ASSESSMENT." As we pointed out in this recent post, the Tax Assessment is an indicator of "value" to the seller or seller's agent, not to the buyer. (And fwiw, unless the new owner challenges that assessment, they're still going to owe what the City thinks the house is worth.)

What The Hook story doesn't mention is the recent troubling sales history for this ca. 1950 house:

$570,063 11/24/2008 Bank
$290,000 12/29/2004 Buyer #2
$250,000 09/21/2004 Buyer #1

The $570,063K is what the bank paid for the house last November, when the house was "sold" at auction. That is, this is the amount that the "owners" who bought it in 12/2004 somehow wound up owing the bank. 100% more than they paid four years earlier.

From the looks of it, this is either a HELOC (Home Equity Line of Credit) or an Option ARM (the adjustable rate mortgage "product" that can lead to piling-on of principal and a resetting to much higher interest rates) gone wrong....And, as a minor aside, how did the house appreciate $40K in three months? Oh yeah: "bubble."

This is one small example of the local bubble, and repeated millions of times, emblematic of how the US came crashing down into Recession and "credit crisis." But perhaps a new buyer will get a home out of this debacle....

MLS #458160

From The Hook:
ASSESSMENT: $565,700
SIZE: 3,595 fin. sq. ft. / 695 unfin.
LAND: 1.10 acres
CURB APPEAL: 7.5 out of 10

Monday, February 2, 2009

Mortgage Squatters

Congresswoman Marcy Kaptur (D-OH) is telling her constituents not to leave their foreclosed homes. Many who face foreclosure have mortgage servicers who cannot produce the note, and therefore may not have a legal right to foreclose. As of December, 2008, there were 9,000 foreclosures nationwide per day.