Wednesday, April 8, 2009

Charlottesville Albemarle Area Real Estate Sales Down 50%, First Quarter 2009

The other day we looked at the YoY decline in sales of single family homes. Today, we look at combined sales.

The following chart gives sales numbers for single family homes, townhouses, and condos combined for Q1 2002 to 2008.

First Quarter Sales 2009, for the entire area = 278

Q1 Sales Down: -50%.

Lowest of the Century. Lowest in 10+ years.

We arrived at this number by combining CAAR's 'live' website data, using the area total "solds" of January: 55, February: 89, March: 134.

What should
sellers do?
Drop the prices. ASAP, because every day that passes, prices are going to get lower. Get yourself sold before everybody starts the downward cascade. And if you doubt this little piece of wisdom? Educate yourself about the Charlottesville MSA by consulting information offered to local Realtors by the Virginia Housing Development Authority

BTW? The local Realtor's association has been telling sellers to price aggressively since at least 2007. But some Realtors are't listening...they're not helping their clients to aggressively price, since they need to make as much money as possible on fewer transactions. And sellers who overpaid during the bubble years are also least likely to want to cut prices.

What should buyers do? Lowball. Make significantly lowball offers. If you don't, you're spending far too much. And we mean far too much. You're going to find yourself in that proverbial "boat" that millions of home"owners" find themselves in--Underwater--with no Obama Bailout.

Prices are only going to get lower in this area, and if you buy right now at what is in many cases still bubble pricing, you're going to be "under water" the instant you sign. This area has more than proven itself not to be an "insulated" or "protected" market simply because UVa is a large employer. Currently, there are wage and hiring freezes. BTW, since this is a university town and there are a number of buyers and sellers on the four year cycle: if you're looking at a property that changed hands four years ago, that seller already paid a bubble price. Proceed carefully.

The official Charlottesville MSA Market Report for the First Quarter will be written by Dave Phillips, CEO of the Charlottesville Area Association of Realtors. It will be released, as it always is, on the 15th of April. It will be available on the CAAR website (from which the above graph comes). All market reports are available for reading/downloading on the CAAR website; look in the upper right hand corner of your screen for the link.

The First Quarter Market Report will also (no doubt) suggest that it's a great time to buy, and express a hope that the market will turn this summer. It may be a great time to buy with a lowball offer, but the market's not going to "turn" --achieve a lower inventory and price point-- until 2010 or later.

For examples of realistic pricing on local houses, visit the blog Worth More Or Less? Be sure to check out our earlier post this week, the significant decline in sales of single family homes for Q1 2009 YoY.

Related Reading:
Winners and Losers in the Housing Slump - WSJ
Median Home Prices in Cville, Alb
Gen Y Priced Out of the Cville Market
Sellers Trapped in Their Homes
16 Million Homeowners Owe More Than House is Worth


ray caddell said...

From Ray Caddell, Broker

Wow! This comment directly below from your most recent post is clearly a function of the general tone of your site, and not of any verifiable, statistical reasoning:

"But some Realtors are't listening...they're not helping their clients to aggressively price, since they need to make as much money as possible on fewer transactions."

There are a lot of reasons houses are marketed at too high a price, and you've covered most of them in past articles. Too assume that a unreasonable price is put on a house at the direction of a realtor so they can gain a larger commission is ridiculous.

Most importantly, the property most likely won't sell at the wrong price, and even if it did, appraisers (especially currently) are looking at values very closely.

A home listed and sold for $25k too much, for instance, would most likely net the listing agent between $375 and $500 additional commission (before taxes and expenses by the way), depending on company policies and commission arrangements.

Nobody in their right mind would risk losing a sale over that kind of money.

If you can provide one verifiable example of an agent who purposely mispriced a house to generate a higher commission, please bring it to me, our Board of Directors (of which I am one), or DPOR in Richmond.

In general, I enjoy reading your work, although "the sky is falling" mentality over and over gets a little negative.

I have lots of happy clients this year, and yes more buyers than sellers, so the Greater C'ville RE Market ain't dead yet.

Nalle said...


Do you have more evidence that the greater C'ville RE Market ain't dead (or rather limping)? I'm confused how your statement "I have lots of happy clients this year, and yes more buyers then sellers" makes it so. To me, more buyers then sellers means that folks aren't willing to sell their houses or that buyers are starting to salivate over the idea of falling house prices. . if you mean that there are actually more people buying houses (closing) then people selling, you will have to explain how that is possible.

Buyer said...

Ray, Good for you in defending your peeps. This blog is obviously from buyers point of view and you should let your agents in on it if they're not already reading it. Anybody who has tried to buy a house in this town knows it's realtors who are trying to keep the prices inflated. That's what "comps" are for. And sellers sure do appreciate it! Cuz every now and then one of those hundreds of houses or thousands of condos/townhouses gets sold. I've never heard this blog say the sky is falling except on the heads of realtors who have to find work in another field. (actuallly i think It was a realtor who said that) As a buyer the sky is wide open for me. I have plenty of time on my hands and sellers don't. I can wait until next year or even the year after. Most sellers can't. Some realtors can't either because they'll have to be switching careers before that.

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

Ray, thanks for the Realtor's point of view.

You might have additional insight on this matter. Since you're a broker as well as a private seller, we're wondering if you have any comment on the market and/or pricing strategies for some of your own unsold properties:

MLS 460203 Asking $189K
Bought 11/04 $45K
302 11th St

MLS 460205 Asking $189K
Bought 6/03 $55K
307 NW 10 1/2 Street

MLS 460197 Asking: $209K
Bought: 12/04 $110K
585 Southampton Ct Albemarle

MLS 460213 Asking $149K
Bought 9/2002: $83.5K
1404 Vine Street

MLS 460219 Asking $199K
Bought 10/05 $147K
511 71/2 St

MLS 460199 Asking $179K
Bought 12/04 $130
402 Fairway

MLS 460214 Asking $179K
Bought 10/05 $145
201 Holly St

Nalle poses an interesting question: if you have more buyers than sellers, and if buyer activity is up, why were there so few closings in Q1, even considering that it's the slowest point of the year?

"Buyer" points out that pricing strategies are sustained by "comps"--comparable sold properties--shown to buyers and sellers. Can you refute this? Are agents showing their clients only comps from the past quarter? How would this be possible if sales are so low? (And have been declining for a couple of years now).

What are the alternative pricing strategies besides "comps" (which are meaningless IOHO if they're before Q4 08), then, given low sales, the state of the national economy, and the state of the local economy, which is having its own contraction, and whose largest employer has a wage and hiring freeze?

What kind of alternative pricing strategy kicks in when the inventory is far larger than the national average of 9 months? When the Virginia Housing Development Authority says foreclosures in this area will continue to rise? When the "correction" in this state trails NoVa by 12+ months? When purchasing a home is out of reach of a portion of the population?

We don't remember saying the sky was falling. What we say is that PRICES are falling. There's nowhere for prices to go but down...unless the market freezes entirely.

Feel free to use the comments section to answer any of these questions. We guarantee you have an interested audience.

Anonymous said...

I'm a first-time buyer, and I don't think the prices at Scott Pershing's blog ("Worth More or Less") are realistic. You should read the comments at his blog, and judge for yourself whether his estimates there (though in line with this blog) are correct.

interested party said...

It is clear from this blog and others that most folks are in agreement that a pricing adjustment will be necessary in order for the market to "normalize". The debate is regarding the size of this adjustment and when it will happen. I think there are too many unknown variables to confidently predict where the bottom will be (I for one believe the contraction will be on the larger side), but we should begin to see the downward spiral by August or September of this year. If we are still having this debate this time next year I would be very suprised and even more annoyed!

NY said...

The assertion that this is a "buyer's market" has been going on by agents and representatives of CAAR in the local media since at least Fall 07 from what I can remember. Seems like an agent's version of buyer's market is that there are too many properties available, while the buyer's version is that prices should revert to something closer to historic norms even if that movement is small.

I wonder why if sales in this area are as low as they were in 2000 and every month there are reports of national home price drops, I wonder why then sellers still don't apply this information to themselves? At a certain point you do have to wonder if some agents are speaking out of both sides of their mouths telling sellers their individual property is different and should remain at bubble appreciation while nevertheless agreeing that those days are over.

ray caddell said...

So you (Bubble Blogger) either missed my point/question completely or chose to ignore it for some reason:

"If you can provide one verifiable example of an agent who purposely mispriced a house to generate a higher commission, please bring it to me, our Board of Directors (of which I am one), or DPOR in Richmond."

or perhaps cannot support your statement? For a source/blog that purports to be data driven, it seems you should be easily able to demonstrate the validity of your own comments.

With regard to pricing of individual properties in which I have ownership interest, those are prices at which I am willing to sell the individual properties. Like any seller, I set the prices, and they either generate a sale or do not. What I paid for them is completely irrelevant, unless you're going to dig deeper and look at circumstances of the individual sellers at the time of the original sale, renovations I may have completed, rents, and a host of other factors.

Additionally, most of my portfolio, (of which the examples you give are only a portion),is multi family housing, which STATISTICALLY has seen prices fall far less, if at all.

I have no problem with analysis of our market, but I have a huge issue with folks that somehow believe realtors ultimately control pricing. I always tell my agents there are only 2 rules in real estate, and if they rememeber them things will generally go pretty smoothly:

1. They're not our houses.
2. It's not our money

Buyers and Sellers set the market...period.

Tim said...

Wow. Such anger. If your sales and agency are going well and you think the market isn't dead, seriously, WTF do you care what the bubble blog says?

But I'm curious about this statement:

"What I paid for them is completely irrelevant, unless you're going to dig deeper and look at circumstances of the individual sellers at the time of the original sale, renovations I may have completed, rents, and a host of other factors."

I find it difficult to believe that somebody's original outlay and expected profit on a property, especially in regard to a portfolio, doesn't impact the way they price properties.

Prices compound over time. See this example:

ray caddell said...

Well, that's the trouble with electronic communication isn't tone of voice. I'm not angry at all...I just want the BB writer(s) to be held to the same standards they try to use every day...verifiable statistics. It's a huge stretch to be able to show that realtors have any sort of ultimate control over the price a seller chooses to put on his property.

Many experienced agents in fact walk away from listing opportunities where the seller insists on an unrealistic price.

As far as pricing a property for sale based on what the seller originally paid for the property, I don't see that as valid as all. They may have paid too much, gotten a fabulous deal, or even been gifted or willed the property. They may have refinanced, taken cash out, made improvements, used equity for other projects, etc. Most investors look at their portfolios in the whole, rather than a property at a time.

As far as my personal/company business, I will tell you that 2008was the worst year in my 27 year career, but 1Q 2009 has been exceptional in terms of numbers of transactions. Rememember, many of the contracts written in 1Q 2009 have not yet settled, and just like analysts talk about "shadow inventory", there are many "shadow sales" (private,bank direct sales, hud foreclosures not through the mls,fsbo, etc.) It would take more time than I have, but it would be interesting for someone to track property transfers from each city/county and match them up to those reported in the CAAR mls.

It seems that might be an important number to know as well,

Again, I'm not at all angry but I do see inherent unfairness in blaming realtors for whatever we're all going through now.

By the way, it's also interesting that very few of the writers on this blog (including the BB folks themselves) identify themselves.
If it's not clear who I am, what I do, and how to reach me directly:

Ray Caddell
C21 Ray Caddell and Associates
975 2121

Anonymous said...

"As far as pricing a property for sale based on what the seller originally paid for the property, I don't see that as valid as all."

Are you kidding me?

Anonymous said...

Yet another outstanding post by the BB!! The VHDA information is irrefutable and local realtors ignore it at their peril. I found the graphs on pages 13 and 14 compelling. Arlington and Alexandria, like Charlottesville, are genl'y regarded as premium locations and this is reflected in their historic pricing. Clearly, prices here have to fall 30% to 35% to resemble anything near normal. And until they do, this market will remain frozen/locked, except for the occasional fool who is desperate to buy or simply doesn't know any better.

As for Ray, are you acting as a fiduciary to your buyer-clients? If so, are you providing them with the VHDA info, and for that matter, are you referring them to the BB? I'm glad that your 1Q buyers are all happy campers, but would they still be happy if you sent them the latest VHDA report? I predict they won't be pleased one year from now when prices have adjusted to historic norms.

Scott Pershing said...


Actually the Bubble Blog does a much better job of providing statistical information on Cville than any other site and especially better job than any realtor. Most realtors are keen to recount anecdotal claims of great selling properties in 2009, but they are so great they can't even disclose them.

I would agree with you that not all the unrealistic prices stem from a realtor alone, sometimes sellers need the extra cash for all the debt they have taken on and will ask realtors to fish an unrealistic price and since realtors make a living having properties to sell they will always take them on. I don't know any realtors that walk away from a listing based upon price alone.

But lets focus on properties where the realtor is complicit in setting ridiculous prices. You are a prime example of that, lets focus on one of your properties:

302 11th St that you purchased for $45K back in 2004 and now you want $189K???

The house must be as bad on the inside as it looks on the outside because there are no internal pictures of it, or do you just not know how to use a camera?

Help us understand how do you justify a 420% markup on a run down property?

Ken T. said...

The "populist rage" about the economy and it's ill effects landed right here.

Love this blog!

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


If you read this blog on a regular basis, you know that our anonymity was covered...about a year ago. It's an internet phenomenon that local and national bubble blogs (among other blogs) are anonymous. That Scott uses his name is actually unusual. In fact, one of the most famous and quoted-in-MSM (mainstream media) housing bubble bloggers, Tanta on Calculated Risk, remained anonymous until she died just a few months ago (not that we are in any way comparing ourselves to CR or Tanta).

In terms of naming a Realtor who has inflated prices? As a regular reader, you'll also notice that we never name Realtors until they've been covered by the MSM. So when we mention, for instance, Doug McGowan and Josh Goldschmidt, two agents who have faced millions of dollars in mass foreclosures, that info is widely available in the DP, C'ville, The Hook, and via public records. We focus on properties.

So if you're going to assert that you know of no Realtor, not one, who has ever inflated a price or thought about his/her commission when setting the asking on a house--we'll take your word on that as a professional. We stand corrected.

As for not answering questions? Maybe you missed some of our questions above, in the paragraph starting "What are your alternative strategies besides comps?"

In terms of closed sales? Yes, we realize that there are significantly higher pending contracts vs. closed contracts; these will be reported in Q2 as "sold." This post focussed on closed sales. We recognize and point out in print that sales everywhere spike higher with each passing month now, as we're in "the season." Pending and/or contingent sales will be reported in the CAAR report. Congrats on what you term an exceptional quarter.

michael guthrie said...

Once CAAR releases the 1st Quarter report, folks will see that the first three months of '09 was indeed worse than the 1st three months of '08. However, the 1st quarter of '09 was better than the last three months of '08. We will have to wait and see what the 2nd quarter shows but I can tell you that the numbers of people looking, the number of pre-Qualifications by lenders, and the number of appointments Realtors have with buyers is higher than it has been in some time. Historically, these things result in more homes being sold. I have been saying for some time now (and have posted on this blog) that we are in a very price sensitive market. Sellers who have figured that out are getting their homes sold. A fact that this is happening is the median price dropped 10% from this time last year. Not as much as writers on this blog would like but a drop nonetheless. Contrary to what continually has been written here, I know of many (yes, many) agents in my company and in other companies that have walked away from listings because the seller wanted to list it at a price that in the agent's opinion would cause it not to sell. I can understand why buyers want to wait to get the best price. In many cases, that might be the most prudent thing to do. However, those buyers need to look at whether they qualify for the $8,000 tax break (which right now sunsets on 11/30/2009) and they need to look at what they can buy with a 4.5% interest rate vs what most folks project could be a rate considerably higher a year from now. Everyone needs to make their own individual decision given their own particular circumstances.

Anonymous said...

Here is an interesting article and discussion of when, if ever, prices will recover.

michael guthrie said...

It is indeed an interesting article but I am intrigued by the quote, "we have only had 1 period of declining home values in the last 100 years" I have been in the real estate business since 1983and this is the 3rd down market (when I 1st got in, the late 1980's and early 90's, and the current market)that I have personally experienced.

Lichen said...

From the article:

"Will the generation that watched housing boom and bust conclude that housing has become cheap enough to finally start bidding it up again? Or will they be so scarred by the damage inflicted on our economy and individual lives that they'll rent, buy cheap and avoid as much debt as possible?"

This is Gen Y. As a Gen Y, I can't think of one person I know out of a huge circle of friends who intends to purchase in Cville in the near future. Even the TFB thinks his parents are clueless b/c they want to fund his downpayment and he keeps avoiding the convo.

Tim said...

Mortgage rates are low right now, lowest in decades. But as soon as they rise, whether it's next January or next June, they will push house prices down even further. Especially in this area where the prices remain too high v. the amount of people who will buy.

The Fed is keeping interest rates artificially low in the hopes that households that refi will go out and spend the money they save and help the economy. See Dean Baker CEPR on this.

It's true that the $8K tax credit is a good opportunity but there are many houses in this area priced for a buyer whose incomes exceed the salary caps ($150K) and won't qualify for tax credit. Simultaneously while trying to get a Jumbo, they won't have the 20% to put down. The upper end of this market $550K and above remains in limbo.

The Fed is also hoping that the low mortgage rates will help the market find the bottom. As the Va Housing Dev Authority material indicates this market is a year or more away from its bottom.

Were I a FTHB I'd take my chances on higher interest rates in the future and lower house prices.

Interesting said...

Ray Caddell bought that rundown house that Scott mentions, 302 11th Street, from Josh Goldschmidt and Jamie Spence, the Belvedere guys who let property all over town go to foreclosure and who owe hundreds of thousands to subs.

Not the only deal.

Anonymous said...

I too have to question the logic of the local realtors that now is a good time to buy a depreciating asset because interest rates on the loan that is required to make that purchase are low? Good luck with that.

And where did Ray go? He seemed adept at dodging questions.

michael guthrie said...

In 1988 I bought a house in Reston for $333,000. Almost before I moved in I couldn't have sold it for $275,000. We weren't going anywhere so although I wasn't happy, I knew that the market would one day come back. In 2001, I sold that house for $525,000. I write this only to say that Yes, homes are depreciating now but as evidenced by own experience, this market will one day turn and the house one buys to live in and enjoy will one day probably show a good return on the investment

Mark Davison said...

The last several weeks of inane comments by armchair economists claiming to know the intrinsic value of every house has really turned me off to this blog.

Do you think it's an original thought to say "houses are overpriced?" You're late to the party, kids, you're about as cool the hair metal bands like Guns n Roses were once grunge struck. I knew in 2006 that house prices were inflated. It doesn't mean that some places today aren't selling, or that things haven't picked up this quarter. A realtor, or anybody, will mention sales picking up, and you people will put our hands over your ears and yell "nah-nah nah nah-nah" because it's not what you want to hear.

What opened my eyes was the obnoxious, unwarranted dogpile on Jim Duncan (of all people, the pioneer of local real estate blogging) a few weeks back (here:

You are the same type of people who five years ago were shouting down the voices of reason who questioned the logic/feasibility of perpetual 20% annual appreciation. You've just jumped on the other train now, like current-surfing lemmings.

I am not questioning the macro data- it is what it is. But I reject the doom and gloom and broad sweeping statements by people who think they're smart just because they know a few Excel formulas.

I don't know Ray Caddell and I've never done business with him, but several single sentences of his posts make more sense than most of the other drive-by comments above. My favorite? His asking price is the price at which he's willing to sell the property. Think it's too high? Don't buy it.

In the Belmont Hood said...

Michael, From everything you've read as an industry professionaly you know that houses are not ever going to appreciate the way they did in the past. Unless you're only reading NAR material.

We're in a Recession that is approaching a Depression. That's not my opinion as an armchair economist, Mark Davison, it's the opinion of Nobel prize winning econoomist Paul Krugman, Nouriel Roubini, et al.

I don't see the nah nah nah that Mark Davison does in these comments or others. I see potential buyers who are annoyed that the RE machine is still going at spin and price inflation. Even in the face of a bad economy which will remain bad for many quarters. And in the face of massive inventory with a recent expected Spring uptick in sales on the lower end of the price range.

I see pertinent questions links data in the comments. Assuming you're the same Mark Davison who writes the Hook column I can see how you'd be annoyed that people discuss real estate frankly. But it's not just grousing IMO.

I also see a Realtor, Caddell, who skipped the hard questions about pricing. Maybe he thinks pricing is "intellectual property" the way J. Kauffman does, the Nest Realty salesman who stated this on Jim Duncans blog. Caddell defended the honor of his profession. Then stated he had a good quarter. Great. Why not give buyers insight? Missed opportunity.

In my own neighborhood I see houses that have been for sale for more than a year. With tiny price drops. Finally that joke in the 900 block of Belmont Ave had a $200K price drop from $375 to $190K. Sold quickly. Lesson for the neighborhood. Apply elsewhere.

michael guthrie said...

In the Belmont Hood,
Where in any of my posts did I say that homes "were going to appreciate as they have in the past". Only time will tell that...
What I did post is my own personal experience not only as a Realtor for 26 years that I have seen two other downturns which corrected themselves and as a home seller where I bought what one post described as a "depreciating asset", watched it drop 20% within a year of purchase and then sold it 13 years later for a significant profit. The 900 block sale on Belmont Avenue also substantiates what I have been saying. We are in a price sensitive market and when a seller prices their home realistically, there are buyers out there to purchase it. Obviously, the original list pirce of $375K was too high and therefore had to be reduced.

Scott Pershing said...


Sad to see that your feelings are still hurt from the upfront conversation at boo hoo...

Jim was just trying to rah rah the market, and guess what us buyers out there aren't buying it. You rail about lack of numbers, but whenever somebody puts it to numbers you close your eyes and say "I don't care just don't buy."

For all of your support for Ray Cadell, he still hasn't answered how he can justify flipping a property that looks like a dump for 420% over what he bought it for.

When did it become wrong to ask people pointed questions? If a realtor puts something out there publicly, i.e. the property listing, they should be able to defend it. Even against us pesky buyers that prefer answers versus feelings.

Jim Duncan said...

Scott -

I've done a lot of things, but I've never (nor have I ever been accused od) attempted to "rah rah the market." Pointing out that things are in fact selling is called factual observation, not "rah rah" reporting.

I would think that anybody who could sell a property for 420% over what they paid for it would do so in a heartbeat.

Belmont Hood -

You're absolutely right regarding the property on Belmont Ave - that's an indication of a seller recognizing the market realities.

And I'll put this out there again - please contact me on or offline regarding any Realtors whom you believe are artificially trying to keep prices high. I'd love to know who they are.

Scott Pershing said...


On Feb. 26, 2009 you said on Twitter:

"Anecdotally, buyer activity in the Charlottesville market is picking up. Possibly way up."

Contrast that to the fact that Q1 Sales are down by 50%, how is that not a rah rah rah?

I am puzzled by your last line of your post here where you ask which Realtors are artificially trying to keep prices high, and yet you see no problem with Caddell trying to sell a dump for 420% over what they paid for it???

Come on Jim, I understand there is loyalty amongst Realtors... but we all know you are better than that. I actually consider you one of the good guys.

Philip said...

I am interested in the personal biases that seep into these comments. There is the rah-rah element when in fact the market obviously is moribund by any statistical measure except maybe at the low end.

On the other hand, the notion that a property owner has to justify his asking price also is strange, particularly when that owner is a sophisticated real estate investor. He can ask whatever he wants, can't he? If you don't like the price, don't buy the house.

A related fallacy is the idea that what the owner paid years ago should affect what he wants to get now. Again, it's his choice, based on his circumstances, even if he apparently is in denial about the real values today.

My own bias? Last spring, I sold my house and now rent in an area that is more expensive than Charlottesville and still overpriced like Charlottesville. We hope to relocate to Charlottesville, but it will have to be the right house at a good price because I doubt the market has bottomed yet.

Scott Pershing said...


You said:

"On the other hand, the notion that a property owner has to justify his asking price also is strange, particularly when that owner is a sophisticated real estate investor. He can ask whatever he wants, can't he? If you don't like the price, don't buy the house."

LMAO... So what you are saying is that if somebody is a sophisticated real estate investor they can't explain their pricing strategy??? Do you work at a bank, the Treasury Department, or the Fed? :-)

The only way to change this type of egregious behavior is to publicly call it out and see if there is a rationale explanation. If there isn't other buyers that may have been duped or too timid to ask can learn to challenge the prices.

If Sellers don't get that type of feedback they just think things are fine with their pricing and the market stays stale. Most sellers are not actively involved in the pricing strategy other than I need X and what can the realtor get for me.

You also said:

"A related fallacy is the idea that what the owner paid years ago should affect what he wants to get now"

Extending that line of thought, then you wouldn't mind if all the gas stations in the town you lived in started charging $100/gal for gas. What difference does it make what they paid for it right?

Because that is what has been happening in the Cville area in regards to real estate as the Bubble Blog has pointed out. Groups of realtors have helped to prop up the values of real estate in hopes that people buy into the dream that Cville is recession proof.

Dave Phillips, CAAR said...

Thanks everyone for a fantastic read and debate. Sorry I was late to the party, but I was working on the Q1 report. Everyone's correct in their own bias way and I'll spare you my biased opinion in this comment.

We will be releasing the Q1 market report on Monday morning on The report is bias because it is based on the numbers in the MLS, which is reflective of, but not complete, of the local housing market.

Sales are "only" down 33.8%, but it is not Bubs fault he/she overestimated the decline. The live stats on the front page of have one technical error that we have not yet fixed (apologies for that). The "live" stats stop calculating when the new month begins. That means that any sales reported for March after March 31st do not show up on the front age. Those stats are there for a snapshot of the market and not for analytical purposes. Hopefully we can get this fixed - sorry to burst your bubble :-)

Philip said...

Hi Scott,
You say: "So what you are saying is that if somebody is a sophisticated real estate investor they can't explain their pricing strategy???"

My reply: The property owner doesn't have to explain. If you don't like the price, there are many other properties to choose from. You are certainly entitled to question their rationale publicly and I'm glad you do--you're providing a useful public service that has already helped me and that I appreciate. But if the owner is in denial, that's his or her choice.

You also say: "Extending that line of thought, then you wouldn't mind if all the gas stations in the town you lived in started charging $100/gal for gas. What difference does it make what they paid for it right?"

No I would not extend that line of thought. I'm only talking about individually owned real estate. But even if I did extend that line of thought, demand for local gasoline would dry up immediately and people would go the next town or city or county to buy gas, and then the price in my own town would fall.

The bigger point here seems to be, as you say "what has been happening in the Cville area in regards to real estate as the Bubble Blog has pointed out. Groups of realtors have helped to prop up the values of real estate in hopes that people buy into the dream that Cville is recession proof."

I agree completely. Charlottesville is (was) a great place to live and got discovered and the prices ran up when there was too much money (actually debt) floating around. Unfortunately, this has happened in many nice areas, including where I live now.

Again, this is why your blog is valuable. Thanks.

Potential Caddell Client said...


Most people don't like being taken advantage of.

If Caddell's houses are in fact grossly overpriced, anyone who would pay anything near the asking price would do so, therefore, due to stupidity and/or ignorance of the market, and would in essence "lose money on the deal".
Therefore, by listing at these prices Caddell apparently either feels that the house is fairly priced, or is hoping that eventually some sucker will come along and "take a hit" at their expense and to his advantage by overpaying for these homes.

Since many reading and commenting on this blog seem to believe that these homes are in fact overpriced, and that Caddell probably is aware of this fact, it would behoove him to protect his reputation as a respected figure in the real estate community, and someone in whom potential buyers must place their trust, and defend his pricing.

Is he in fact tring to take advantage of an uneducated, overly trusting buyer, or does he have a good reason for believing that the houses are priced fairly and appropriately?

While he is indeed "allowed" to price his houses however he wants, and yes, no one is forcing anyone to buy them, shouldn't he explain the price to avoid the appearance of a sleazy car salesman waiting for a sucker to buy a lemon?

I have never met Mr Caddell and do not know anything about him beyond what he himself has posted in the this comment section, so I would like to believe that he is an honorable man and is pricing his houses fairly.

If you, Mr Caddell or anyone else disagrees with the above premise, I would like to hear why.

Thank you.

Ray Caddell said...


Of the 10 least expensive multi family properties in C'ville on the market today, 7 of them are mine.

There's the "pricing strategy defense" you've asked for.


In the Belmont Hood said...

Scott said about a seller justifying a price:
"The only way to change this type of egregious behavior is to publicly call it out and see if there is a rationale explanation.If there isn't other buyers that may have been duped or too timid to ask can learn to challenge the prices."
I know a couple who were interested in the property in the 900 block of Belmont. But they never pursued it b/c of the asking price. And the major hype built up around Belmont.
That place could have sold months earlier for less than the original $375 but more than the final asking of $190K. These firsttime buyers weren't the kind to challenge the asking. Too bad.

Based on the the various ideas and strategies presented in these comments (and after other posts and on the other blogs) I'm changing my strategy this spring. If I make an offer on a house I'm not going to look up what seller paid. Plus I'm going to completely ignore what seller is asking. If seller doesn't accept my offer I'll just move on. B/c whatever % sales are down they're still down.

I remember somebody wrote on one of the blogs recently that in this market a seller either has to sell or HAS TO SELL. I don't have to buy. I'd like to but I don't have to.

Scott Pershing said...


You said:


Of the 10 least expensive multi family properties in C'ville on the market today, 7 of them are mine.

There's the "pricing strategy defense" you've asked for."

Ray, take a bow. You are the quintessential example of circular logic "I have spoken therefore it is true" mentality that has been abused by realtors in this market.

Your lack of specific examples shows that you have no basis for your price, other than that you are hoping a buyer will be a sucker and will believe your "FACTS".

Good luck, but I am betting the average buyer these days is a bit smarter than that!

If you ever decide on a career change, I hear that GM needs help unloading a bunch of Hummers.

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

To work from most recent comment backwards, from the last time we weighed in:

Scott's hummer/GM comment might be more jocular if we could hear tone. Might. :0)

ITBH, you're probably not alone. In some parts of town, it's the wild wild west apparently.

Phillip, if you'd like to give a hint (or actually tell) where you're from, either city or state, people would be interested, since you are a welcome frequent commenter on the local RE blogs. And are you retiring or coming here for employment? An 'outsider's' POV is interesting in these interesting times.

PCC, you raise a good point. What is "pricing fairly" these days?

Dave, glad you're back.

Michael, we always appreciate your calm in the midst of virulent comments. "Price sensitive" is a good way to describe the market.

Jim, even if you were "rah rahing" the market (can anybody say that with a straight face?) who could blame you? But to speak for Scott, what he seems to object to (and what others SEEMED to object to) when the comment first came along about 'buyer activity is up' is that it was a psychological tack, meant to instill comfort in other, possibly less savvy, buyers....AGAIN, we're NOT speaking for Scott, and this is a THEORY of why folks got het up about it, NOT FACT...And we mention this almost dead horse b/c at the end of the CAAR report there's a line about buyer confidence as a key to recovery in the housing market and the economy...IOHO, comfort w/pricing is a significant key to the market's recovery; for some buyers, pricing still has a way to go before they can be confident that a potentially depreciating asset which nevertheless has other, intangible benefits is worth the $($$$).

Mark, as you said about Ray's property, "Don't buy it." If the RE blogs are raising your blood pressure, Don't Read Them. Any of them. But from where we sit, the comments are actually the best part of the blogs.

Tim: good point about higher interest rates, lower prices. Have read analyses of this at CalculatedRISK and The Big Picture; sorry, no link.

Anonymous, thanks for that business insider link. The WSJ book and excerpt quoted in "Related Reading", "Winners and Losers In the Housing Slump", posits the same idea...that house values may never recover.

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

BTW, the definitive CAAR numbers for the region in total, and for each City/County individually:

Plus some questions from potential buyer(s) and data input from Greg Slater in the comments.

Scott Pershing said...

Real C'ville -

You nailed it! I have little tolerance for people that make statements without trying to back it up with anything logical... just saying "trust me" doesn't count for much with me.

From what I am seeing on the blogs, I am not alone.

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

To carefully clarify and to be fair to Jim, that's NOT how he meant the comment. He was looking around at foot traffic and getting anecdotal reports. But that his comment might have SEEMED rahrahing was what caused the strong responses....

michael guthrie said...

Real Cville--thanks for your comment about my calm way of approacing things. The executive team @ CAAR want very much to do our part in educating folks about the market vs. "blowing smoke at people or having a pie in the sky attitude". There are real opportunities out there but the market still is in transition so buyers and sellers have to be very careful about when to move forward.
Downtownenvy--your dilemma is the classic example of real estate is about location. The closer you are to the right type of amenities, the higher the price will be. Part of this is about land value because the higher the land cost, the more expensive the house price. The other part is classic supply and demand. the more people that want to live downtown, the more competition and therefore again, higher prices. In Northern Virginia, they call this the "inside the beltway phenomenum". The same can be said about someone who wants a reasonably priced home in the county with an easy commute but with mountain views. Because that is something many of us would want, the price will be driven higher. You may just continue to rent until you save enough money to allow you to purchase the house in the area you want. Or you can compromise a bit by buying an interim house in your price range. That way you can take advantage of the tax credit and low interest rates. You can then live in it for a few years, get the tax deduction benefit, and then move up to the home you really wanted in the 1st place. As I always say, it is an individual decision and the very worn out slogan "now is the time to buy" is not for everyone.

Philip said...

In reply to request for some info about self, I live in Westchester Co. outside NYC. Nice place to live but very expensive. We sold our house a year ago and now rent. I am self-employed as an investment manager and writer. I can work anywhere there is a good interent connection. We hope to relocate to Charlottesville by fall. The Westchester and Charlottesville real estate markets have many similar characteristics, including high inventory, sellers in denial and lower-priced homes selling better.

Pavel Dovgalyuk said...

Would you believe me if I told you the following: I am working with well-qualified buyers; we've searched all over Charlottesville and there is nothing on the market in their price range that they want to buy? (until this morning, may be). You know why? Because everything in their price range that I wanted to show them when they contacted me 2 weeks ago has gone under contract by the time they got to C-ville to look. TRUE STORY. We made one offer on one property and got out bid by 2 other offers. What? Yes, in April of 2009. Even a cute FSBO I showed them according to the seller "oh, we got an offer last night, but please still look at our house.... we're not sure we'll accept the offer". I'm telling you: a cute city house; nicely updated with a newer roof and HVAC system, easy showing instructions and in a convenient/nice location under $240K in the city will sell in less than 2 weeks. There is your bottom. There are buyers out there who want to own and not rent and ultimately it's their decision.

Prove me wrong: show me a property that meets the criteria mentioned above that is still on the market!

Pavel said...


Here is a house for you :)

I'm "watching" a house in Glenmore that is going through the "distress" process and should be a good value if it's ever back on the market. Who knows how long the process will take.

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

WOW. Pavel has called the bottom. Anybody else with him?!

Pavel said...

Please be careful now - I did not call the bottom for the entire market - but I can show you what is selling and thus represents the bottom for a certain type of property.

City- detached, nice/convenient location, updated kitchen and bath, newer roof/hvac, yard priced under $240K - selling.

Townhouse - 1,500+ sq feet, garage, new, around $230K - selling or re-sale in great shape without garage in a great location for around $180K - selling.

Redfields - garage, detached, 1,900 sq. ft.+, nicely kept up, under $300K - selling.

Scott Pershing said...


Good call on 3310 Petal Ln.

Weird coincidence, but I was actually in the process of doing a review on that property when I saw your comment.

For my valuation take a look at:

Pavel said...

Thanks, Scott. I looked at it yesterday and it's an awesome house!

Just to prove my point further on under $240K cute city properties: this house is under contract in 7 days. Cute house - small, but cute... and location is great for UVA folks:

A great alternative to a condo in my opinion (with no condo fees).

Philip said...

I agree, the Petal Lane house looks very nice and fairly priced. I hope to see it on my next house-hunting trip--if it's still available.

Pavel said...

To make sure I comply with the rules: Petal Lane house is listed by Real Estate III and Mulberry Ave is listed by Montague, Miller & Co.

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


That Mulberry house is adorable. But it's for one person or a couple who adore each other. Sure, it's a great condo replacement, or it's perfect for a resident coming here for four years who spends most of his/her time at the hospital.

But it's not a family house. The "family" houses are beyond reach of many familys. Pretty sure it was Downtownenvy, who is holding out for a family house, that said she just wanted the kind of house she grew up in.

Michael's idea may be attractive to some buyers--buy the interim house and move in a few years. But the fear is that one will then be "trapped" in the house due to depreciation and inability to find another buyer. This is a realistic concern in these times. Another concern is that living in a certain neighborhood for a larger house may be more practical. But for some buyers, the intangibles will outweigh any concerns and the interim house will do.

Still, Pavel, you may be right about the bottom of the lower end of the market. Attractive, move-in- ready houses under $240K do go quickly.

But this only keeps the market for "family sized" houses slow. And then there's another phenomenon: priced further below the showplace cottages are what we like to call the "shacks" in Belmont and elsewhere, which haven't been touched in 20-40 years, but are still listed for about $200K.

But back to 1633 Mulberry. According to City records ( the house has four rooms though in the online listing it looks like there may be one more. It's about $238 per square foot. There is the yard, which looks attractive.

It has changed hands several times, including to builder/reno Jeff Easter (who, for non-locals, owns a portion of "downtown Belmont," has a daughter who is a Realtor, and a wife who owns coffee/eatery La Taza, and the wife's brother runs the Belmont BBQ across the street. Small Town.)

1990: $65K
2003: 122K
2005: $182K

Some people would deduct 10-15% off the 2005 price as their offer. Others would add this amount to the asking. That's what makes this market so...whacky.

Phillip, thanks for disclosing info. If you're in Westchester, you must be watching with some amount of fascination the rapid decline of apt/condo/coop prices in NYC.

Scott, appreciate the "Gotta Have It" factor on your blog.