Friday, May 29, 2009

"It's All About the Prices" - A Sample of This Week's New Listings

We recently read a post on the Charlottesville Area Assoc. of Realtors blog by Realtor Greg Slater, entitled "It's All About the Inventory." Greg, with Real Estate III, serves as the CAAR President-Elect, and periodically sends data this way and offers commentary after posts.

Greg's post covered recent changes in how inventory is handled in the MLS system (new construction, proposed construction), but then went on to discuss inventory for the past few years. And he had thoughts about the "buyer's market."

He says:

Based on inventory levels, this market has been defined as a buyer’s market for quite some time now.

New Listings by Month
2006 2007 2008 2009
JAN 725 802 688 706
FEB 793 756 748 712
MAR 980 1027 801 702
APR 963 947 768 750

[We added for totals:
2006 - 3561
2007 - 3532
2008 - 3005
2009 - 2870
(the numbers are from 5/17)]

Back to Greg:

So what does all this mean?

We have always defined the market as buyer or seller’s based on the inventory and the number of months available.

With inventory levels remaining relatively constant now for over a year and sales levels (over $300k) still decreasing year over year, we may have to take the definition of “buyer’s market” a step further. It seems to me that our buyers and seller’s, in many cases, have opposing views of market value right now. Maybe this “buyer’s market” is better defined as a market in which the buyer’s opinion of value carries more weight than the sellers.

I think one of the challenges of pricing a home in this market is that buyers and sellers are using different methods to determine value. Many buyers (who believe prices are still coming down) want 2010 prices now. Many sellers think their home is still worth what it was in 2006. As REALTORS®, we need to help our sellers understand what buyers are focused on right now. And maybe just as importantly, help our buyers understand the reality of this market as well. There’s frustration on both sides of the negotiation and it’s our job to find the common ground.

[bolding and colors are the BB's]

So despite having a current inventory that's lower than that of 2008, sales for the region are down by 1/3 from 2008.

So of course you, savvy buyer, are saying: What's with the prices?

Especially when Greg says, "Maybe...the buyer's opinion of the market carries more weight than the sellrs."

The short answers are:
a. It's the season. There's a momentum.
b. People need houses.
c. Low interest rates (except as of today they're approaching 5.5% again).
d. First time buyer's tax credit of up to $8K.
e. Some prices have come down.

a. There's a shadow inventory--short sales, foreclosures, FSBO's, people "waiting out the market."
b. Many sellers are unable to lower prices.
c. Buyers can wait longer than sellers.
d. The majority of this inventory will not sell, especially that above the $300K level.

Keeping in mind that "buyers' opinions carry more weight than sellers'", here's a sample of what's offered this particular week. 30 properties in Albemarle and 12 in Charlottesville came on the market in the past seven days ending May 28.

Albemarle: 1014 properties available
Of these, 716 are detached, single-family homes
Charlottesville: 352 properties available
Of these, 223 are detached, single-family homes



MLS# 466009 - $319,000
Type: Condominiums
Address: 106 Melbourne Prk, #g
Approx. SqFt: 2,052 Acreage: 0.00
Bedrooms: 3 Year Built: 2006
Total Baths: 3 Full: 2 Half: 1

Owner Paid $295K 5/2008 $200K Drop from previous sale
Previous Owner: $488K 1/2007
Assessed: $297.4 - lower than asking

There are 57 condos priced between $200-300K in Charlottesville


MLS#: 465976 - $210,000
Address: 1620 Mulberry Ave
Approx. SqFt: 1,000 Acreage: 0.15
Bedrooms: 2 Year Built: 1940
Total Baths: 1 Full: 1 Half: 0

Owner paid: $106K in 2001 - $100K increase - expects annual ROI of 9.5% (and will get it)
Perfect example of the use of a CMA
Assessed: $196.7K

In other cities, including ones within 100 miles of here, this cottage would be about $60K. But they'd be missing out on Nirvana. This will sell in two seconds flat. And next year? What if we're all surprised that anybody would pay $200K for a cottage?


MLS#: 465874 - $230,000
Address: 1006 Meridian St
Approx. SqFt: 1,758 Acreage: 0.13
Bedrooms: 3 Year Built: 1955
Total Baths: 2 Full: 2 Half: 0

Owner paid $112.5 in 2001 - 100% increase in price
Assessed at $238K

There is no "move-up" coming out of this; it was an investment property. It's on an odd part of the street. It's a classic asbestos shingle cottage, harking back to the days when Belmont was Blue Collar instead of faux-hipster. It's sale depends upon people who like the very close couple of neighbors--or who don't care.


MLS# 465972 - $264,995
Address 221 Azalea Dr
Bedrooms 6 Total Baths 3
Full Baths 3 Half Baths 0
Year Built 1959 Sq Feet(Finished) 3,484
Acreage 0.19 Sq Feet(Unfinished) 0

Owner Paid: $132 5 2/2001 - Are we sensing a trend here? There's a serious conviction that cottages have doubled in value during the bubble years. But this one has an addition.
Assessed: $338K

Listing says: "At $76 per square foot of finished space, with 6 bedrooms, 2 kitchens, and abundant informal space, this well built 3500 square foot brick and hardiplank home is priced to sell. Owner can live in one space and rent the other; or live away and rent the entire house out."

This is among the lowest prices per SF we've seen in the City. And yet, so takers.


MLS #465919 - $370,000
210 6th Street NW Charlottesville
3 bed, 1.5 bath

Owner Paid: $247,500 in 7/2004
- $123K or 33% increase

Listing states "priced $30,000 below assessment." and "An easy walk to the two cultural centers of Central VA: downtown and UVA."

This house was bought at a time when anywhere in Cville was marketed as "Great!" And the owner was no doubt assured Housing Always Goes Up. Is this a neighborhood that supports a $400K house? This is the "problem" with CMAs.

There are 60 houses priced $300-400K available in Charlottesville.



MLS#: 466014 - $265,000
Type: Attached
Address: 1946 Tudor Ct
Approx. SqFt: 1,591 Acreage: 0.00
Bedrooms: 3 Year Built: 2006
Total Baths: 3 Full: 2 Half: 1

Owner paid: $285 in 4/07 - Asking Price is $20K less
Assessed: $264K

MLS# 465918 - $239,500
Address 4229 Earlysville Rd
Bedrooms 3 Total Baths 2
Full Baths 2
Year Built 1912 Sq Feet(Finished) 1,716
Acreage 0.53 Sq Feet(Unfinished)

Owner Paid $86K in 1996
Assessed at $146.2K - $90K less than asking

Listing: "Charming farm house with lots of windows and light. Home business potential (zoned Village Residential...Sale due to Seller's move out-of-state. Agent married to Seller."

Interesting that agent is not owner/seller...just married to him. Ahh, semantics. And codes.


MLS#: 466011 - $595,000
Address: 2501 Thomas Jefferson Pkwy
Approx. SqFt: 3,546 Acreage: 7.00
Bedrooms: 4 Year Built: 1972
Total Baths: 3 Full: 3 Half: 0

New construction
Assessed at $422K

Assessment: maybe it doesn’t take into account the addition mentioned in the listing. That's the problem with "drive-bye" assessments, isn't it?

91 Albemarle houses are priced $400-500K


Forest Lakes
MLS# 465868 - $615,000
Address 3268 Turnberry Circle

Owners paid $625K in 2007 - $10K more than current asking
Assessed: $548K - $65K below current asking

Listing: "Superb, pristine home in desirable Springridge!"

Sellers just trying to relocate--again. Without losing $.

There are 42 $600-700 houses available in Albemarle County.



MLS#: 465870 - $419,000
Address: 1298 Dunlora Dr
Approx. SqFt: 2,670 Acreage: 0.25
Bedrooms: 4 Year Built: 1997
Total Baths: 4 Full: 2 Half: 2

Owner paid $369K in 2004.
Assessed at $404K from a high of $455K in '07.

Listing says: This attractive colonial is the LOWEST PRICE IN DUNLORA.

Clearly, they want to sell. See above.

There are 50 properties priced between $400-450K in Albemarle County.


$1,425,000 MLS# 465818
Address 1719 Downing Ct , #q2 6
Bedrooms 6 Total Baths 5
Full Baths 4 Half Baths 1
Year Built 2007 Sq Feet(Finished) 7,007
Acreage 1.13 Sq Feet(Unfinished) 1,255
Design Cape Cod, Contemp

Assessed: $400K less than asking. Additional land may not be addressed in assessment.

"The Simple Elegance of Southern Living", says it all in this Cecil Cobb custom residence on over 1 acre in Glenmore.

Yeah, that's what you want in the Blue Ridge: a large scale Cape Cod. If the listing doesn't make you laugh, it might be worth a look....

Related Reading:
It's All About the Inventory - CAAR Blog
10 Reasons There Aren't More Move-up Buyers

April 09 Detached Home Sales
Cville MSA Contracts Jan - May 09


Greg Slater said...

I was browsing your selection of listings and thought I should point out a discrepancy on the Melbourne Park info. The sale for $295k in 2008 was the first sale of this unit as new construction. My guess is the $488k transfer in 2007 was the dirt under the entire block.

Sorry I missed participating in the recovery thread. I was glad to hear some perspective from some actual buyers and why the bought now.

I'm anxious to continue my analysis thru May later this week and will share when I am done.

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

Thanks for the correction on Melbourne.

That Recovery thread turned..."interesting." There are still some details hanging, which we'll try to address in the coming week.

Look forward to your May analysis.

same said...

There's some data hanging ... and Scott Pershing seemed to disappear after the numbers were posted ... also "interesting."

kenny powers said...


Your data simply confirms what many of us know: that a relatively small number of higher-end sales have been made at or around the assessment price. This doesn't change the fact that most sellers in this market are asking for, and apparently holding out for, significantly more than the assessment -- and they are not getting it. As a result, we have a stagnant, overpriced market with a huge inventory of unsold homes.

You seem convinced that higher-end homes close to or in the city have special appeal, will not be impacted by the broader inventory, and likely will never fall below their current assessment. Many of us obviously think you are wrong, but only time will tell.

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

Well said, Kenny Powers.

Same, you posted some numbers out of context. You were making a claim with incomplete data and seem surprised that others wonder about this.

No addresses, and no previous sales, just some assessments and most current sale price.

Perhaps you were expecting Scott Pershing to post all the data for you. Or perhaps Jane Doe.

At any rate, another reader took it upon himself to look into the numbers you provided and match them with addresses. The data will be provided when he's finished.

Rob said...

I work at UVA Medical Center, am a first time home buyer, and have a credit score of 800+ but refuse to purchase in Charlottesville.
I looked at a house on Caroline Ave for 196,000. Besides the asbestos siding, roof that needs to be replaced, kitchen that needs to be updated, and windows that need replaced(except on)it would a deal at 96,000 not 196000.
I challenge any realtor or real estate agent to justify that asking price.
Buyers will buy when sellers and their agents become realistic.
Asking prices here are a joke.

Agreed said...

"I challenge any realtor or real estate agent to justify that asking price. Asking prices here are a joke."

You're too polite Rob. You forgot to mention the junked cars at end of street.

Let's all say it together: "Comparitive Market Analysis"

same said...

A few replies:

Bubble Blog: 1. I could have understood when Jane Doe asked for the addresses and other information. But I'm surprised that you think there is anything wrong here, since I'm assuming you know how to download the data from the city. In any event, I offered to provide the data -- which, I repeat, is fully available to everyone online -- and easily exported to Excel. If you want it, I'm happy to send it to you as well. There is nothing out of context, and nothing hidden there. (If you prefer, I'm happy to post the data with the addresses in this comment box; though it doesn't support the formatting from Excel. It would take no time at all to post that data with addresses.)

2. The assessment, most recent sale price and addresses are simple to aggregate. It's more difficult to get earlier sale prices. As I'm sure you know, the county does provide them, but they aren't easily exported to Excel. I'm not going to do the work of providing the complete sales history (usually three or more sales) for 50+ properties. I think it would be interesting to know that, and maybe you have someone who will do it. But I'm not sure how relevant it is, especially for homes bought before the bubble. Still, even if you think it's relevant, surely the data posted was significant enough to warrant some response, rather than complete silence.

Kenny: 1. I posted data for all the homes reported sold by the county since 1/1/09 between 1.2 million and $550k, something like 50 homes. Those reported sales probably don't include many homes that went under contract this spring, which haven't closed yet. But so far, the average sale price was 100% of the 2009 assessment.

2. If the average sale price is 100% of assessment, some sellers are obviously getting more. Though if you read my comments from the last thread, I agree with you that sellers asking over assessment are probably asking for too much. I've been saying this from the beginning: houses in this range priced at or near (5-10%) assessment stand a much better chance of selling.

3. Maybe you're right that this market is still a huge bubble that will crash (25%? 35%? 40% -- pick your definition of "crash") in the future. But where is the evidence for that in the numbers?

3. I never claimed that the high-end of the Cville market is immune from the downturn. All I said was that Bubblers seem to have over-stated their case with respect to this part of the market, and that there just isn't the data to support claims of a steep decline. I'm not saying that it's impossible or even improbable, only that present sales -- on average -- aren't showing it. Of course, as you say, time will tell.

Last point: as I said before, I'm perfectly willing to be corrected with respect to the data. If I've missed something or interpreted the numbers incorrectly, that's good to know, and I'm happy to say as much. Also, if anyone has the city data, it would be really interesting to see a county v. cville comparison.

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

Rob,Thanks for your input. That property last changed hands 20 years ago. It's been on the market for months and is assessed at $193K

As you know if you've been looking at houses at this price point and size, they often have asking prices around $200 per sq.ft. but are in need of updated "everything." And yet, some (Belmont, Woolen Mills) will sell quite quickly. Go figure.

You said, I'm not going to do the work of providing the complete sales history (usually three or more sales) for 50+ properties.

This is understood. You've been derided for not being willing "to do the work."

The bubble blog does "the work" you describe, and commenters do, too.

Most buyers are much more interested in this info than in assessments. In fact, buyers tend to dismiss Realtor/RE agents use of assessments as a misguided marketing tactic--floating the number out as if it has something to do with actual appraisal.
"I think it would be interesting to know that, and maybe you have someone who will do it."You're right, it would be very interesting. We're looking forward to seeing this data ourselves.

"But I'm not sure how relevant it is, especially for homes bought before the bubble."It's relevant because homes bought before the bubble are typically priced for sale the same as those bought during/after the bubble, even when the mortgage has been paid long ago.

Why? Assessments and CMA's. (Hi, "Agreed") And, in many cases, overleveraging: HELOC's or cash-out re-fi's.

A seller who bought pre-bubble is often more likely to be able to accept what Greg Slater and the Va. Housing Development Authority refer to as "2010 prices."

As Kenny says, "Time will tell." But it's actually more likely that properties you are discussing will have larger declines in prices and sales and assessments going forward.

If for NO other reason than this: fewer qualified buyers.The supply here far exceeds the demand.

same said...

Bubble -- I posted that data for two reasons: (1) It was the data that Scott Pershing was demanding. You can look back to the earlier thread. He wanted Sales Price / Assessed Ratio. Those numbers are easily exported to Excel from the county, and so I posted them. (2) They do tell us something about a range of the market. Obviously it would be good to have more data, including sales history. But compiling that data would take hours, maybe days. I'm a recent buyer with a job. If I was realtor, or an industry analyst, it'd be worth investing the time. But I just don't have the time to do that. Even this blog isn't running complete histories on hundreds of properties.

As for being "derided," I can accept Pershing's initial criticisms -- he wanted numbers, and, as best I could, I provided them. Scott's also done some good work on his blog, and he deserves credit for that. But he hasn't analyzed this part of the market.

As for Kenny and Jane Doe, as far as I know, they haven't contributed anything in terms of numbers or data, so I don't think they're entitled to do any deriding.

Anyway, I posted the county numbers in good faith -- as you put it, "Everybody is entitled to their own opinion, but not to their own facts." I think that's right. When Scott and others demanded numbers, I looked for the data, and posted the only information available to me, which comes from the county. I'm sorry you and others here don't seem to like those numbers. But, at least for part of the Cville market, your predictions aren't (yet?) supported by the existing data.

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

This market is behind others. The bubble pricing continued (continues) long after it has ceased in other markets. The inventory remains large and consistent. The wider economy remains troubled. At the lower end, mortgage rates are rising. While Jumbo mortgages may be having a decent rate right now, it also takes 20% or more down, and a high credit score. Gen Y rarely has cash down for a $600-900K; mom and dad are finding it harder to come up with for Junior or for themselves. The decline in this area may be long, and slow, resulting in fewer moves and new buyers. You can be relieved this season if you think you made a good price on your house.

But it's likely not an investment, and likely not even an asset. It's just a house.

The US, the globe, has been in a large bubble. The bubble is popped. If some properties in Cville remain in the bubble, bully. It's rare air.

anonymous47 said...

Once again, I agree with Same. He posted a good set of numbers presenting a correlation between 2009 assessments and subsequent sales prices in a certain price range. Why should he do additional work for other commentators on this blog? Let those who are truly interested dig up the numbers themselves.

In addition, he is "a recent buyer with a job." He did extensive research, apparently found a home he liked at what he believes is a good price and put his money where his mouth is. That activity provides information and a perspective that is different than if one is sitting on the sidelines.

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

Anon47, a reader is working on the info & it will be posted when received.

kenny powers said...

Is there any way to determine objectively which buyers' agents are doing the best job in assisting their clients in obtaining the lowest possible prices in this market (e.g., as measured against the 2009 county assessment)?

Unrelated, I was curious, so I compared 18 high-end listings ($750k to $1.5 mil) of four top agents and found that their average listing price was 29% above the 2009 assessment! I'm sure others can do a more thorough analysis, but I thought I would just throw that out there. If accurate (?), this would support the observations by many of us here that listing prices are ridiculously inflated, perhaps to the point that they should be ignored.

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


If you'd like to share that info, we'd post it.

Pavel said...

Kenny, interesting proposition. Not really enough numbers to go by though.. when doing a quick analysis for Albemarle Co and Charlottesville City only (and taking account residential property type), ranked by number of buyer-side transactions we have agents selling:

8 (1 agent)
6 (1 agent)
5 (11 agents)
4 (13 agents)
3 (21 agents)
2 (43 agents)
1 (127 agents)

Every year majority of closings happen in June - so really - if you think this analysis is useful it should be done sometime in July as the number of transactions will increase for most buyer-agents creating a more accurate picture. Even so, what is the point? I'm sure a good number of folks out there contributing to this blog feel like the best buyer's agents and those truly looking out for their clients interests and not their own should have ZERO sales this year (or close to it) :)

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


Is this list for closings that happened in May?

Disagree with this:
I'm sure a good number of folks out there contributing to this blog feel like the best buyer's agents and those truly looking out for their clients interests and not their own should have ZERO sales this year (or close to it) :)

Most buyers DO see the need for representation.

Pavel said...

This list is for buyer-side transactions/closings in Albemarle County and Charlottesville City; Date range of 01/01/2009-present. Residential category only (does not include commercial, land, multi-family, farms). There are also 37 buyer-side sales in 2009 labeled as NONMLSAGENT or NONAGENT. These numbers will change dramatically in June - as in my experience - June typically has the largest number of closing compared to any other month.

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

Pavel, that data is interesting, especially considering the idea that an agent needs 15 "sides" per year to make a living (as per article).

Kenny also has a different question, whose answer is a matter of opinion:

"Is there any way to determine objectively...which agents are... doing best job in assisting their clients in obtaining the lowest possible prices in this market?"

Our guess is probably not.

Pavel said...

Yes, in my opinion, 15 "sides" will not be reached by 85%-90% of CAAR real estate agents this year. The data I showed before is only for Albemarle Co and the city of Charlottesville. Considering the entire CAAR MLS: only about 22 agents have had more than 10 total (list and buy) closed sales all year. Again, June is a large "closings" month so these numbers will change and I will revisit this statistic in July.