Tuesday, June 23, 2009

Snapshot: Do Charlottesville's Latest Listings Indicate Lack of Move-Up Buyers?

We've posted about the lack of move-up buyers in this area, which helps keep the inventory high. The FTHB (First Time Home Buyer) is present, so transactions that are $300K and under account for most sales, and has lowered the median sold price. (Not asking prices; "sold" prices.) Lack of move-up buyers is also a nationwide trend. And it's trouble in any market. Keeps sellers trapped in their homes.

So this week we looked at new listings in the City of Charlottesville for the past seven days ending Monday, June 21, to see if it looked like these potential sales would generate more potential sales.

Our conclusions are not definitive. There will likely be corrections about sellers in the comments. But our conclusions are simple deductions from data available in purchase (transfer) histories and via Google.

This isn't to say that every week will have the same distribution of new listings that don't seem to provide "move up" buyers. But this week's new listings seem to indicate that many sales will not lead to "move ups."

Of the 24 homes listed here, only 3-6 seem likely to generate "move ups."

Homes for Sale With Possibility That Owner Will "Move Up:"

MLS 466870 - 1637 Rugby Ave - $450K
2007 purchase: $370K
Assessed $419K
Rapid turnaround to resale may also indicate leaving town. Ditto below.

MLS 466633 - 714 McIntire Road - $274.9K
North Downtown, overlooking the baseball field on McIntire Road, which is soon to be feeder to Meadowbrook Parkway.
Purchased 2007 $250K
Assessed $250K
See note above.

MLS 466632 - 1009 Druid Avenue - $212.5K
In the middle of Belmont, on a street that is 1/2 gentrified.
Purchased 2004 $160K
Assessed $178K
Starter home.

MLS 466612 - 714 Levy Ave - $359K (down from $379K)
North Belmont, walking distance to Downtown and "Downtown Belmont."
2002 purchase: $214K
Assessed $347K
Near the Spudnut Shop, and with at least one interesting neighbor. Owner could be leaving town for new employment.

MLS 466845 - 1216 Smith Street - $229k - Flip
Purchased 2008 $125K - Foreclosure
Assessed $195K
Flippers likely to reinvest in more lower-end property? Lateral.

MLS 466589 - 756 Lexington Ave - $415K
North Downtown near MJH
Purchased 1992 $46K
Assessed $375K
Batting cage in backyard combined w/purchase date is clue to kids gone. Empty nest? Downsizing after 17 years? Or going all out?

Properties Whose Sale Will Not Likely Generate a "Move Up"

This conclusion is based upon length of time property has been owned; current owner most likely retiring or downsizing.

MLS 466825 - 158 Brandywine Court - $224.9K
Purchased 1982 $60K

MLS 466693 - 1303 Knoll Street - $199.9k
Lower Belmont near industrial zone/I-64.
Purchased 1990 $51K
Assessed $199k

MLS 466925 - 912 Nassau Street - $145K
Listing says "Belmont." Technically, yes. Actually, "Hogwaller." This is adjacent to the Charlottesville Live Stock Market and down the street from a large trailer park.
Puchased 1992 $20K.
Assessed $127K.

MLS 466733 - 1514 Westwood - $424K - Relisting: old price = $489K
Rugby Hills/Rose Hill
Purchased 1987 $89.9K
Assessed $467K

MLS 466828 - 2603 Jefferson Park Circle - $349K
Fry's Spring area off JPA.
Purchased 1976 $47K
Assessed $404K
Long-term owner, price indicates lack of kitchen/bathroom/HVAC updates.

MLS 466882 - 1508 Rutledge Avenue - $569.9K
Rugby Hills. This cul-de-sac has ranchers and modest 3 bedrooms, often 1600 sq ft.
2002 Purchase: $429K
Assessed: $597K
Most Likely Secured Employment Elsewhere.

Definitively Not Buying, Though Heirs Might:
MLS 466794 - 1643 Meridian Street - $238.5
In Lower Belmont, not "faux- hip-Belmont-is-the-new-Willaimsburg Brooklyn" Belmont
Assessed $255.6
Owner passed away.

Landlords: Owners Not Occupying the Property and/or Out of Town

If a seller is putting something into this slow, declining market (as per VHDA), they may not "reinvest," except for the above flip. Of course, we could be wrong. But why would you let go of a rental? Unless you're overleveraged? Or have a mortgage resetting? Or your rental never got the rent you thought it would? And/or you know that there will only be more price declines, so better sell sooner rather than later?

MLS 466660 - 709 Graves Street - $317.5
North Belmont, near Downtown and "Downtown Belmont."
2007 Purchase: $200K
Assessed $309K
Currently divided into two units.

MLS 466521 - 109 Blincoe Lane - $352k
2007 non-resident owner; new construction in 2007.

MLS 466584 - 502 Druid Avenue - $209.9
Belmont, on the "uncool" (to use a euphemism) side of Avon.
Purchased 2002 $73K
Assessed $228k
Out of state owner.

MLS 466587 - 110 Howard Drive - $384K
Off Barracks Road, near 29 N./Barracks Road Shopping Center
Purchased 1997 $152.k
Assessed $384K
Nonresident longtime owner, ostensibly downsizing for retirement.

MLS 466431 - 1010 Grove St - $209.9K
Overlooking the railfoad tracks in Fifeville, behind UVA hospital.
Purchased 1997 $54K
Assessed $175k
Owner lives in a nearby city.

MLS 466833 - 106 Laurel Circle - $274.9
Cherry Avenue/Forest Hills.
Purchased 1976 $34k
Assessed $236.5
Owner is out of state.

MLS 466905 - 815 Belmont Ave - $299K
Backs up to Downtown Belmont, The Belmont BBQ, The Local and new gumbo shack. Has been a rental. Next door to an apartment building.
Assessed: $287K
Owner lives outside City. Maybe upon sale, owner will return to The Velvet Rut?

New Construction

Brookwood Drive Attached Units:
466658 $264.4 #46
4666659 $254.4 #48
466657 $249.9 #47
466662 $239.9 #58

The basics: As of June 21, there are 207 detached homes available for sale in the City of Charlottesville. May's closed sales for detached homes was 45% less than May 2008. Properties going under contract were 43 this year, 50 in 2008 (via RealCentralVA). There are currently 329 properties of all types (including the 205) available as of Monday, June 21, in the City.


not anonymous said...

I''ve gotten too used to this market when I see the Jefferson Park Circle listed at $349K and wonder why it's so "cheap."

Wonder how many other employees "amicably" left UVIMCO?

The hogwaller house listing is embarrassing. The price is for a blue collar worker (only in Cville!) but the description and location are for a Bemont wannabe. Please.

Anonymous said...

Wondering if any of the usual Realtor commenters can say whether they think this kind of owner distribution is typical?

I feel like a lot of the places I've been interested in have either been lived in for 20-30 years and need too much done to justify price. Or they werebought in the past few years. So in that case what the seller hopes/expects to make b/c IMO they paid too much is now considered what the place should go for.

But whether somebody has owned the house outright for years or still has a big mortgage, the asking price is similar.

Doesn't this help explain why sales are so low?

It would seem like the people who owned their places longer and/or mortgage free would be very interested in lowballing the other SELLERS so they'd get their houses sold.

Buyer said...

Below is is Big Picture's Barry Ritholtz chiding NAR's economist Lawrence Yun who wants local appraisers:

"One of the more bizarre aspects of the news release was Lawrence Yun’s call for appraisers “familiar” with local neighborhoods:

YUN: “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales. In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.”

RITHOLTZ to bottom:

That is outrageous.

Consider: The NAR remained notably silent during the appraisal corruption during the boom; Home sales based on loans to people who couldn’t afford them that drove prices higher were fair basis for appraisal comparables — but when these same homes are sold — inevitably through forclosure auctions, REOs or distressed sales — they should be ignored? Only up, not down?

Even worse, they seem to be calling for a return to “local” (i.e., friendlier) appraisals — like the good ole’ days. You remember the “friendlier” era of corrupt appraisals that were rife during the credit bubble?

Am I reading this correctly? It looks like code for USE APPRAISERS (i.e., CORRUPTIBLE) WHOM YOU KNOW.

I thought I was inured to the idiocy of the NAR and the fetid stank of corruption that their press releases come with, but even I am astonished by the filth emanating from their offices today. Shame on you . . ."