Wednesday, July 1, 2009

It's July 1. 2009 is Half Over. So Where Are We?

It may be hard to believe the year is half way over-- but it is. So not only are the June sales contracts and numbers something to look forward to, but the CAAR Market Report will be available around July 15th.

Meanwhile, here's a local and national look at what's going on in RE and with what the NYT is now (apparently officially) calling "The Great Recession."

Local Numbers

Below are the "sold" numbers from the Charlottesville Area Association of Realtors website. What do they mean? Well...something. The "Active Inventory" number doesn't just cover the Charlottesville MSA; it covers all of Central Virginia. Ditto "Sold." But these are the only publicly published, frequently updated indicator of what's been sold, so we're reproducing the charts.

JUNE (top) and MAY (bottom) 2009

APRIL 2009

For the entire area, inventory is holding steady; median price has gone down from May to June, as has DOM.

A recap of all contracts signed through June 1 may be found here.

So is the Spring Selling Season over? Well, some folks think it ended on Memorial Day. Others believe there will be more buyers around through August. Whatever your belief as buyer, seller, or Realtor, June typically sees the most closed sales of the year.

As we've said recently, we expect price drops to accelerate, properties to be pulled off the market, and unsold homes to turn into rentals.

The same factors continue to hinder home sales in this area and nationwide: the economy, rising unemployment (which has almost doubled, locally, in one year), tighter lending standards, fewer (qualified) buyers, lack of move-up buyers, rising mortgage rates, appraisal issues, supply far greater than demand, among other things.

  • Area unemployment: while in our area it's lower than nationally, it has about doubled in a year. (And try using the "it's lower than nationally" on somebody who's lost a job and see if you don't get punched in the mouth.)
  • More in a string of trouble at Albemarle County's Belvedere development.
  • Albemarle County Schools expect to make more employee and operations spending cuts.
  • The Meadowcreek Parkway appears to be going forward.
  • Housing Prices in major markets have returned to 2003 levels, or lower.
  • Weekly mortgage ReFi apps plunged 30% in past week.
  • However, the Obama Administrations Affordable Home ReFi plan is now going to allow 125% LTV ReFi's, since so many homeowners are underwater.
  • Delinquencies on Prime mortgages have recently doubled. (Do we really need to point out that Albemarle County is going to see its own version of a mid- and high-end market collapse due to resetting Option ARM's? An ex-Prez of CAAR indicated something of the kind in Comments after this story.)
  • The Obama Admin's Economic Forecast had "too much hope" built into it....Uh oh.
  • The Governator has now declared a State of Emergency.
  • Thinking of moving back to The City? You might get a great deal on real estate.
  • And of course, there's the continuing problem of rising foreclosures.
  • Calculated Risk's economic summary for June in graphs.
And finally, here's the update on Robert Shiller's famous "History of Home Values" chart, from reader Steve Barry over at The Big Picture:

Click for larger image in new window:

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