Monday, November 30, 2009

Christmas Comes Early For UVA Football Program--Especially Al $4.3 Million Groh


Albemarle County School Budget Will Be Cut Up To $10.4 Million

Albemarle County continues slouching toward a mediocre quality of life now and in the future.

The DP article gives the hard truths about the school budget cuts, the County/City $ agreement, and the possibility of a raise in property taxes.  Property values have declined so much that even with a raise in taxes, the County will still experience a budget shortfall.  Read here.

Related Reading:
Albemarle County Budget Down $5.4M

Christmas Canceled in Scottsville As Unemployment Surges; Already Canceled in Waynesboro and on 29 North

The Uniroyal/Hyosung Tire Plant is closing, leaving 106 people jobless.  Scottsville, a town on the James River in southern Albemarle County, has 500+ residents.

Earlier, Christmas was canceled in Waynesboro, with the closing of the Mohawk Plant a week before Christmas.

Christmas will also be cancelled for 68 US Postal workers in Charlottesville, as the sorting facility will be moving to Sandston (near Richmond) to save the federal government money even as it leaves these folks jobless and receiving unemployment benefits.

Related Reading
Current Bureau of Labor Stats for Charlottesville MLS.
Unemployment Doubled in Charlottesville Albemarle in Past Year; 20 yr High
Private Sector Job Growth Ended in 2008

Wednesday, November 25, 2009

Edgar M. Bronfman Lists Albemarle County Estate for $17 Million

Edgar M. Bronfman, the philanthropist and patriarch of the Seagram's family, seeks to sell the 600+ acre Georgtown Farm.  In addition to his business dealings, Bronfman served as president of The World Jewish Congress until 2007.  He is father to Edgar M. Jr, CEO of Warner Music Group;  local chanteuse Lauren Hoffman calls Bronfman "Grandpa."

MLS 471601
636 acres
7850 sq feet, 5 bedrooms, 9 baths
ca. 1975. 
McLean Faulconer has the listing.

See The Hook on tax breaks for "farm use," and mention of the farm.
Photo via/courtesy CAAR. 

Related Reading:
Patricia Kluge Lists Albemarle County Estate for $100M

Sunday, November 22, 2009

Sales and Prices of Single Family Homes in Charlottesville and Albemarle, Year to Date

2009 compared to 2008 sales of detached home.
Click for larger image in new window.

This is from Realtor Jim Duncan at RealCentralVA, and was originally on his Posterous.
Related Reading:
To Buy or Not to Buy, That Is the Question

Robert Shiller Wonders If Recovery Is All In Your Head - And Current Info Indicates It Just Might Be

The co-creator of home-price tracker Case Shiller Index, an economist and Yale professor, says in the NYT, "Beyond fiscal stimulus and government bailouts, the economic recovery that appears under way may be based on little more than self-fulfilling prophecy."

We all want the Great Recession to be over, so we're acting like it is.  But recent data indicates "recovery" is a long, slow way off.
History, and the cycle of recessions since the early 20th Century, expect us to believe in two year downturns.  Shiller says, "....people start to think it’s time for the recession to end. The very thought begins to renew confidence, and some people start spending again — in turn, generating visible signs of recovery."

However, he says, continued vigilance is needed: there is still "nagging doubt" about whether the US is actually in a "recession" or a "depression."  Continued vigilance is needed, he concludes, to prevent the R from becoming the D.

Recent data supports the notion that Virginia, as well as the US, have a long way to go:

The good news is that NGIC/DIA will bring jobs to this area.  Many, however, are already taken. And of 300 employees recently surveyed, less than half said they would relocate.  Meanwhile,

Unemployment increased in 29 states in October...including Virginia. The City faces a "gloomy" economic future.  Are the two back to back bank robberies anything but a response to the bad economy?  More folks are relying on area food banks: a 30% increase in the past year at the Blue Ridge Area Food Bank.  The State is facing a 3.5 Billion budget shortfall.

Nationally, the housing downturn continues:

Bloomberg: Recovery Will Wait Until 2010 or Later
  • New home construction drastically decreased 11% in October
  • mortgage applications were at a 12 year low
  • mortgage delinquencies and foreclosures now impact one in 7 households in the US
Reuters: US mortgage applications at a 12 year low even as rates drop to lowest in 6 months

Business Insider: Perception of home value remains skewed:

Nationwide, when asked about their own home’s value over the past year:
  • • 25% think their home’s value has increased
  • • 26% think their home’s value has stayed the same
  • • 49% think their home’s value has decreased

In reality, 72 percent of U.S. homes lost value over the past year, and 22 percent of homes increased in value.

Business Insider Recap

Zillow's latest press release 

MSNBC: Of mortgages in trouble, 33% are fixed 30 yr mortgages, not "Sub-Prime" or "Alt-A"

Mark Hanson via BI: The Slow moving Train Wreck in Mid-to-High End Housing will take years for values to stop falling and sales to pick up

Mortgage Bankers expect foreclosures to peak in 2011
Moody's says commercial real estate nationwide is off 43% from peak in 2007 
WaPo:  Foreclosure and Delinquency Rates Spike Amid Growing Unemployment

CNBC: Housing Slump to Get Worse Next year, Not Better

The best news this week?  Swine Flu seems to have reached its peak

That Glow on the Horizon? DIA Jobs in Albemarle County

The DP heralds next September's work-force influx of the Defense Intelligence Agency employees at Rivanna Station.  This means spending in the local economy.  But according to a recent survey of 300 employees, only half of whom responded, the relocation rate of current employees is less than 40%.

The good news: there are still jobs available, and there will be a job fair on December 14.

Related Reading:
Private Business Job Growth Ended in Area
Local Unemployment Doubled in Year

Law Professor Says "Homeowners Should Be Walking Away In Droves" From Underwater Mortgages

A law professor is mystified by people who continue paying on "underwater mortgages," where the value of the home is less than what is owed.  And who is most likely to walk away?  20-Somethings.

 Brent T. White is an associate professor of law at the University of Arizona (a state decimated by foreclosures and plummeting property values).  He's written a paper titled "Underwater and Not Walking Away:  Shame, Fear, and the Social Management of the Housing Crisis." 

White's idea and paper have been in the press earlier this year, but it got attention again in the past week with the most current mortgage delinquency numbers:  14.4% of all residential mortgages are delinquent were or in the foreclosure process during Q309, according to the Mortgage Bankers Association.

From WSJ:

“Homeowners should be walking away in droves,” Brent T. White, an associate professor of law at the University of Arizona, wrote in a discussion paper. “The real mystery is not—as media coverage has suggested—why large numbers of homeowners are walking away, but why, given the percentage of underwater mortgages, more homeowners are not.”

White's paper is here.
The post from the WSJ Developments blog is here.
A NYT article about three 20-somethings with little $ who bought a $1M property with an FHA loan, here.  (Not that they'll walk away....)

Monday, November 16, 2009

Charlottesville Albemarle Area Real Estate: To Buy Or Not To Buy, That Is The Question

And if you do decide to buy, how do you decide what to offer?

This post is an aggregate of the local, regional, and national information that is currently available (mid-November 2009) to buyers.  It comes six weeks into the Fourth Quarter of 2009.  It quite possibly tells a buyer (and seller) everything they might need to know ()....And if it doesn't, there will surely be additional material posted in comments.

This post began in response to a query by a reader who says s/he is about to buy, in the comments after a post about the extension of the Homebuyers Tax Credit. 

To recap, the buyer is looking in Western Albemarle County, desiring something close in to the City of C'ville, about 2500 sq ft, 4 bedrooms, 2.5-3 baths.  The buyer has been watching the market and believes purchase prices have dropped 15-20% in the past year, and that there is not much further "flexibility" (ie, declines) coming in that particular area; additionally, rents seem to be holding steady in the area where buyer wants to be. 

Q: So why should the buyer wait?

Answer #1:  The buyer shouldn't wait.  As we noted in the comments, they have compelling reasons to buy: they want to settle, and they want control over their environment.  They seem to have come up with a numbers scenario (downpayment, morgate math) with which they can live.  And if the buyer is going to buy right now in the half million range, they are obviously secure in their employment.  They have saved a large downpayment, in addition to a year's worth of living expenses in the event of illness or job loss.  Additionally, the buyer must have enough financial "cushion" so that if the house drops in value, they can weather the loss of equity.  And part of the "weathering" would come from the fact that they plan to stay put for at least seven years.  (What would make the value drop further?  A rise in foreclosures at that price point due to Option ARM resetting, or a sudden onslaught of those waiting to sell putting their houses on the market, or an increase in name a few).  So if all these elements are in place, sure, why not?  Why not buy? 

Answer #2:  The buyer should wait for several reasons:

A.  Because of what "Crunching Numbers" says in the comments:  To rent will be $1850 per month, while to buy will be $3250 per month.   UPDATE:  but is this math accurate?  See how Crunching Numbers gets to these figures here, and then read the original commenter's disagreement with the numbers in the Comments section following this post.  The  rent versus own numbers are much closer in terms of what the original commenter considers monthly expenses.

B.  Additionally, there are many unknowns in the housing market right now--locally, regionally, nationally.  And if a buyer doesn't negotiate a prescient deal now, there's lots of financial chaos that could ensue.  (For a proposal on how to make an offer on a house, see Salvatore's comment after this post.)  (And if you want yr blood to go cold, read around here.)

It's the knowns, and the unknowns, to which the rest of this post will be devoted--things that would make some buyers wait.   It's these local topics:

1.  Appreciation
2.  Wages v. Home Prices 
3.  Sales
4.  Unemployment
5.  Foreclosures
All leading to 

6.  "Recovery" 

Before getting to the list, however, a few things to keep in mind: 

The "bad news": 

1.  The Federal Housing Administration now has about 40% of the housing market, from about 2% a few years ago.  It now guarantees one in five loans for single family homes, and its cash reserves are below what Congress mandates.  Bailout?  No: Treasury.  In announcing this debacle the other day, Housing and Urban Development Secretary Shaun Donovan  said "We are in an exremely volatile period...We are in uncharted territory." (Read more here.)  
2.  Mortgage rates for 30 yr fixed are below 5%...but mortgage applications are at a nine year low.  
3.  Foreclosure filings were beyond 300,000 for the 8th straight month in October. 
4.  More than 2.4 million homes are expected to be lost to foreclosure in 2010.
5.  Making Home Affordable, the mortgage mod program, has not actually helped 4 million homeowners avoid foreclosure, as per original projections. 
6.  Fannie and Freddie are due for more losses.   That is, the taxpayers are.
7.  National Unemployment is at 10.2%, and a shocking 17.5% when including underemployed individuals, those who have stopped looking, those whose hours and wages have been cut, etc.
8.  Shadow Inventory, estimated at 7 Million Homes.  Mortgage guru Howard Glaser, via Realty Check:

What I am most worried about is March and April of next year.  What happens to a housing market that seems like it is finding its footing at that point?  Because several things will happen simultaneously:  You've got the option ARM resets beginning to kick in, you have the home buyer tax credit expiring, maybe for  real that time, and you have the Federal Reserve maybe running out of money to buy mortgage-backed securities. If we add on top of that, banks beginning to release some of this inventory ,which they have been holding on to for a long time, those three items are potentially very destabilizing to the  marketplace.   So I'm concerned.  I think buckle your seatbelts for Spring of next year.

9.  Housing in VA won't regain its values until 2023.

The "Good News": 

1.  The Homebuyer Tax Credit has been extended/expanded, and is in place until April 30, 2010. 
2.  The Federal Reserve has extended its purchase of Mortgage-Backed Securities through March, 2010, which should effectively keep mortgage rates around 5%. 

Now, to the list.  Everything that comes below tells the Buyer one thing:  The Asking Price is a starting point.  And usually a high starting point.  The Offer needs to take all of the following info into consideration.  Starting at 10% below asking, and making further deductions--and as frequent commenter Downtownenvy says, The best tool for negotiating in this market is your feet.


Area Appreciation
Anybody who has lived in the area for more than a couple of years has seen housing prices, and asking prices, skyrocket; only recently have both begun falling.  The real data?

The Federal Housing Finance Administration (FHFA, formerly the OFHEO, Office of Federal Housing Enterprise Oversight), compiles data on pricing in a purchase-only, seasonally adjusted index.  For existing single family (detached) homes in the Charlottesville Metropolitan Statistical area (Cville, Albemarle, Greene, Fluvanna, Nelson):

Five year appreciation: 2005-2009 Q2: 33.70%.  The Rank is 168 of 296,  -3.58  for 1 year,  -2.56 for the quarter. This is the "slow down."  See pdf.  But the bigger jumps come earlier.  Data to 2007 shows: 

The 10 year appreciation ending in 2007 in the Charlottesville MSA was 135%.  Charlottesville ranked 64th.  See here.  Note that for the 10 year appreciation, most of the states ranked higher than Cville are all "Big Bubble" states--California, Florida, Arizona, New York, Maryland/DC. 

The five year appreciation (2003-2007) in the Charlottesville Area was 69.22%.  Charlottesville ranked 74th.  See here.

For FHFA  quarterly percentage increases, go here.  Maps of Metropolitan Statistical Areas here. 

The logical responses to these numbers are HUH?  and WHY?  Bubble, and "protected market."  To put the bubble years in context, let's look at 


Throughout the recorded history of home sales, which is about a Century, property appreciation has been startlingly consistent, averaging about 1% per year, plus 1-2% for inflation.  In Bubble periods, it's a whole other ball'o'wax...until it isn't.

Click for larger image in new window 

The chart in its original is here; the updated version (above) is from The Big Picture.


As in many areas, wages and home prices got detached from each other during the bubble.  This was possible due to "liar loans"--no necessity to state an actual income, or to prove it, as well as Option ARM loans, a loan that would start low and eventually reset to a higher rate.  According to the Thomas Jefferson Partnership for Economic Development, in a recent presentation to the Charlottesville Area Association of Realtors, 

The average wage in the Greater Charlottesville Area is $42,588:
Click for larger image in new window 

Historically, the prudent buyer would spend no more than 2.5x annual wages on a home.  The Charlottesville MSA is one of the most expensive areas of the state, where buyers have spent nearly 6x income for a house.  The following graph is from the Virginia Housing Development Authority
Click for larger image in new window

The orange bar is where we are now.  

Median and Average Prices for Sold Single Family Homes in the Charlottesville MSA:
Click for larger image in new window


According to the VHDA,
Click for larger image in new window

Red line = Cville.  Earned wages and housing prices don't have a realistic relation to each other in this market. 

3.  SALES 

Is it any wonder that with the fairly low median wages combined with high appreciation and the end of "easy" mortgage products,  area sales are at a decade low? 

The graph below is from August 2009; in September and October there were stronger sales than seasonally expected, as the $8k homebuyer tax cred was slated to expire November 30. 

"May be near bottom," as the graphic says, is hopeful speculation on the part of the VHDA.  Sales have picked up in other parts of Virginia due to mass foreclosures which caused rapidly falling prices and made housing more "affordable" than during bubble years.

Click for larger image in new window

Another graph, this time for all of Central Virginia, through the end of 3rd Quarter 2009, September 30.  Data from CAAR, graph from a reader.
Click for larger image in new window

When things do sell, they're at the lower price point. As an example, 69% of all single family (detached) home sales in the City of Cville this year have been under $350K:

Via Nest Realty.

There's been a significant lack of move-up buyers, and higher-priced homes are selling very slowly.  "Higher priced" as in above $500K; and above $1M in this area?  Fuggedaboutit.

TOTAL SALES through the 3rd Quarter in 2009 as compared to 2008, via Nest Realty Group.  The Group decided to include Louisa in these stats, hence the "E" for extended.  (Louisa is not part of the Metropolitan Statistical Area.)
Click for larger image in new window

Lastly, the Charlottesville Area Association of Realtors publication of total sales numbers for the 3rd Quarter in 2009 and previous years.  "Total sales" include single family detached houses, townhouses, condominiums.  Again, notice that areas outside of the Metropolitan Statistical Area are included: Louisa County, Orange County, Greater Augusta (Augusta County, Cities of Waynesboro and Staunton):

Albemarle County sales down 50% from 2005 peak
Charlottesville sales down 48% from 2006 peak
Fluvanna sales down 63% from 2005 peak
Greene sales down 45% from 2005 peak
Louisa sales down 36% from 2005 peak
Nelson sales down 71% from 2005 peak
Orange sales down 55% from 2005 peak

Click for larger image in new window


THIS is the quarter million dollar (half million dollar, million dollar) question, isn't it?


Local Unemployment has doubled in the past year.  It is currently at a 20 year high.  UVA has a wage and hiring freeze.   The troubles are not necessarily over.  Private business growth has ended, and jobs are declining. 

And evidence of this is everywhere you look, in the form of commercial real estate signs "For Sale," and "For Lease."

NGIC and DIA are bringing jobs to the area--but they're already spoken for.  In the future, the employees may require goods and services that create new jobs: but this growth will be slow, over the next few quarters/years.    

The latest round of cuts?  Postal Employees face the axe.


Add the following foreclosures numbers for the Charlottesville Area, and the result is 676.  The total sales for same period YTD for the Cville MSA are 1559...676 is 43% of 1559....

So nearly half of what was sold was replaced by something that will once again come on the market...and at a lower price. 

Add this to the inventory from sellers who are "waiting out the market" to list?  Buyer's market continues....

And there will be trouble from Alt-A loans:

The VHDA presentation opens with the following slide, but we'll close with it:

But what does "recovery" mean?  A return to pre-bubble prices?  A drop in asking prices?  A return to the historic metric of price-to-2.5xwage ratio?  Sales levels that don't keep declining?  A halt in foreclosures?  A point of view that understands that a house is not an "investment" primarily, not a profit machine or an ATM or HELOC, but a place of comfort for an individual or family? 

Related Reading
Virginia Housing Development Authority Forecast Link  
Lack of Move-Up Buyers in Charlottesville/Albemarle
Median Prices Charlottesville Albemarle Area 2001-2009 
Higher Priced Homes Sell At Snail's Pace
 Graphs Showing Declining Sales 2003-2009

Friday, November 13, 2009

Friday the 13th: FHA, Foreclosures, Fannie, Freddie...and Declining Mortgage Applications

The Federal Housing Administration is in deep trouble. The agency insures loans made by private lenders, and a recent audit showed the capital reserves were o.53%, much below the 2% mandated by Congress last year. 

[T]he agency insured too many loans to unqualified borrowers in 2007 and 2008, a position the agency itself now agrees with. Nearly one in five loans it insured in 2007 now fall into the category of “seriously delinquent,” it revealed Tuesday.

Note that these loans were made years after Bubble Peak, primarily to those with low(er) credit scores who couldn't come up with more than 3-3.5% down payments.

HUD Secretary Shaun Donovan has no worries.  CalculatedRisk wonders about mortgageholders who aren't ready for homeownership.

US Foreclosure Filings topped the 300,000 level for the 8th straight in every 335 houses received some kind of late or default or auction notice, up 19% from a year ago, according to RealtyTrac.  Read more.

More than 2.4 MILLION homes are expected to be lost to foreclosure in 2010, a conservative estimate.  Add this to the over 7 MILLION homes comprising the "shadow inventory" that are not yet on the open market?  Home values will be driven lower, and the cycle will continue.   While lower prices/values would be good for areas such as Charlottesville Albemarle which haven't finished "correcting" to historic metrics, in other areas falling values will continue a vicious cycle. The NYT urges the Obama Admin to do more with Making Home Affordable, the mod program.

Fannie and Freddie Warn There Will Be More Losses due to the weakening condition of mortgage-insurance companies:

Fannie and Freddie together have required capital injections from the Treasury of $112 billion since the government took them over through conservatorship last year.... Fannie and Freddie have received payouts of $2.3 billion and $658 million, respectively, from mortgage insurers through September this year....But as conditions for mortgage insurers deteriorate, Fannie and Freddie have warned that their claims against the insurers may not be paid in full. 

More here.

Mortgage Applications, for both new purchases and re-fi's, were at a nine-year low last week, despite rates beneath 5%.  Read here.

Thursday, November 12, 2009

Charlottesville City Revenue Projected To Be Down $2M in Fiscal Year 2010

But Fiscal Year 2009, which closed June 30, ended with a surplus.  You wouldn't know the important elements of the City's  2010 revenue projection, however, which come from declining sales, meals, lodging, personal, and property taxes, unless you read the very last line of The DP's article on the subject. 

Related Reading:
Charlottesville Albemarle Commercial RE Continues to Struggle
Albemarle County Faces $5.7M Budget Deficit

Monday, November 9, 2009

Charlottesville Albemarle Commercial Real Estate: Many Vacancies Plus Businesses Still Closing. But Hey, Could Be Worse!

Stores and restaurants are still closing in this area--most recently, think "Nature's Child" Downtown as well as 29N, and Wild Greens in the North Wing of Barracks Road.  The strip mall that includes Whole Foods, Shopper's World on 29N, has a slew of empty storefronts, and the ex-Circuit City building in Albemarle Square is still empty--just "waiting" for the "right" tenant a year later.   

Whole swaths of the Downtown Mall are deserted, and the ugly exoskeleton of the Landmark Hotel is an exclamation point on the emptiness.  New retail and business construction has ground to a halt, except in the case of Wendell Wood and Wal-Mart's expansion. 

But the important thing to remember, according to an article in today's DP, is that things could be lots worse When compared to Richmond, a metropolitan area many times the size of Cville, we're doing just fine.

Read the good news spin here.  

Related Reading:
Nationwide Commercial RE: "Gloomy Times"   
Albemarle County Basing Budget on Fanciful Future RE Tax Revenues
Area Commercial Real Estate Spring 2009
Local/National Unemployment Latest Figures

Saturday, November 7, 2009

Ponzi Schemer John M. Donnelly Sentenced To 7+ Years, $5.3 Million Restitution

Confessed Ponzi schemer John M. Donnelly was sentenced on November 6 to 7 1/2 years in Federal prison and ordered to pay restitution of more than $5.3 Million.  He is currently being monitored by GPS, out on $100K bond, and must report to prison in six weeks.

During sentencing, one victim noted Donnelly lived a luxurious lifestyle. Donnelly's house is a 5 bedroom, 4.5 bath, 3,000 sq. ft. house on 3.4 acres on Church Plains Road in Crozet's Church Hill subdivision.  The house was purchased in 2003 for $440K; it is currently assessed for $597,700 (pictured, to left, from County records).

Wife Deborah Donnelly is the Executive Director of UVA's Curry School of Education Foundation, which is responsible for garnering charitable donations.  The house, which is titled jointly in both names, was purchased after the alleged Ponzi scheme began.  While Deborah Donnelly was initially named a "relief defendant," she has not been charged with any wrongdoing.

Additional assets include a Hummer, 64 acres in Fluvanna, and multiple motorcycles—all of which have or will be liquidated to help repay victims, according to Courteney Stuart for The Hook.

The judge was excoriating during sentence.  Again, from The Hook:

Judge Norman K. Moon expressed disgust for the crime that bilked 30 of John M. Donnelly’s friends and motorcycle racing teammates of more than $5 million.
“This defendant knew these victims were making life decisions,” said Moon, who referred to Donnelly as “evil” at one point and scoffed when defense attorney John Davidson suggested Donnelly was sorry for the pain he’d caused
“If they hadn’t caught you, you’d be doing it still today,” he said.

Related Reading: 
The DP's coverage of sentencing

Wife, UVA Fundraiser Deborah Donelly, Charged as "Relief Defendant" 
Madoff Lite: Feds Claim Charlottesville Ponzi Scheme by Lindsey Barnes, The Hook
SEC Press Release
SEC Complaint Against John M. Donnelly
US Commodities Futures Trading Commission Press Release
SEC Press Releases

Friday, November 6, 2009

Nat'l Unemployment At 10.2%, But Unemployment Benefits and Homebuyer Tax Cred Extended/Expanded and Fannie Mae Starts Deed For Lease Program

Big day in bailouts for the common man.

America is out of money.  It's time to fire Timothy Geithner.   Too bad all of the taxpayer funds that went to bailing out the Too Big To Fail banks and firms didn't go directly to the American people; would have made for a happier, if not better, nation.

The national rate of 10.2%, plus the "real" rate of 17.5% unemployment, highest ever, which includes those who have stopped looking or are underemployed in hours or salary, will continue to impact every state until it is resolved.

The Commonwealth is faring a little bit better than other states.

Our area has a 20-year high in unemployment: In the Charlottesville MSA (Metropolitan statistical Area, which includes the City plus Albemarle, Nelson, Greene, and Fluvanna) the most recent unemployment data shows 6.4% for the MSA, 7% for the City, and 5.3% for the County.  

A  commenter on this post sent the following links, showing that Va's unemployment scenario in the Southside has improved in the past six months: a smaller area of widespread 10-15% unemployment to widespread 8-10% & 6-8% unemployment. 

Related Reading:

DP on State Unemployment
BLS, Va Economy at a Glance
Current Unemployment in Cville Area
DP on Extending Tax Crud
Cville Move-Up Market and Tax Crud

Some pictorial representations of unemployment during this recession compared to others.  Click for larger image in new window.

From CalculatedRisk

From The Big Picture:

More Good Taxpayer Money Being Thrown After Bad As Fannie Mae Posts Another Giant Loss

Not only is the Obama Making Home Affordable program of mortgage mods not helping, things are actually getting worse. Read the insanity of the details.


But possibly not in time for any of us to enjoy that rooftop bar during our salad days.

Albemarle County Is Fast Tracking Back To The 20th Century As Deficit Grows

And not in a good way.   Albemarle County faces a budget deficit of $5.7 Million, $1M more than was projected just in October, due to declines in real estate and sales tax revenues.

Albemarle County needs a new way to project future revenue, which takes into account the coming wave of Option ARM resets that will lead to short sales, foreclosures, and further drops in  home property values.  Combined with commercial real estate foreclosures due to lack of commercial tenants and current commercial RE "owners" unable to re-fi due to being underwater, Albemarle County is seting itself up for years of pain.  Toss in shoppers who are keeping their wallets closed?  Ouch.

Get a clue (or 5.7 million), Albemarle County.

From The DP:

Richard Wiggans, the county's finance director, said the county is seeing continued declines in sales and real estate tax revenue....

[O]fficials are considering axing funding for recycling and affordable housing, as well as a program designed to secure conservation easements....

Even if the county raises the real estate tax rate to 77.2 cents per $100 of assessed value, the county might have to practically eliminate any new infrastructure projects for the next five years -- in addition to millions of dollars in budget cuts[....]

The next part of the article would be good for a laugh if it weren't so thoroughly contradicted by local and national projections regarding real estate values.

The proposed 77.2-cent tax rate means the average homeowner would pay the same real estate taxes as this year for the next two years, officials say.  Assuming real estate values begin to pick up, there would be a slight increase in the third and fourth years, maxing out at a three percent increase in real estate taxes five years from now[....]

"Assuming real estate values begin to pick up" = Wishful Thinking, not financial planning.

bolding = ours
Related Reading:
When Will House Prices Regain Their Peaks?  
Commercial Real Estate in Cville Area  
Higher Priced Homes Sell At Snail's Pace  
VHDA Forecast For Area Home Prices