Tuesday, June 30, 2009

More Bad News For County's "Green" Belvedere Development

The DP has details on losing the line of credit that would have gone toward infrastructure. The County may have to step in. What a shocking turn of events. Read here.

Related Reading
Hauser Homes Seeking to Sell Belvedere Stake
Church Hill Homes Mass Foreclosures
Church Hill Not Paying Subs
Spence, Schmidt Foreclosures

Market Snapshot - Recent Albemarle County Asking Prices - Above Assessment

We followed a hunch and looked into the Asking Prices for some new listings in Albemarle County on a couple different days. Though Assessments have been declining for several years now, so much so that the County is having significant revenue shortfalls and cutting services, Asking Prices remain up. In many cases Asking Prices have "bubble valuation" over previous purchase price, and are also priced above Tax Assessments. These are Asking Prices; in many instances the Selling Price will be much different (or the property will not sell).

Still, what seems to be a pricing pattern is further interesting (to choose a word) since:

1. Tax Assessments are based on recent sales;
2. Sales have been declining for the past several years, including this year; even the Spring buying season has fewer sales this year than last;
3. There's a large unsold inventory of properties in the County, which grows weekly no matter how many sales there are simultaneously;
4. Prices continue declining nationwide;
5. Supply here is far greater than demand;
6. Demand for properties priced $300K and above is small here (as it is elsewhere in the nation).

Call it coincidence that on the days we looked at listings the detached (single family) houses were in the majority of cases priced over--and sometimes thousands and thousands of dollars over--Assessments. Or call it a trend.

Conversely, condos and townhouses are often priced near or below--sometimes well below--assessments. Asking Prices are sometimes below what current owner paid.

Perhaps many Asking Prices remain up so the Seller will get near what they hope for or need? If so, there are many agents who will say that this is a tactic that will not typically generate interest in the property.

New Listings weekend ending Sunday June 21
(Several listings were "proposed"; these are not included here, though they appear on the MLS)

5830 Lexington Lane Earlysville $339K
Assessed $259.2K
Paid $172.5 2000

1326 Pendleton Court - Dunlora - $549K
Assessed $499.9K
Paid $399.9K 2002

2601 English Oaks Circle - Forest Lakes - $520K*
Assessed $426.7K
Paid $550k 2006
*Priced higher than assessment, but less than what current owners paid

MLS 466826 Markwood Road $450K
Assessed $302.5K
Paid 295K 2004

MLS 466814 5335 Rockfish Gap Tpke - $479K
Assessed $453K
Bought 1997 for $45K, land only

MLS 466792 1120 Dryden Lane - cottage in Ednam - $768K*
Assessed $692.5K
Bought 1990 $336K
*(Asking Price higher than 2007's assessment)

MLS 466775 3190 Priddy Court - Ashleigh SD Barvoursville - $565K
Assessed $411K
Paid $278.3 in 2001

MLS 466836 9039 West End Circle - Old Trail - Attached - $190K
Assessed $194.8K
Paid $264.2K 2006 (Jim Duncan Tweeted this)
(Asking less than purchase price)

2424 Barracks Place Hessian Hills Condo $139.9K
Assessed $119.4K
Paid $142k 2006
(Asking less than purchase price)

943 Warwick Court - Stonehenge - Attached $152K
Assessed $151.4K
Paid $180.5 2005
(Asking less than purchase price)

1158 Mill Park Drive condo $229K
Assessed $196.8
Paid $182.5K 2003
(not following any trends)

The following are owned by same investor at Barracks West Condos:

MLS 466862 2659 Barracks Road $129K
Assessed $114.7K
Paid $134.9K 2006
(Asking less than purchase price)

MLS 466847 2656 Barracks Road $119K
Assessed $114.7K
Paid $132.9K 2006
(Asking less than purchase price)

MLS 466863 2656 Barracks Road $129K
Assessed $108.2K
Paid $132.4K 2006
(Asking less than purchase price)

New Listings Friday June 26

Of the new listings, several had no info available; they're not included here. One detached home was priced below assessment; it was owned by the builder. The other new listings were condos/townhouses.

MLS 467082 7134 Bradbury Terrace $699K
Assessed $770.4K
Old Trail Inc.

MLS 467084 872 Flordon Drive $955K
Assessed $780K
Paid $775K 2005

MLS 467047 3270 Waverly drive $599K
Assessed $596.2K
Paid $335.5K 1995

MLS 467075 1044 Susan Drive $599.9k
Assessed $594K
Paid $585K 2004

MLS 467060 3259 Lonesome Mtn Road $525k
Assessed $362.3K
Deed of Gift

MLS 467083 4201 N. Garth Road $447.5K
Assessed $406.8K
Paid 1997 $190K

MLS 467093 2639 Frays Mill Road $375K
Assessed $327.1K
Paid $352K 2006

MLS 467096 1125 Raintree Drive $339K
Assessed $305.7
Paid $265K 2004

MLS 466951 3 N Ednam Village St Attached Townhouse $1.175M
Assessed $1,023,900.00
Paid $475K 1997

Related Reading:
For Sale, Still: Grand Homes - The Washington Post
Housing Hallucination: Turning It Into A Rental When It Doesn't Sell

Monday, June 29, 2009

"Housing Hallucination" - Unsold? Turn It Into A Rental

Business Insider is tracking a phenomenon which they term "The New Housing Hallucination."

The 'hallucination' is this idea: "We'll rent for a year and then sell when the market comes back."

This phenom has been under way in Cville/Albemarle for a couple years now, growing into a strong trend in 2008. Now, in 2009, there are properties that have been for sale for more than a year which are being pulled off the market again and re-rented. The trend will grow stronger in the next couple of weeks, as sellers try to catch the August 1/ September 1 market of renters returning to UVA.

At the mid-to-high end in City of Charlottesville / Albemarle County (not the entire MSA) there are currently 430+ properties for sale $550K - $3M. Between $550K and $1M there are 323+ available. There are plenty of properties for sale above $3M as well.

According to Business Insider, Mark Hanson (aka Mr. Mortgage) of The Field Check Group has a warning: the market isn't coming back, especially at the mid-to high end. The "mid-to-high-end" is stalled everywhere, including the Cville MSA, where the majority of sales are under $300K; there are not a significant number of move-up buyers.

From Business Insider:

[Hanson] thinks the next segment of the market to crash will be the mid- to high-end, where many smug homeowners are now telling themselves they'll just rent their houses for a year while they wait for the market to "come back." Needless to say, Mark thinks these folks are dreaming.

Sales transactions have increased over the past couple of months because sellers are finally capitulating.


Most of the properties being sold are from:

a) those with lots of equity who know they better sell now or they will lose their opportunity
b) those that know they will be able to steal the new house that they buy so it’s a wash
c) short sales being approved more often
d) foreclosure resales

In this area, the renting phenomenon occurs because sellers:

1. Can't lower prices - overleveraged, Or
2. Won't lower prices - because they believe the property is "worth" the amount they want, Or
3. Don't understand that housing, globally, has been in a bubble and that pricing is in a process of "correction," Or
4. Have sufficient capital to "wait out the market," Or

Some combination of the above. Supply far exceeds demand. And will for years.

Even FDIC chief Sheila Bair has pulled her house off the market, after reducing the price by $100K, and is renting it out, waiting for the market to "turn"...on the advice of her real estate agent. She joins Treasury Secretary Timothy Geithner in becoming an accidental landlord.

Read the "Housing Hallucination" article here.

Related:
Asset bubbles have never reinflated - T2 Partners
State of the Nation's Housing - Joint Center For Housing Studies, Harvard University

Thursday, June 25, 2009

Realtors v. Appraisers

In the National Association of Realtors' press release for May Existing Home Sales, Chief Economist Lawrence Yun included some opinion:

[T]he increase in sales is less than expected because poor appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan.

Yun said the appraisal problem is serious. “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,” he said. “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.”

"Faulty Valuation" evidently means that the appraiser didn't value the property the way the seller, or seller's agent, was hoping it would be valued.

In the past few months, 45+% of existing home sales, nationwide, have been "distressed"--REO, foreclosures, short sales. In May this number dropped to about 1/3 of all sales. But Yun seems to hope that these will not impact what he calls "traditional" sales--seller to buyer. Really?

As one would imagine, the trade association for appraisers answered the trade association for real estate agents.

"Statement from the Appraisal Institute in Response to Lawrence Yun:
"

"We take offense with the notion that an appraisal is only good if it happens to come in at the sales price. That mentality helped cause the mortgage meltdown to begin with. The fact that the value reflected in the appraisal does not match the sales price is not the fault of the appraisal but a result of the market today.

"It should be pointed out that neither the buyer, the seller, the Realtor nor the builder is the client of an appraiser in a typical real estate transaction. In transactions where buyers are seeking loans, our clients are the lenders. Appraisers provide lenders with objective information and value opinions that help protect them from making questionable loans and investments and help them minimize risk. However, that should not suggest a bias toward lower valuation. Appraisers reflect the market, and sometimes, the markets don't act like we want them to or hope they will. Nonetheless, competent and professional appraisers understand this and develop credible estimates of value that ultimately help ensure that lenders loan the proper amount, buyers don't pay too much and sellers get a fair price.

Read the rest of the statement here.

Mr. Yun's commentary on "traditional" versus "distressed" sales combined with blaming a procedure undermines his credibility. It makes it seem he is unfamiliar with financial experts and economists and banks and investment entities, and Harvard pundits, who put out many projections indicating that "untraditional" sales will be part of the market place for years to come.

See:
Harvard's Joint Center For Housing Studies: State of the Nation's Housing, June 2009
Press release.
Fact Sheet.
The Report.

T2 Partner's: "An Overview of the Housing/Credit Crisis and Why There is More Pain to Come" here.

An explanation of some complaints are reported in an article from Bloomberg:

"The new guidelines require lenders to order valuations through third-party vendors called appraisal management companies that increase costs to prospective home buyers.
Appraisal management companies hire valuators who use automated systems and work at a discount, instead of experienced appraisers who have knowledge of neighborhoods and include factors that can increase a property’s value, such as home improvements or proximity to schools," said a critic of the system.

Read more of the article from Bloomberg.

The "new guidelines" the article refers to = The Home Valuation Code of Conduct, which went into effect May 1. PDF here.

The WSJ also covers the issue in What's With All the Moaning About Home Appraisals?

Calculated Risk gives an overview of how the HVCC came about and appraisals, in a piece about inflating values by the expert Tanta, who was a mortgage officer before she became a much-beloved and central blogging voice of the mortgage meltdown before her recent early death. Read here.

NYTimes Senior Financial Correspondent Floyd Norris weighs in on Yun's blaming appraisers:

"It sounds like the banks — the ones who loudly demanded that they be allowed to ignore “distress sales” when valuing mortgage-backed securities — are considering such sales of houses when they make mortgage loans. Given that a significant part of the housing problem was caused by appraisers who signed off on exaggerated home values, it takes a lot of nerve for the realtors to demand that appraisers now ignore market prices in order to let them sell houses. “Distressed and discounted” sales are real, even if they are inconvenient."

Read the rest of Floyd Norris here.

Bolding, italics ours.

Wednesday, June 24, 2009

New & Existing Home Sales Remain Down Nationwide

Existing Home Sales for May have been announced by the National Association of Realtors. "Existing homes" for this sales data mean detached houses, condos, and attached/townhouses.

According to NAR: Sales rose 2.4% from April, which is to be seasonally expected. Sales declined YOY from May 2008 by 3.2%. National existing months of supply hovers at 9.6%, and the national median price was $173,000 in May, down 16.8 percent from a year earlier. "Distressed" properties (foreclosures, short sales, bank-owned) declined to 33% of all sales in May.

For the South: May sales are 8.9% below a year ago. The median price in the South was $157,400, down 9.9 percent from May 2008.

Click for larger image in new window.



Mortgage rates spiked suddenly in May and are currently about 5.5% for a 30 yr fixed. This jump may cause slower sales in June, but also cause some pending or contingent contracts from May to fail to close.

New Home Sales:


The Census Bureau reports record low home sales, the lowest of a May going back to 1963. Median Price: $261K. 10.2 months of inventory.

LOCALLY: In the Charlottesville MSA, new homebuilding is down -59.35% over 2008.

Click for larger image in new window.


The "Good" News? The Fed Will Continue to Try to Control Mortgage Rates

But in Today's Federal Open Market Committee meeting, the board of governors of the Federal Reserve will leave things largely the way they are for the near future, due to prospects for slow economic recovery:

[The] Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn.

Related Reading:
May Existing Home Trends - National Association of Realtors
US Census Bureau Report
New Home Sales Record Low For May - Calculated Risk
New Home Sales: Down the Rabbit Hole - The Big Picture

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
Townhouse
Purchased 1982 $60K
Retiring?

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

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.
Retiring?

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

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
Inherited.
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.

Friday, June 19, 2009

Coldwell Banker: Lack of Move-Up Buyers

The Prez and CEO of Coldwell Banker, who considers the Spring selling season over, says: "The more important 'move-up' buyers were absent and that is not encouraging." We've already noted the lack of move-up buyers in this area.

"American Dream" Element of Owning a Home Found Not to Apply

Those glib guys over at The Business Insider have an eye-catching headline: "Female Homeowners Sadder, Fatter Than Renters."

Under discussion is a study, conducted by Grace W. Bucchianeri of The Wharton School of Business, that found female mortgageholders were 12 pounds heavier than renters, and not as happy. Even when controlling for other factors.

But the study goes deeper than just the above two points:

An interesting portrait of homeowners emerges from my analysis. While homeowners report higher life satisfaction, more joy from both home and neighborhood and better moods on an unadjusted basis, these promising differences become insignificant and much smaller in
magnitude once I control for a basic set of confounding factors: household income, housing value and health status. Overall, I find little evidence that homeowners are happier by any of the following definitions: life satisfaction, overall mood, overall feeling, general moment-to-moment emotions (i.e., affect) and affect at home. The average homeowner, however, consistently derives more pain (but no more joy) from their house and home. Although they are also more likely to be 12 pounds heavier(iii), report a lower health status and less joy from health, controlling for the less favorable health status does not change the results. My findings are robust to controlling for financial insecurity. Therefore, unadjusted differences in homeowners’ well-being might have played an important role in establishing the popular beliefs about the American Dream.


To help understand these surprising results, I investigate the homeowners’ time use pattern, family and social lives. The average homeowner tends to spend less time on active leisure or with friends, experience more negative affect during time spent with friends, derive less joy from love and relationships and is also less likely to consider herself to enjoy being with people. My results support neither the perception of gregarious homeowners nor that of housework-burdened homeowners. In this paper, homeowners are also shown not to be significantly different in terms of civic participation or social connectedness.

(colors, italics ours)

This is hardly a description of the Amercan Dream. Which is to say: homeownership should not be associated with the qualities or achievements that comprise "The American Dream." (A classless society, upward social mobility, and the ability to be anything and make wads of money through hard work have already been X'd off the list, too.) Rather, taking on a mortgage is often a matter of expensive practicality.

Nowadays
, a house is typically not an investment. In many cases it's not even an asset. It's a place to keep your stuff, sleep, have a social life, raise the kids. You know, all the important stuff. Which all may be done more cheaply by renting.

Especially in Charlottesville/Albemarle area, where prices remain beyond the historic metrics associated with housing costs (price-to-income and price-to-rent ratios). And especially in this housing bubble bust, the national recovery from which is expected to take a long long time.

The idea of housing should be disconnected from anything other than the need for a roof over one's head.

This area is at least a year away from its bottom in terms of price reductions and inventory clearing. The buyers, at all prices, simply aren't here (yup, check back into this post in June 2010 or, more realistically, 2011. "Hey! Those guys were right!").

For buyers who are going forward now, the intangible, romantic notion of "The American Dream" should be taken out of the equation as motivator or benchmark. Anybody suggestion otherwise is, IOHO, irresponsible. And besides, there's already enough to worry about.

See:
"The American Dream or The American Delusion? The Private and External Benefits of Homeownership" - Grace W. Bucchianerri, Wharton School of Business
"Female Homeowners Sadder, Fatter Than Renters." - Business Insider

Related Reading:
Gen Y Priced Out of the Cville Market
Lack of Move-up Buyers in Cville Area
Virginia Housing Development Authority Forecast For Regional Market
The Five Waves of the Housing Collapse - T2 Partners Via Business Insider
Baby Boomers and Housing Bubble Bust - CEPR
House Price Puzzle: Mid-to-High End - CalculatedRisk
The Real Housing Crisis Has Yet to Begin - Minyanville

Buying A House? What Are the Closing Costs?

A new website can help figure out what closing costs you or seller will face, as well as offer suggestions for local and regional title services, inspectors, insurers, and so forth. But don't forget you need to remember to add agent fees, if you use one, which should be negotiated ahead of time. See Closing.com.

Thursday, June 18, 2009

Mortgage Rates Down Slightly Week Ending June 18

According to Freddie Mac's survey, "Thirty-year fixed mortgages (FRMs) averaged 5.38% rates with an average 0.7 point, down from 5.59% last week."

Bankrate said in a media statement, "“The concerns about eventual inflation that drove bond yields and mortgage rates higher have been tempered by the reality of continued weakness in the economy.”

Other mortgage products were also slightly down from the previous several weeks. While in the 4's earlier this Spring, these rates are still lower than one year ago. Still, for the First Time Home Buyer relying on a tax credit to cover costs, every penny counts.

Ditto for the mortgageholder who wants to re-fi. But there could be trouble ahead: The Field Check Group's Mark Hanson says, "At present I estimate the there are $200bn in refi loan applications in process at lenders and brokers across the nation of which most will die unless rates get back at 5% with little cost — post-haste.”

See the mortgage numbers at HousingWire.
Related: Obama Proposes Regulation of Mortgage Products.

Tuesday, June 16, 2009

Snapshot: Charlottesville - Albemarle Real Estate Market Mid-June 2009

During the past seven days ending June 15, 66 properties came on the local market: 40 in Albemarle County, 26 in Charlottesville (and more in the surrounding Counties).

The following properties have their own "quirks" associated with the listings, which are symptomatic of this befuddled market, which has had declining sales and rising inventories since 2005.

There are also two main "issues" with any of these properties:

1. Can Buyer get an affordable mortgage?

2. Will the property appraise at Asking or Offering price under the new Home Valuation Code of Conduct? Don't miss this article from The Wall Street Journal: "Appraisals Roil Real Estate Deals." This is subscriber content. But WSJ wants Google hits, so copy and paste this: "Appraisals Roil Real Estate Deals - WSJ" into the Google search box, and you'll receive the text. (Links won't work.) This is perfectly "legal"; instructions are via Business Insider.

NEW LISTINGS

ALBEMARLE COUNTY

MLS 466673 - 5932 Blenheim Road - $6,000,000.00

The owner is a Realtor trying to sell a 7500 square foot house on 296 acres in Albemarle County. What could this agent know about the market that others don't? Great time to sell?

MLS 466463 - 1701 Bentivar Drive - $5,100,000.00

House: 11,000 sq ft Acreage: 88. Purchased: 2004 $3.2M. Assessed: $3.3M. Note differential between assessment and Asking; and expectation of increase in "value" in five years. Not much moving, nationwide, at this price point.

MLS 466545 - 3518 Glasgow Lane, Glenmore, Keswick - $768K

5100 sqft of house, "Dowell Scottish Home Winner of 5 awards 2004 Parade of Homes." Purchased: 2004 $628.2. Assessed: 683.4K. The usual Glenmore offering: recent construction, owner wanting to move after 3-5 years, assumption of increase in "value." How many houses fitting this same profile are currently available?

MLS 466627 - 672 Kearsarge Circle - $450K

This is a solidly middle-class cul-de-sac west of Cville on the way to Crozet, with long-term residents who bought at five figures, or families who bought in the 200's, occasionally 3oo's. The CMA doesn't take into account what houses on this street have been selling for, which is often what CMAs do: ignore the immediate neighbors value, ignore the historic price-to-income ratio, ignore the area median income, ignore the YOY sales declines, ignore the VHDA projection of price declines.

CHARLOTTESVILLE

MLS 466580 - 1429 Briarcliff - $239.9K

This 1700 sq ft rancher in Cherry Ave./Forest Hills neighborhood has had a 100% increase in "value" since 2000. This happens at many price points. There's a persistent idea in Charlottesville that the Bubble prices that were achieved really are the actual values of the properties--though sales have been declining here since 2005. But every time a house goes under contract, there's hope that a flood will follow. (A flood won't follow.)


MLS 466660 - 709 Graves Street - Belmont - $317K

Purchased for $200K in 2007, this 1677 sq. ft. house has been split into two apartments (you can find one listed for rent on Craigslist right now). The house overlooks a light industrial area and railroad tracks, but is in walking distance to Downtown. Nevermind that you may want to have the interior and the soil professionally assessed for lead and other industrial chemicals (as you may for any house this age or in a similar kind of location), then do a major remediation if positive: it's walking distance to Downtown AND Downtown Belmont!

RELISITNGS

"Relistings" can erase the history of a house being offered for sale. Some call it "MLS washing," and dishonest. Others claim legitimate reasons for giving a listing a "break." A competent real estate agent will provide a buyer with all sellers' earlier listings.

Albemarle County

MLS 466654 - 2554 Fray’s Mill Road - $585K

10 acres 2bed/2baths 1,500 sq feet. Purchased: 2000 for $217.5K. Assessed: $349.7K.

This house is in Ruckersville, north of Charlottesville, in Albemarle County, and is being marketed toward NGIC folk.

MLS 466636 - 1711 Old Forge Road - $369.9K

This house, which has County taxes but is moments from Barracks Road Shopping Center, didn't sell back in the Fall, when it was listed for $20K less.

Charlottesville

MLS 466612- 714 Levy - Belmont - $359K

Relisted $15k less. A property on Graves Street went under contract when listed at this price a couple weeks ago.


MLS 466610 - 906 Martin Street - $340K. Purchased 2004 $278K. Assessed $250K.

This house, close to the 250 Bypass north of Downtown, didn't sell last Fall when its asking price was $400K. Now it's a Short Sale. That price differential? It's a cash-out re-fi or HELOC, etc.

MLS 466402 - 724 West Street - $254.5K

New construction in the 10th & Page neighborhood. In the Fall, though listed $30K higher, a Vespa was offered w/this house. This house not only hasn't sold, but the Vespa store is closing. Coincidence?!

MLS 466404 - 728 West Street - $198.5K

Yes, it's next door to 724, though it's a rehabbed 20's bungalow. There are at least two more houses for sale in the 700 block of West Street, part of the 10th & Page neighborhood that was low-income and behind light industrial use commercial properties--and therefore undesirable until the Bubble. Many other houses are for sale in this area, whose gentrification has literally frozen, with prices coming down. 10th & Page, it turned out, was not the New Belmont.

Related Reading:
Gen Y Priced Out of the Cville Market
Lack of Move-up Buyers in Cville Area
Virginia Housing Development Authority Forecast For Regional Market
The Five Waves of the Housing Collapse - T2 Partners Via Business Insider
Baby Boomers and Housing Bubble Bust - CEPR

Thursday, June 11, 2009

All Contracts Written: Through June 1 2009 Via CAAR MLS

Below are spreadsheets for all contracts in the Charlottesville MLS for May 2009. Realtor Greg Slater has provided contract data for the past few months, and what you see below is the result of his efforts. Greg has provided contract data for the City, and for the Counties of Albemarle, Greene, and Fluvanna. Earlier 2009 Contracts, January-April, may be found here.

"All contracts"
means those that have closed, those that are pending, and those that are contingent. "Contingent" indicates a condition (or conditions) must be met before the sale may be completed, such as buyer selling current house; an issue fixed; obtaining of financing; etc. (As we've noted recently, however, there is a chance some pending and/or contingent sales may not close if buyer did not lock an interest rate).

CONTRACT DATA:

Click on image to enlarge in new window.




We'll let the numbers speak for themselves, but a few more points of interest:

ANALYSIS: While the spreadsheets below are contract numbers, the go-to guy for analysis is typically Realtor Jim Duncan at RealCentralVA, who tells us he'll have a Market Update on Friday, June 12.

CLOSED CONTRACTS: For graphs and reports on closed contracts for May, see Realtor Pam Dent's blog at Active Rain. She reports:

Average sale for detached family home Albemarle, May: $428K, or 93% of list.
Average sale for detached family home Charlottesville, May: $377.6K or 93% of list.

Closed contracts Jan. - May:
Cville detached homes -46.5% YOY
Cville condos -75% YOY
Albemarle detached homes -24% YOY

For closed sales reports, plus pricing graphs via Realtor Pam Dent, go here.

PRICING: For an interesting square footage graph for Charlottesville City pricing for January-June, go to Realtor Keith Davis' blog, Dirt Around Grounds. He notes that during this Spring there's been a drop of nearly 40% in asking prices. He says this about pricing: In general, pricing in the City is down. And, as known, pricing is, at best, erratic, and, at times, somewhat irrational." As might be expected, pricing has
rebounded for the selling season. Davis' main caveat for the future? Unemployment. (To that we might add resetting Option ARMs.)

Related Reading:
"It's All About the Prices" - A Sample of New Listings
Cville MSA Jan-April Contracts
Q1 Market Report
Asking Prices Gain With Seasonal Sales - HousingWire

$15K Tax Cred For All Homebuyers? - Bloomberg

Nothing Is Working to Stabilize the Housing Market. So How About....

Nationally, housing prices are still falling, foreclosures are rising, and there's still an over supply of unsold new and existing homes.

Mortgage rates are rising, putting into jeopardy pending contracts w/out ratelocks. Refi apps are going down. For the past couple of months, nearly 50% of all pending existing home sales have been foreclosures or short sales. Clearly, nothing is stopping the slide in price declines (except in certain nabes here in Nirvana) and not enough buyers have leapt off the fence. So how to reinflate the bubble?

A NEW HOMEBUYER'S TAX CREDIT. $15K FOR EVERYBODY!

Related Reading:
Rut-roh.
Zoinks.

Charlottesville Albemarle Commercial Sector Shows Signs of Life. Sort of.

The Daily Progress' Charlottesville Business Journal reports that there seem to be some signs of life in the commercial sector. As reported by The Hook in April, Wendell Wood has clearcut a patch of land up 29 for a hotel, bank, and proposed chain restaurant. And Octagon Partners have proposed a Kohl's and hotel at Hollymead Town Center, home to Target.

(Meanwhile, "Albemarle Place" remains, literally, a sign with a telephone number on it, and Whole Foods has been downsized.)

The caveat in the article? "But challenges remain. Vacant storefronts and empty commercial space persist across the area, and shopping center owners are offering incentives to attract businesses."

Not much has changed in the past few months. We looked at commercial RE for sale and lease in March. There are four more lease properties available for a total of 252; and only one property has sold or delisted, leaving 154 available for purchase.

Additionally,
there are many "For Sale" signs on undeveloped land zoned for business/industrial use on Rte. 29 and just off the corridor. There are also properties available for sale or lease that aren't listed on the MLS.

The concern here is not with chains--it's with the individual store owner or business person. A trip to the Downtown Mall remains distressing when faced with so many empty storefronts.

But any hotel or chain that can bring jobs to the area? Great. And Rep. Tom Perriello (D.-Ivy) just announced 125 new manufacturing/defense jobs in Albemarle County. No indication of when they'll start or what they'll pay.

Wednesday, June 10, 2009

1621 Bruce Avenue - Flip -$379.9K

New listing:
MLS# 466461
1621 Bruce Avenue
$379.9K
3 beds / 2 baths
1,768 sq. ft.
ca. 1955

Why would somebody attempt a flip in this day and age? No, it's not that they're insane. It's because, as anybody who has been looking in the past couple of years knows, there are periods when there's a large amount of inventory and little of quality re-sales available. Ranchers come on the market with their original kitchens from the '70's, and the listing will read "well loved by one owner!" or "cute vintage!" instead of "Don't forget to put money aside for your new kitchen and bathrooms and HVAC."

This Rugby Hills house faces some significant competition in the immediate area: drive around the one square mile of Bruce, Oxford, Westood, Cambridge, Rutledge and you'll see lots of "For Sale" signs. And some of these other houses have long-term owners who can, ostensibly, come down in pricing. (We said "ostensibly.")

Purchased in March for $247K; assessed, before rehabbing, at $350K. The above picture is "before." Click on the link to see "after."

1320 Kenwood Lane - Price Reduced $1.1M to $899.9K

Listing: "What if you could find the soul of SoHo in Charlottesville? .... masterpiece w/endless possibilities."

We'll nutshell the issues: the house may have the soul of SoHo, but the neighborhood does not: it's the Rutledge section of Cville, aka Meadowbrook Heights, near Charlottesville High School.

The neighborhood also does not have the "soul" of lots of cash: this unique, beautiful house (corrugated steel, concrete) sits among brick ranchers and capes that used to sell in the upper 1's 10 years ago, and now (if lucky) will sell in the low to mid 3's (less than this in 2010 ;0 ).

It's going to take a very special buyer to embrace this house A) in this neighborhood and B) in this economy (Got cash? Got Jumbo?). But hey, all it takes is one buyer.

MLS 462883
1320 Kenwood Lane
4 beds/2 baths
3170 sq feet

Price History:
Prior April 16: $1.1M
Prior to May 22: $998K
Now: $899.9K

Assessed: $408K - this is a number that essentially gives zero information on the property.

1868 Edgewood: Asking Price = 100+% Increase in 8 Years

New Listing
MLS 466382 - $875K
4 beds, 2.5 baths, 2225 sq ft
$393 sq. ft.
ca. 1929
Listing: "sweet cottage"

This street is part of a micro-neighborhood between Rugby Road and Barracks Road/Rte. 29, close to UVA, which has seen 100++% price increases over the past decade, nearing the $1M mark, for houses that are relatively unassuming.

1868 Edgewood asking price = $25K above assessment.
Transfer history:
100+% increase in price since 2001:
Mar. 2004 $625,000
Jan. 2001: $400,000

See 1868 Edgewood Lane listing here.
Nearby properties for sale:
809 Winston
1833 Fendall has now dropped nearly $100k in price.

Related Reading: House Prices Likely To Decline Further.

3434 Fosters Branch Road Doubled in Value; Now Back to 2004 Price

MLS #466296 - $859,000
3434 Fosters Branch Road
4 bds 3.5 baths, 2900 sq feet
ca. 1999; 8.5 acres
Albemarle - Stony Point (north of Cville, south of Barboursville)
Assessed $794,600

By "2004 Price" we mean a number between the 2002 and 2006 prices; 3434 Fosters Branch Road changed hands a lot in its short life. High demand, doubled in value.

Transfer
History
10/2006: $999,800
Deed book: 3313/488, valid
05/2006: $950,000
Deed book: 3204/703, valid
05/2002 $785,000
Deed book: 2197/197 valid
Built 1999: $519,000

Tuesday, June 9, 2009

4899 Parsons Green - Price Reduced: $1.1 Million to $799,900

MLS 459337
4899 Parsons Green Lane
Greenwood, Albemarle County
4 beds, 2.5 baths; outbuildings and amenities
6.17 acres
Ca. 1760

Price History:
2008: $1.1M Listing
Jan 2009: $950,000
Jan.-Apr. 2009: $899,900
Now: $799,900

Assessment: $560,200. Good example of the problem with "assessments." They're not appraisals. Greenwood is a beautiful section of Albemarle; this is a historic house. But who's the buyer in this day and age?
On the Block: Read Mark Davidson's complimentary article from The Hook. See the Trulia listing.

512 N. 1st Street, Sold 2007 $1.3M - Now Asking $900K for House

Price drop of $400,000 or 30% for sale without the second lot (yard).

This new listing, a stone Arts & Crafts, sits between 1st & 2nd Street in Charlottesville, in North Downtown.

MLS 466202
Ca. 1920, 5 beds/3 baths
Assessed $795K
Transfer History:
2004: $750K
Listed 2006: $1,450,000
(2006 assessment: $618K)
Sold 3/07: $1,300,000

The listing refers potential buyers to The Hook's On the Block article from 2006.

On the Market For 603 Days - One Price Drop

MLS 445642
1630 Meadowbrook Heights

Charlottesville, 4 beds, 3 baths, 2420 sq.ft.

On the market for 603 days with one price drop of $25K.

Asking: $324,900 September 08 and before: $349,900
Listing: "Priced below assessment of $352,000 - good value!
One-owner home in Meadowbrook Heights, a trustee sale on behalf of a life estate; there's no "move-up" seller and no hurry.