Friday, October 30, 2009

Patricia Kluge Lists Albemarle Estate For $100 Million


Is the philanthropist and vineyard owner leaving our fair County? 
WSJ has details.  C-VILLE has background.

Photo: WSJ.

Wednesday, October 28, 2009

Homebuyer Tax Cred Extended Through Apr/2010. Will This Do Anything For Charlottesville Area "Move-Up" Market?

Last night (10/27/09) it was a done deal; today, it's iffier.  But it's likely that the "First Time Homebuyer Tax Credit" is going to be extended and expanded to include "Move-Up Buyers" and run through 4/30/10. 

 Is this going to significantly increase Move-Up Buying in this area? 

Short Answer:  Not likely.  But do read on to learn why.

The new tax cred of $7,290 UPDATE $6,500  has expanded income caps and will be available for "move-up" buyers who have lived in their homes for five years or longer.  (The cred remains $8K for first-timers.)

But that's a huge problem here and elsewhere: lack of move-up buyers.  This blog noticed the phenomenon in the past in this post, and in another post about listings which had sellers who were not going to "move up."

While the second post was a one-week snapshot of new listings, the problem persists: those who are selling in this area for the most part fall into one of these categories:

1. seller is leaving town for a new job
2. seller is leaving town after a UVA program or residency ended
3. property is for sale by a trustee due to owner death
4. seller is retiring or ill and downsizing
5. seller has been in the property about 5 years--there's an Option ARM resetting
6. seller wants to unload an investment property
7. the property is REO or short sale

8. seller is trying to downsizee before a foreclosure or shortsale 

And--oh, yeah--then there's price.

After excluding the above sellers, there's a handful left over confronted with the prices of "move up" homes.  A tax credit of $7,290  $6,500 is not much of a motivator.  

With the current tax cred and an FHA loan,  $8K can essentially cover the 3.5% down payment for a "starter home" of up to $230K. Even so, 2009 sales were already below 2008 sales here, despite the tax credit and low mortgage rates.  Look at City sales for an example.  According to Nest Realty Group
  • 69% of all transactions through Q3 were $325K or below 
  • Nearly 2/3 were $250K and below



So this little bit of Federal Gov't intervention won't do much more in this area.  But it's a ridiculous version of "extend and pretend" and further enslavement of the American tax payers.


As this blog pointed out the other day in response to The DP's advertisement article, this homebuyer tax credit is rife with problems.  Read more about the problems via The Baseline Scenario  (Thanks, Main Street).   And for the most cogent indictment of this idiocy, see The Automatic Earth:

That principle is: the US government is busy actively raising home prices. And there we are back to what I've been saying about Fannie and Freddie for the longest time. While the reason given by Washington is that its involvement is driven by a desire to "stabilize" the markets, that is at best only part of the truth. What the White House and Capitol Hill are trying to do is "stabilizing" the markets at a level that they find acceptable. Which, if we recognize that their policies increase the number of homes on the market as well as their prices, evokes the image of a hamster on a flywheel. And that hamster WILL get tired at some point.

Who loses in this set-up? First, homebuyers, since they pay much more for their homes than if the government would stay out of the market. Then again, what obligations do the buyers really have? They get a home for free, more or less, and often with a non-recourse loan to boot. In the end, the by far biggest losers are the American taxpayers, who have to watch helplessly as their own chosen government shifts a fast increasing share of the losses of the housing market onto their tab, all solely for the benefit of the one and only party that stands to profit.

That is, the banks. Which can unload repossessed properties at much higher prices, given the tax credits. Which can keep properties and loans at greatly elevated prices on their books, which allows them to fool their shareholders and depositors into thinking they are far more healthy than they would be without government involvement. Who can use the artificially raised "values" on their books for highly leveraged financial wagers that if they pay off allow for multi-billion dollar bonuses, and if they don't can be channeled back to the taxpayers' account.


(BB emphasis) 
More:
Updated Details...CR notes this can be used for "move down" buyers as well.

The Details of the Tax Credit Extension
US Senators Near Deal (Thanks, anon)
Uncle Sam Adds 5% w/ Tax Credit

OUCH: The Worst September Since '81 And New Home Sales Cliff Diving

Follow the embedded links to even more data from Business Insider.



This is some mighty ugly data.



Yep, it's some mighty lazy bloggin' in this post. But while you're here, be sure to follow this link to the NYT's ("New?" What do they mean "new"?) handwringing.

Monday, October 26, 2009

The Charlottesville Daily Progress on the First Time Homebuyer Tax Credit: Was That An Article, or An Ad?

The DP had a Sunday feature about the up to $8K First Time Homebuyer Tax Credit, which will sunset on November 30, 2009--36 days from now.  

But it's confusing: is this feature a "news" article, or is it a long advertisement? 

The piece quotes area RE broker Ray Caddell and the Charlottesville Area Association of Realtor's President-Elect Greg Slater, in their roles as salesmen.  

But if this is a "news" article and not an advertisement, why isn't there additional, vital information included?  There's no local or national insight into the First Time Homebuyer's Tax Credit.

Here's What The DP missed:

SALES:  National real estate had its worst year in a decade--in 2008.   Locally, the Charlottesville Area followed this trend and had a terrible 2008--but the first three quarters of 2009 have had even lower sales than 2008.  Even with the Federal tax credit and historically low mortgage rates (kept that way by the Federal government) sales are way down.  The real story here is that despite sales being so low, and despite home prices increasing by 135% in the 10 year period ending 2007, prices haven't adjusted downward at the same pace as elsewhere.  Where's The DP coverage of this?

 LOCAL PRICES and "VALUES" WILL CONTINUE TO DECLINE: Due to low sales, lack of buyers, increasing foreclosures, plus Option ARMs resetting in the next couple of years, real estate prices will continue to decline in this area for the foreseeable future, according to the Virginia Housing Development Authority.  Housing  won't regain current "values" until 2023.  Using an $8k tax credit to buy a house that is going to continue losing value only makes sense if the purchaser is staying put for years.  Thus, that "starter home" isn't a springboard--it's the landing place.

THE TAX CREDIT INCREASES ASKING PRICES: According to a study by giant Goldman Sachs just reported in the WSJ, the First Time Homebuyer Tax Credit has increased asking prices by 5%, on a national average.

THE COST TO TAXPAYERS: The First Time Homebuyer Tax Credit, according to CalculatedRisk, costs taxpayers $43,000 per house sold. 

$1 BILLION PER MONTH: This is the price tag to continue this tax credit.  Business Insider offers more math, then calls this program Insane and Toxic.  

IRS FRAUD: as reported in the NYT. 

AND WHERE'S THE  REPORTING ON LOCAL OPPOSITION TO THE CONTINUATION OF THIS CREDIT? Why is the most active and most respected voice in local real estate missing from this feature?  Realtor/Blogger Jim Duncan has gone on record opposing the extension.

If this is a news article and not an advertisement, why isn't The DP covering any of these details and issues? 

The link, again:
Daily Progress:  Deadline for Homebuyer Tax Credit Looms

Wednesday, October 21, 2009

Boycott

After you're done reading this piece of sanity, be sure to click around the whole site, which is regularly ref'd and linked across financial cyberspace.

Virginia Unemployment Rises

The Commonwealth of Virginia's unemployment went higher in September 2009 to 6.7% from 6.6 in August, the Bureau of Labor Statistics reported.  In 2008, the figure was 4.1%.

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 20-year high.

Data for the MSA will be next released in one week, on October 28.

Related Reading:
DP on State Unemployment
BLS, Va Economy at a Glance
Current Unemployment in Cville Area
Mohawk Plant Closing

White House Skeptical On Renewing $8K Tax Credit for Homebuyers

Via Reuters.  For more on this, and additional links, visit CalculatedRisk.  For a local take on this bit of financial folly--every home sold during this program cost taxpayers $43K--follow the link here.

Tuesday, October 20, 2009

Mohawk Plant Closing

The massive Waynesboro installation has already had more than 100 layoffs.  Now 120 employees, many of whom were long-term, will lose jobs a week before Christmas.

Although the largest flooring producer in the world, the drop in new home construction and corresponding lack of carpet demand has challenged Mohawk, said Kemp Harr, publisher of Floor Focus Magazine.

The carpet market is down about 35 percent since its peak in 2005.

Read the rest at the DP here. 

Related Reading:
Current Unemployment in the Region
Map of Layoffs in Virginia

That's One Lucky Charlottesville Police Officer....

A local charitable organization has pledged $75K toward purchasing housing for Charlottesville's finest.

According to the DP, fewer than one dozen of the City's 117 officers live in the City. That's about to change, though.

The $75K will go a long way to help one lucky police officer!  

Consider:
  • Cville police officers have a starting salary of $35,000.   
  • A prudent buyer would spend only 4x annual salary on purchasing a home: $140K. 
  • The median price of a single family home in the City is $283,750 during the Third Quarter of 2009. 
  • The average price is $309K.
  • So with the $75K grant, one lucky officer can buy a house at $215K. 
  • That's the "charming Belmont cottage" at 900 sq ft.
Oh...wait...that's right, there are condos and townhomes for sale in the City, too.  Except that these have been declining in value even faster than single family homes lately as the real estate market corrects itself, and it would be imprudent to "invest" in a depreciating "asset"--

Well, it's the thought that counts.  Perhaps some more local charitable organizations and/or eminent residents will be motivated to match this grant and get more of the City's finest living inside the City limits.

Read the details here.

Friday, October 16, 2009

Foreclosures: Worst. Quarter. Ever.

Q3 2009 was a record breaker, despite the Federal Gov't's  Home Affordable Mortgage Program.  Only a few thousand of the HAMP mods are out of the trial period, however...so Q1 2010 could beat this quarter....

Wednesday, October 14, 2009

Dow Goes to 10,000 First Time in a Year

Yee.  Ha.

Click for larger image in new window, or go to www.dshort.com
 

CNN Money Puts Charlottesville on List of 50 Best Small Places to Launch a Business

Charlottesville may be a good place to launch a business--it just may not be a great place to stay in business.

Yes, it's another list: CNN Money's 50 Best Small Places to Launch a Business.

The resources definitely are here to launch a business.  Consider: 

There's plenty of commercial real estate available for office space and retail, and prices are negotiable. 

Local private sector business growth has ended--jobs are needed.

UVA, the largest employer, has a wage and hiring freeze in place--jobs are needed.

Unemployment is at a 20 year high here, nearly doubling in one year. 

Plenty of workers are highly educated and many are underemployed.  Those with PhD's and 4-year degrees have the highest unemployment:




The graph is from the Thomas Jefferson Partnership for Economic Development, in a presentation to the local Realtors' association this month.

The presentation also wondered:   

Is Charlottesville losing its middle class? 
Why is unemployment among African-Americans so high?   

Don't miss the whole thing at CAAR.  

So yes, this area definitely needs all the business help it can get. 

And hey, here's an opportunity.  Anybody want to take over this project?

Related Reading:

Monday, October 12, 2009

In the News

Check out "In the News" on the right side of the screen, beneath "Recent Comments" and "Recent Posts."  It has the latest news articles about the housing market.

Sunday, October 11, 2009

Trulia: Homesellers in US Reduce Asking Prices by $28.4 Billion

This blog has recently looked at properties with price reductions.  It's a nationwide trend, however.

Trulia, the RE website that has a "price reduced" widget in the left-hand menu, calculated the $28.4 Billion in price cuts this way:

[Using] data from brokers and agents, third-party providers and multiple-listing services. For the survey, it looked at homes for sale as of Oct. 1 -- about 3 million properties, excluding foreclosed homes and undeveloped land -- and calculated how many had previously been listed for a higher price. Some were lowered more than once.

Pete Flint, CEO of Trulia, noted, There’s a “significant inventory” of homes for sale. “You’re still going to see further price declines before the market stabilizes in 2010.”

(bolding BB)

Read the Reuters article here.

Some Price Reduced Posts:

Price Reduced.  Again.  And Again.  And Again....  Additional properties were added in Comments.

1463 Monterey, Charlottesville VA

935 Monticello Avenue, Belmont, Charlottesville VA

1320 Kenwood Lane, Greenbrier, Charlottesville VA

1503 Oxford Road, Rose Hill, Charlottesville VA

2930 Milton Village Lane, Milton Village, VA

Q3 Dismal Sales, Falling Prices - Graph

Thursday, October 8, 2009

1712 Mattox Court - Price Reduced - $775K to $569.9K, Now Asking Less Than 2007 Purchase Price

1712 Mattox Court, MLS 468737, 5 beds, 3 1/2 baths, 4,400 square feet.  $569.9K.

Update 10/9: The property has been listed several times, including December 08, for $775K, MLS 458384.

From the description current description: "DEAL, Huge Price Reduction!  Priced $33,000 below assessment and less than sellers paid for it in 2007!"

The August 2009 price was $615K. And yup, today's asking price is $100 Dollars less than what was paid in 2007.     Guess somebody's been reading up on 2009's valuations?

Click for larger image in new window.  Image courtesy/copyright Trulia.


Related Reading:
Q3 Dismal Sales, Falling Prices
1463 Monterey, Asking Price Less Than What Seller Paid
1627 Greenleaf Lane, Charlottesville VA
1320 Kenwood Lane, Charlottesville VA
825 Belvedere Blvd, Albemarle, VA
1503 Oxford Road, Charlottesville VA

1627 Greenleaf Lane, Charlottesville: Confusing Listing for $250K House

1627 Greenleaf Lane in Charlottesville is a new listing.  MLS 470364. $250K for 3 bedrooms, 2 baths, 1500 square feet.

Doesn't the listing seem a bit contradictory? 

"PRICED $120,000 BELOW ASSESSMENT!"  (Caps on listing.)  This might give the casual looker the idea that the City assessment is an appraisal.  The fact?  The assessment figure is what recent area buyers  have paid for comparable houses. Is this house actually comparable to those that have sold for $370 in the past year?  (IOHO, if this owner was actually paying taxes on $370K, well, they shoulda appealed, shouldn't they?(Oops--guess new owner will have to.) 

But that this house isn't worth the $320K Assessment is recognized in the next line: 203K LOAN AVAILABLE (PURCHASE/RENOVATE LOAN).

203K loans are available through the FHA.

There are no interior pictures for this house, which has had the same owner for nearly 40 years.  In all likelihood, "renovations" will include a new kitchen, new bathrooms, new HVAC, new paint, refinished floors....Maybe these guys will buy it.

Hey, if it were Belmont, the price would be $100K more for a reno, before it was reduced to sell....

Click for larger image in new window.


Image courtesy/copyright CAAR.

Related Reading:

825 Belvedere Blvd - Haven't Seen This Lately: A Listing With Pictures of the House Wrapped in Tyvek

825 Belvedere Boulevard, Belvedere Development in Albemarle County, MLS 470444.  $399,100.

There are currently 738 single family homes listed for sale in Albemarle County.


Yup, Belvedere is the one with the slow build-out, some of whose principles faced mass forclosures at this time last year.

Reading:
"Lien On Me" - Courtney Stuart, The Hook 
Home at Belvedere - A blog tracking the experience of living in the stalled development 
Regional Builder Faces Mass Foreclosure 
Even More Foreclosures for Spence and Goldschmidt

Is Stonehaus Seeking to Sell Belvedere Stake?



Image via/copyright CAAR.

1320 Kenwood: Price Reduced $300K. How Do You Put a Price on a Labor of Love?

1320 Kenwood Lane, Charlottesville, VA 22901 - $799K from $1.1Million
4 bedroom, 2 bath, 3170 square feet

An article about 1320 Kenwood Lane appeared in the September issue of C-VILLE's Abode.  In the article, the owners are said to want to sell so they can relocate to California.

Great news! At this point, California's housing prices have collapsed so much that these folks will get more bang for their buck there than here.  Median prices have fallen 50% from 2007 in Southern California.  Whee!  

This corruguated steel and bright blue modernist creation sits in the Greenbrier neighborhood, among ranchers that sell in the mid-200's to mid-300's.  It's a central location for the City, but as somebody mentioned over the summer,  Greenbrier is not a million dollar neighborhood....
To read the Abode article, Google "September 2009: Strong as Steel" by Erika Howsare (can't get the link to translate here). The Trulia listing is here; it will expire upon sale of the house.

A pic of house, courtesy/cophyright CAAR:
Click for larger image in new window.


The details, via/copyright Trulia.
Click for larger image in new window.

 

Related Reading:

Q3 2009: Dismal Sales and Falling Prices
Higher Priced Homes Sell at Snail's Pace
Case-Shiller Home Price Graph

1503 Oxford Road, Charlottesville: Price Reduced $100K to $475K

1503 Oxford Road in Charlottesville is a new listing has been relisted with a new Realtor/Broker, and has had a price change from $569,900 in April to $475,000 in October 2009.  (See images, below.)


1503 Oxford last sold in 1986 for $131K.  It is appraised at $375K.
3 bedrooms, 2.5 baths, 1536 sq feet plus 700sq ft apartment.

About 100 properties' listings expired at the beginning of September; about 50 expired at the beginning of October; a number of these properties are showing up, or will show up, as Relistings.

A buyer's agent will show his/her client all the recent listings for a particular property.

What relisting does, though, no matter what the reason for it, is change statistics.  Say this house sells in 45 days for $405,000.  If the 45 days, instead of the +/- 250 days on the market, will be used to calculate "Average Days on Market."  This wouldn't be accurate.

The theoretical selling price of $405 is 71% of $569, but would be 85% of $475K.  Depending upon which price is used as "list price" drastically changes the calculation of "percentage difference in sales v. listing" price data that appear on all local real estate sales updates provided by professional agents.  And it's an important figure for both buyers and sellers when listing or making an offer.


There are currently +/- 203 single family homes for sale in the City of Charlottesville.  +/- 29 properties available in the City have asking prices of $390-499K.


April's listing for 1503 Oxford.  Click for larger image in new window.



October's listing.  Click for larger image in new window.




Images courtesy of /copyright CAAR.

Related reading:
Dismal Q3 2009 Sales, And Prices Keep Falling
10 Reasong There Aren's More "Move-Up Buyers" in This Area  
Snapshot: These Listings Indicate Lack of Move-Up Buyers

Monday, October 5, 2009

Charlottesville Area Real Estate Update,Third Quarter 2009: Dismal Sales. The Good News For Buyers? Prices Keep Falling.

 Area sales are at the decade low.

Even with the up-to-$8k tax credit and the annual seasonal uptick in sales plus the majority of transactions occuring at the "low" "First Time Homebuyer" price point of under $300K, as well as the historically low interest rates, sales are sputtering.  And according to minds bigger than this blog's, apparently this is not the area's bottom.

The graph includes all Central Virginia sales 2003-2009.  The blue line on the bottom is 2009.  

More details will f0llow for specific areas and types of sales.  Click on graph for larger image.




Sunday, October 4, 2009

Glenmore's Michael Comer Slated for Grand Jury in December. What Are the Elements of Embezzlement?

The embezzlement case of Michael Comer, the Ex-etc. of Glenmore, will be handed over to a Grand Jury, which will convene December 7, 2009, 9:30 a.m.

Will this December 7 be another day that will live in infamy? Or will the Grand Jury decide that there's not enough evidence for the case to go to trial?

There are clearly monies missing from the Glenmore Homeowner's Association.  (You may link to the Glenmore Audit by scrolling to the bottom of this post.)  But whether this is the result of criminal intent and conduct, or just poorly handled funds--yes, this is the $666+K question.

The basic elements of embezzlement are as follows (from the common law):

  • Property/money must belong to an entity or person other than the accused
  • Property must be "converted" before the accused is in possession of it (for instance, a check must be cashed or a deposit made)
  • Accused is typically in a position of trust so that the money is in possession due to some legitimate duty
  • The accused must have an intent to defraud the rightful owner at the time of the "conversion" (for instance, a deposit or check cashing)

A good lawyer will go to town, so to speak, with elements two and four.  If the Grand Jury decides there is enough evidence for the charges to proceed to trial, Michael Comer will have a very good lawyer.

Related Reading: 
NBC29 Video (Thanks, commenter) 
Comer's Property Asking Prices Reduced
Glenmore Assoc. Reaches Out of Court Settlement to Pay Back Alleged Embezzlement
Comer: The Unanswered Questions 
Statement from Kandi Kessler Comer 
The Glenmore Audit

1463 Monterey Drive: This Seller Really Wants to Sell

1463 Monterey Drive is pulling out the stops in trying to find a buyer:

From the announcement  for today's Open House:
  • Major Price Reduction!
  • Now Only $245,900!
  • Thousands Below 2009 Assessment!
  • Seller Motivated, And Has Reduced The Price By $24,000.
  • This House Has Many Improvement In The Last Four Years, And Is Priced Almost $20,000 Below 2005 Purchase Price.
  • Priced at +/- $100 Finished Square Foot.
This seller will have more and more company in the coming months in terms of price reductions and reverting to prices less than what was paid at the Bubble Peak.

Image below courtesy of and copyright CAAR.



Click on image for larger pic in new window.

2008 Census: Housing is Getting Even Less Affordable

Yup, the details come from USA Today, which carefully crafts graphs and stories that 7th Graders will understand.  The article covers the costs of both buying and renting.


Locally, wages and median income have not kept pace with the 100-300% increase in asking/selling prices seen in this area since the year 2000.  In many instances, prices look like its 2006 around here; in other instances, are coming down.  This is because supply continues to exceed demand.  Sales are low even with a peak in seasonal demand in July and August PLUS the upto$8k tax cred.  Sales were still double digits % lower than 2008 during the summer, except in the category of attached homes in Albemarle County during July and August.


From the USAT article:
  • More Americans found housing unaffordable last year, even though home prices across the U.S. have taken a major fall. 
  • The number of renters increased, while the number of homeowners declined.
  • Reflecting the rapid pace of foreclosures, the number of homeowners dropped by about 142,000. 
  • From 2007 to 2008 the homeownership rate fell more than half a percentage point, to 66.6% — the lowest level since 2002
  • Many of those former homeowners have become renters, a segment feeling the brunt of steep housing costs. 
  • Overall, the number of renters swelled by nearly 900,000 in 2008 compared with 2007. 
  • More than 40 million spent 30% or more of their household income on housing costs, 600,000 more than in 2007.
Read the article in its entirety, and check out the table of MSAs (Charlottesville is not included--toosmall--but Richmond appears) here.

Thursday, October 1, 2009

Glenmore's Michael Comer Due in Court Today

Barring another continuance,  Glenmore's accused embezzler ex-Country Club President and ex-Homeowner's Assoc. Treasurer Michael Comer  is scheduled for a court appearance in Albemarle County General District Court at 9:30 a.m.

Properties for Sale:

Primary Residence: 2930 Milton Village Lane is listed at $1,348,000  $998,000, an asking price of less than what Comer paid.

Investment Properties:  MLS 467873 - $425,000 - $379,000 - $325,000 3803 Richmond Road, Keswick.  The house has 2 beds and 2 baths, 2081 sq. feet on 2 acres, built 1987. The house was purchased in '08 for $250,000.  The house in Wintergreen, 54 Firtree Road, MLS 467879, remains at $318,000.

Local news will be focussed elsewhere today.

Related:
Glenmore Assoc. Reaches Agreement to Pay Back Funds
The Glenmore Audit