Thursday, February 25, 2010

"Keepers" Price Reduced Nearly $1M - Now Asking $9,950,000

1000 Ivy Creek Drive
Asking: $10,825,000  $9,950,000
MLS #463641

It's not a 52% price reduction a la Patricia Kluge's Albemarle House--it's not even 10%.  This contemporary house, ironically called "Keepers," is said to be owned by local hero Dave Matthews. 

The 3 bedroom, 3 bath 4,300 sq ft  on 64 acres near Farmington joins hundreds of properties in the Charlottesville Albemarle area that have recently received price reductions (select "price reduced" when you click here.)

Price reduced: $875k or 8.1%
Owned by:  An LLC called Two Stumbling Brandos
Distinction: Near Farmington.  Private Stupa.

The asking price remains,  according to some minds, optimistic: the selling price may be no more than the $6 Million 2004 purchase price.  Asking price and actual selling price remain disconnected in this area, however, at all price points.

Above image copyright CAAR.
Below, via Trulia (click for larger images in new windows)

Monday, February 22, 2010

Patricia Kluge's Albemarle House: Price Reduced By $52 Million

Once priced for an alternate universe at $100M, after just 115 days on the market, Patricia Kluge's Albemarle asking price falls to $48 Million. 

Via Trulia:
The "Asking details:"

The "Home Facts:"
Related Reading:
Patricia Kluge Property Up for Foreclosure Auction and Other News in the Charlottesville Albemarle Downturn

Recent News in the Charlottesville Albemarle Economic and Housing Downturn - February 2010

Last week, this blog recapped UVA, Charlottesville, Albemarle, and VDOT budget woes.  This week it's all about Patricia Kluge, Belvedere (what's that time frame and price point?), Embezzlement, Hunger (widespread), The Landmark Hotel (which will never be completed), Governor McDonnell, Embezzlement, and Biscuit Run (which is a far bigger story than anybody has reported).

1.  Real Estate Default and Foreclosure Auction: Vineyard Estates LLC, et al, has a property scheduled for foreclosure auction, which makes The Hook wonder if Patricia Kluge "has cash flow woes."  Kluge's own cash flow has nothing to do with Vineyard Estates, which is why the LLC was created--the Limited Liability Corporation is responsible for the debt, not the person who created the corporation.

Kluge, and her step-daughter spokesperson Kristin Moses Murry, however, are not using any local, regional, or national economic forecasts for short- or long-term recovery in both offering Albemarle House for $100M,  and for stating re: Vineyard Estates that they are "pursuing discussions with stronger partners who both understand the potential of these 24 lots and have the resources to help us realize it.”  Is the best "potential" for those lots developing McMansions, or for growing more grapes?

UPDATE 1  Feb. 22 Frank Hardy Realtors suing Kluge/Moses for breach of contract for listings. 
UPDATE 2 Feb. 22 9.30pm Albemarle House Asking Price Reduced by $52 Million

2. Hunger: Or how about turning those Vineyard Estates subdivision lots over to, say, Tom's Garden, to feed the working poor and impoverished?  The Thomas Jefferson and Blue Ridge Area Food Banks have seen huge increases in needs for their food and services: From The DP: Michael McKee, of the Blue Ridge bank, said "We have watched the numbers increase over time during the past decade and all indications are that there is no likelihood of decreasing unemployment or a large increase in the number of jobs available anytime soon,' McKee said. “...we’re looking at a long-term trend.” 

3.  "For Biscuit Run, What's In an Appraisal?" C-VILLE wonders.  Is C-Ville, or any other media outlet, looking in the right place for how Forest Lodge LLC, Hunter Craig, Boyd Tinsley, et al, actually recouped losses? 

4.  An apartment complex at Belvedere: it's been no secret that Hauser Homes / Stonehaus Developers have had money problems.  A solution?  Sell 16 acres to Cathcart Properties to make a "luxury apartment complex."

5.  Another Homeowner's Association Treasurer accused of Embezzlement: it's taken a few months, but the Mill Creek association thinks the number has jumped from $10k to $93k.   Less than Glenmore's Michael Comer, but still enough for prison time.  Kevin O'Connor is expected to plead guilty to some charge in May.

6.  Parts of The Landmark Hotel litigation: are ordered by Judge Edward Hogshire to arbitration.  Nevertheless, The Landmark Hotel will not be completed in 2010.  Or 2011.  Or ever.  The current wrangling is not to see that the hotel gets built, it's to see who can recoup more money, Minor or Danielson.  Recently, Halsey Minor once again got his farm out of foreclosure auction--these default filings have nothing to do with the hotel, nor do they indicate his fortune is gone.  (His fortune may be gone, sure, but cash flow management is a different animal.) 

7.  Albemarle Schools Face Massive Cuts: Due to spending and the ongoing housing downturn which is drying up property tax revenue, the budget's got to shrink: more than 40 school staff positions will be cut in Albemarle County, including many teachers. Students’ class schedules will abruptly shift. And class sizes will increase.  Read.

8.  Governor McDonnell Wants to Axe Education, too: nearly One Billion dollars, and 500 statewide layoffs, many in mental health.  Read.

9.  Cuts to City Schools: If C'ville loses state funding,  more than $1M in cuts will be necessary.  Read.

It's a great time to buy a house if only so you can hide away from the wider deterioration of western civ.

Friday, February 19, 2010

The White House Fact Sheet: Obama Admin Announces A Program for "Hardest Hit Housing Markets"

It's just a drop in the bucket, but it might save a few folks: An additional $1.5 Billion in taxpayer funds will go toward measures that will be announced today, Friday, February 19.  Below is the Fact Sheet from the White House via the office of the Press Secretary.  The funds will be channeled to state and local Housing Finance Agencies, and characterized as helping "families facing urgent problems" in states with high unemployment and "where home prices have fallen the furthest."
Mortgage delinquencies are at an all-time high,there will be more than 3 Million foreclosures this year , and because they're cheaper than foreclosures, short sales are increasing. And while currently one in four mortgages is underwater, up to 50% of all mortgageholders will be underwater by 2011. 

The housing crisis isn't getting any better, nor are prices "stabilizing" (as claimed in sentence 3 of press release, below) so the Obama Admin seems to feel it has no choice but to make further effor at rescue.

The current mortgage modification Home Affordable Mortgage Program or HAMP , has an estimated cost of $75 Billion and is supposed to help up to 4 Million borrowers by 2012. Currently, about 116,000 mortgages have been permanently modified , and the program will likely go nowhere near its goal. Meanwhile, there are in place unlegislated billions in bailouts for giant housing losers Fannie Mae and Freddie Mac what's a billion more?


President Obama to Announce Funding to Help Address Urgent Problems Facing Families in States with High Unemployment and Where Home Prices Have Fallen the Furthest

Today, President Obama will announce funding for innovative measures to help families in the states that have been hit the hardest by the aftermath of the housing bubble.  In each of these states, the average price for all homeowners in the state has fallen more than 20% from the peak.  Home prices across the country are beginning to stabilize since the Administration’s economic policies began to take effect almost a year ago.  But the legacy of price declines, together with the effects of high unemployment, means that many working and middle-class families in these especially hard-hit areas are facing serious challenges, in many cases beyond what their families’ resources can handle.

President Obama recognizes the challenges facing our families in the nation’s housing markets, where local conditions vary considerably. The Administration is setting up an innovation fund to expand the capacity of housing finance and similar agencies in the hardest-hit areas, so that those states and localities can further respond to the most pressing problems in their communities.

Help for the Hardest-Hit Housing Markets (4HM)

$1.5 Billion to Work with State Housing Agencies to Innovate and Help Address the Problems Facing the Hardest-Hit Housing Markets
o   There will be a formula for allocating funding among eligible states that will be based on home price declines and unemployment.
o   HFAs must have program design approved by Treasury.
o   Programs may include:
§  Measures for unemployed homeowners;
§  Programs to assist  borrowers owing more than their home is now worth;
§  Programs that help address challenges arising from second mortgages; or
§  Other programs encouraging sustainable and affordable homeownership.

Accountability and Transparency for these Housing Programs
o   All funded program designs posted online.
o   Accountability for results – program effectiveness measured and results published online.

The program will apply to states that have suffered an average home price drop of over 20% from the peak.  State and local Housing Finance Agencies (HFAs) in each state are already familiar with the urgent challenges facing their communities and have demonstrated the ability to address these challenges.  For that reason, we will work with these HFAs to expand their capacity to help address these challenges, with $1.5 billion from the funds set aside for housing under the Emergency Economic Stabilization Act of 2008.

The HFAs will determine the priorities facing their local markets.  The plans will be under strict transparency and accountability rules.  The increase in HFA resources for these areas should provide meaningful support for families in these markets, when combined with the numerous other steps the administration has taken to address housing markets.

Funds can be used for innovation to take steps to address difficult, locally-important remaining challenges for the hardest-hit housing markets, including unemployed borrowers, underwater borrowers, and second liens.

Under this program, HFAs can submit program designs to Treasury.  To be eligible for funding, HFA program designs must meet program goals of providing meaningful support for housing in the hardest-hit markets.  Programs must meet funding requirements under EESA.  These include that the recipient of funds must be an eligible financial institution and that the funds must be used to pay for mortgage modifications or for other permitted uses under EESA.  Treasury will announce maximum state level allocations in the next two weeks, along with rules governing the submission of program designs by HFAs, and provide a period thereafter for HFAs to submit their program designs in order to receive funding. 

Illustrations of the Sorts of Programs that May be Funded in the States

Housing markets vary considerably from state to state, and often within a single state.  Housing Finance Agencies are intimately engaged already in their local housing markets, and will play the lead role in determining what sorts of programs are most appropriate to local conditions.  Three sorts of problems that may be addressed with funding are unemployed borrowers, underwater borrowers, and second liens:

1. Unemployed borrowers.  Since the recession began in 2008, unemployment has hit many families who own homes.  In previous times, when house prices were rising, families with unemployment could often sell their homes for more than they had paid, using the proceeds to tide them over. 

Today, by contrast, families in states where prices have dropped more than 20% often find themselves owing more than the house is worth in the current market.  Such homes are often difficult to sell, and families with unemployment often can’t pay the current mortgage and may not have enough income to qualify for a modification.

In such circumstances, one use of funds would be for HFAs to begin programs to help unemployed homeowners until they have secured a new job.  HFAs can consider a variety of programs to help unemployed borrowers.

2. Underwater borrowersFor states with more than 20% home price declines, a large portion of homeowners are “underwater” -- they owe more than the house is worth in the current market.  Such borrowers often find it difficult to sell their homes -- lenders may not agree to a sale that fails to pay back a mortgage in full.  HFAs may experiment with programs that would assist borrowers to negotiate with lenders to write down mortgages.

3. Second liens.  An important problem can arise when borrowers have a home equity line of credit or other second mortgage on their home.  In these instances, the first mortgage lender may be willing to adjust to the home price decline by modifying the loan.

Difficulties can emerge, however, in coordinating between the first and second mortgage lender. To smooth this coordination problem, and help assure that homeowners get an overall modification that works best, funds can be used to pay incentives to the second mortgage holders, addressing this potential obstacle to re-setting the market.

Thursday, February 18, 2010

UVA On Biggest Loser List of University Endowments

Missed the Top 20! Beat out by Harvard, Yale, Stanford, and more for FYs 2008-2009.  Out of 864, for a list nobody wants to be on.  But it kept UVA out of the Business Insider Worst Managed University Endowments list, and other national media.

See: National Association of College and University Business Officers site here. 
UVA at #22, "U.S. and Canadian Institutions Listed by Fiscal Year 2009 Endowment Market Value and Percentage Change in Endowment Market Value from FY 2008 to FY 2009" PDF here.

Just the other day, outgoing Prez John Casteen warned 2010 would be when Great Recession kicked in.

Tuesday, February 16, 2010

UPDATED - The IndyMac / OneWest Saga Continues With Rebuttal to FDIC's Rebuttal

UPDATE 2 Monday Feb 16

Not so fast, FDIC say the guys over at ThinkBigWorkSmall...we're still right.  And they've revised their video to address the FDIC's rebuttal.  SEE HERE. 

They've also included links in support of their statements, including
ZeroHedge's Tyler Durden here. 
NYTimes' Gretchen Morgenson, Beyond the Bold Faced Names in the IndyMac Deal 
All Denver Real Estate, FDIC Pays Banks to Foreclose, Anatomy of a Government-Abetted Fraud: Why IndyMac OneWest Always Forecloses 
Brian and Frank on Twitter: @TBWSD 

UPDATE 1 Friday Feb 12:  FDIC claims the video is "blatantly false" and CalculatedRISK has details on loss issues.  (Nobody's saying that Goldman Sachs doesn't rule the world, however ;0o )

Original Post appeared on Wednesday, Feb 10:

Hey, grab a stiff drink and try not to lose your lunch as you watch the video (linked below) about the bailout of IndyMac Bank, which was seized by the FDIC in June 2008 because it was losing so much money on defaulting mortgages. 

The video has a couple of take-aways: it's often more profitable for certain banks to avoid mortgage modification, and Goldman Sachs controls the financial world has has the Obama administration by the balls is an agent of the Devil makes a lot of $$$$$.

Watch Here.  BTW, the video doesn't have an embeddable link and is getting so much traffic that periodically the server is shuts down.  This blog received the link from a buyer, a Realtor, a mortgage guy, and a "market watcher."

Related Reading 

Monday, February 15, 2010

Money Woes, Budget Cuts Take Center Stage in Charlottesville Albemarle Area

The week of February 8 brought a snowstorm...and further reiteration of budget crises at UVA, in City and County Schools, plus a decline in sales tax revenue,  and the news that VDOT has run out of money for snow removal.

1.  Albemarle County Schools Face Up to $13M in budget cuts.  There is a  Public Hearing Monday February 15, Albemarle County Office Building, 6:30 pm to discuss cutting teachers, larger class sizes, cutting programs, pay-for-play, etc.  See this article about "Albemarle County Schools Face "Crippling Cuts."

The irony is that poor schools lower property values...but property taxes will need to be raised to ensure better schools.

UPDATE 1 4pm: See the post on this topic at RealCentralVA. 
UPDATE 2 Feb. 15, 1am:
The Albemarle Public Hearing focusses on higher RE Taxes.
Teacher Cuts possible in Cville Schools.

2. Albemarle County is in so much trouble that officials are trying to get money away from Charlottesville, challenging the revenue sharing agreement.

3.  UVA, which has already had wage and hiring freezes, will have budget woes into the future. In his final "State of the University" address, outgoing President John Casteen noted 2012 is the year the Recession will be felt.  According to The DP,

....some of the budget cuts the university has taken — there have been a slew because the governor is required to balance the budget every quarter — have been softened by federal stimulus money, he said. By accepting the stimulus funding for the university, the state has locked itself in to not cutting certain other funding, and the stimulus funds have also been a financial pick-me-up, Casteen said.

But the stimulus funds end by 2012, he warned.  “2012 is the year in which the real cost of the recession will hit everyone,” Casteen said.

Read here.

4.  Retail Sales plummeted in Charlottesville and Albemarle County during 2009, according to the Weldon Cooper Center for Public Service at the University of Virginia.  From The DP:

The figures, taken from Virginia Department of Taxation sales tax data, show shoppers spent 9 percent less in Albemarle and 7.82 percent less in Charlottesville. In the same period, shoppers spent 14.47 percent more in Greene County and about 12 percent more in Louisa County.

Read here.

5. VDOT is out of snow money, and will have to use its maintenance fund if the Commonwealth needs any more snow removal this year. The agency has plowed through its $79 million budget and an additional $25 million in a reserve fund.  VDOT applied for $50 million in federal assistance after the December snowstorm.
Read here. 

Eh, fear not.  There's a miniscule chance that economics will suddenly improve, but you might want to hang your hat on it.

Thursday, February 4, 2010

Michael Comer Residence Sells For 32% Less Than Original Asking Price

Glenmore's ex-Country Club President, ex-Homeowner's Association Treasurer, Michael Comer, has sold his primary residence, one of the four properties that he or his family put up for sale after he went missing in July, 2009.  Just a couple days ago the lawyer of the accused embezzler announced Comer will plead guilty at an April 13 court date.

The details:
2930 Milton Village Lane
4 beds, 4.5 baths, 4,000 sq ft, 5 acres

*July Asking Price: $1,348,000.00
*Selling Price: $925,000.00
*Difference of $423,000.00 or 32%

*The Comer-Kesslers paid $1,030,000.00 in 2005 
*Selling price = $105,000.00 or 10% less than what they paid  

2005 Assessment: $1,022,800.00 
2010 Assessment: $955,500.00 
DOM: 130  
More  numbers:

Original listing: $1,348,000.00 - Week of July 20, (ie, 3 weeks after disappearance) handled by Real Estate III, where Comer's brother-in-law Jeff Gaffney is CEO.   This was an expected profit of $317k, in an area that's had declining sales since 2006, and at a price point that is seeing extremely low sales.  The asking price was lowered $173,000 on September 5 to $1,175,000.00.  The asking price was lowered another $177,000 11 days later on September 16, to $998,000.  The final asking price was $32,800 less than what the Comer-Kesslers paid in 2005: $1,030,000.00.

IOHO: The original asking price had nothing to do with the realities of the Charlottesville area market.  Conversely, the lower selling price had nothing to do with the fact that the house was connected to "criminal activity:" a violent crime wasn't committed on the property.  The final price reflected the fact that the sellers were "motivated"--trying to get on with their lives, despite taking $$$ loss.  The selling price reflects a market where property values are adjusting downward in response to price inflation, large inventory, few buyers, and the deflation of the largest housing bubble in history.

Monday, February 1, 2010

Part I of Glenmore Scandal Ending as Michael Comer Set to Plead Guilty

Glenmore's ex-Country Club president / ex-Homeowner's Association Treasurer Michael Comer appeared in Albemarle County Circuit Court today, where his attorney informed the Court Comer intends to plead guilty on Tuesday, April 13.

This will close Part I of this embezzlement scandal, which has humiliated the man's family and professional contacts (some of whom are one and the same), enraged Glenmore homeowners, and attracted wide notice.  Readers who have followed the coverage on this blog will wonder: is there a Part II? (or III or IV?)  Will any local, state, or federal entities or authorities investigate or pursue additional individuals, entities, or concerns, in re (but not necessarily limited to) issues of asset management and embezzlement, property taxes or income taxes, in either civil or criminal matters?

The Albemarle County Circuit Court case status: (click for larger image in new window)

Today's coverage: The Newsplex, The DP