Friday, November 12, 2010

Virginia Housing Development Authority Update on Charlottesville Area Real Estate Market Conditions and Trends

Barry Merchant, the creator of the following data sets, is a Senior Analyst with the VHDA.  This material was presented to the Charlottesville Area Association of Realtors.  The November 11, 2010  update is posted here courtesy of RealCentralVA, and the February, 2010 version is included, below, for the sake of comparison.  

Some highlights:

1. Slide 5: The shocking expected plunge in Third Quarter home sales, on tax credit expiration, wipes out any hope for continued sales gains.  Supply far exceeds demand. 
2. Slide 17: "...the foreclosure problem is far from over." Locally and nationally. 
3. Slide 20: "...the impact of distressed inventory could extend well beyond 2012."  "Distressed" as in foreclosures, short sales, and strategic defaults. 
4. Slide 25: "Increased affordability is still needed in Charlottesville to sustain increased sales."  Charlottesville MSA is most expensive "downstate" area, rivals Alexandria and Arlington in Median Price-to-Income ratio for home purchase. 
5. Slide 9: Anybody connected to MJH, UVA, and city/county/state workers, plus the housing industry, retail, restaurants, and other services, will likely see tough times in 2011-12. (Bubble Blog interpretation of the data.) 
6.  Slide 30:  Be careful of catching a falling sword.  Prices will continue declining for years, and mortgage rates will remain low for the foreseeable future.  Folks may find it necessary to buy a house, but it's not an investment.  (Again, that's the Bubble Blog interpretation).
Barry Merchant's Presentation to Charlottesville Area Association of Realtors - 11 November 2010


VHDA Presentation, Feberuary, 2010
Review of Regional Market Conditions and Trends

31 comments:

Anonymous said...

Sorry, I've lost the thread for venting about current listings.

Another new one on the mycaar inspiring morning headbanging:

http://www.mycaar.com/(jvklxt45zyf4qj45m0qdm355)/propertyDetails.aspx?mls=482977

In the "convenient" Forest Lakes, 11 years old, vinyl sided, half of alleged living space in allegedly finished basement. County assessment $342K, asking "$524,500." So coy. Cause that last $500 would really have put it over the top.

Humpty said...

I have to say it's quite amazing how the crappiest houses in CVille/Albemarle are asking numbers that 45 mins away can't command 30% of the asking prices for similar product. I have had brokers give me reasons from, "this is Charlottesville" as if it's St. Tropez or the "Hamptons" to "it's the way the stars are aligned that makes CVille special!!!!"

LOL just laughing and waiting.....I have to say the Realtors are not as arrogant as they were last year. reality setting in? perhaps!

Montpellier said...

That is a ridiculous price...somebody is waaay under water.

Anonymous said...

There seems to be a huge gap between what houses can sell for, and the current cost of constructing them. What is the explanation for this and is it sustainable? How can everything be so expensive when nobody has any money to spend?

Anonymous said...

It's better for everybody if we just pretend that that's not a valid question.

It's also to Realtors' advantage if they pretend that this VHDA stuff just doesn't exist.

Play dumb and maybe it won't be true.

Anonymous said...

Flip: 402 Allen Drive Asking $278k

Problem is, this isn't a neighborhood at that price point ANY MORE imo

http://mycaar.com/%28ew0a5h55ku1pwoqvicbihf55%29/propertyDetails.aspx?mls=483038

Bought foreclosure in march 2010 for $136k

Anonymous said...

Anonymous @ 9:14: This is totally the case. Some friends of ours built a custom house last year--not 100% shishi, but hardwoods throughout, Hardiplank exterior, 9+ foot ceilings, etc. As I understand it they did the whole thing, including clearing and a "green" septic system, in Western Albemarle, for about $110/sq. foot. This does not include the land cost and that is probably the deal-breaker, but it did make us think again about the numbers we see as askings per square foot in the same area--it is totally insane, totally not supportable.

not henry james river said...

@5:08pm What you say: which is why there are so few sales here and why there will be many more attempted short sales that are unsuccessful and then will become foreclosures

craigger said...

Anonymous,

Would you mind sharing the name of the builder that completed your friends project for $110/sqft?

Thanks,
Craigger

C'ville Bubble Blog said...

anonymous, if you don't want to post that in blog comments, you can send it to the blog email address, and craigger can write in for the info:

real DOT cville AT gmail DOT com

Reality said...

DIA/NGIC isn't saving the market

http://www.realcentralva.com/2010/11/19/dia-growing-more/#comment-31158

Anonymous said...

1527 Dairy Rd - $1,075,000 I WANT TO LIVE IN A WORLD WHERE A BRICK RANCHER SELLS FOR THE May 2009 TAX ASSESSMENT

http://mycaar.com/(05us4pbuakpwngqld3hfjxj2)/propertyDetails.aspx?mls=482975

Humpty said...

1527 Dairy Rd - $1,075,000 - I saw that listing the other day and couldn't believe the difference between the description and the photos. The realtor, Punkie, was smoking something very strong when she wrote it. In her defense it does have 1.75 acres, but still the asking is a joke given the economic times, the local earning/rental rates, and the condition of the house.

Anonymous said...

don't knock punkie. everybody knows realtors dont set prices.

Humpty said...

"don't knock punkie. everybody knows realtors dont set prices." I always thought the market is the final arbiter of prices. Realtors look at "comparables" and most recently "Tax assessments. The "comps" approach can be quite reliable when the statistics are very current and plentiful. In this market comps are pretty useless and inaccurate. Actually, the very best test for property valuations would be unadulterated "auctions". So let's not blame or pick on Punkie. She's just doing what all/most Realtors are doing. I'll be shocked if that property sells for $600k in the next 18 months.

Anonymous said...

Humpty, I wasn't serious. Punkie either DID set the price, OR she agreed that this house should be listed at the tax assessment. Either scenario certainly deserves a knock. A wake up call. A big laugh.

Too bad for the owner.

Anonymous said...

I talked to a homeowner that has their home listed for sale. The house is listed at 40% more than their realtor believes it would sell for. The OWNER set the price, not the realtor. The realtor knows they are not going to get a sale, I guess they think this is just advertising for them. Why such a high price? Because that's what they owe, and attempting/failing to sell is just to try and gain leverage w/ the bank for a principal reduction before defaulting.

Humpty said...

November 22, 2010 11:38 PM
Anonymous said... Sorry for misunderstanding! It's really a big laugh.

Humpty said...

"I talked to a homeowner that has their home listed for sale. The house is listed at 40% more than their realtor believes it would sell for. The OWNER set the price,..."

Who is fooling whom? What's the point of listing a home 40% above market? Is the Realtor hoping that the homeowner will eventually see the light? Is that what Realtors do? If the mortgage amount is the owners bottom line then they will never see the light unless they have to sell due to other circumstances.

John Doe said...

11:18pm, do you mean "mortgage mod," not prin reduction? What banks are doing prin reductions, and can actually be "leveraged" into them?

Why isn't the owner going for a Short Sale? Or for that matter, a strategic default?

Re: Rugby Road / Dairy Road area, a lot of houses have been listed for sale, and several have failed to sell, in the past couple of years. Let's not forget that the market was much better even with higher interest rates in 2009 than 2010.

Examples:
1332 Rugby Road Spring '08 Asking $700k, sold $525k - seller was a Realtor - 75% of asking

1325 Rugby Road - Asking $1.6M, closed for $1.3M Dec 2008 - 82% of asking

1432 Rugby - Asked $600k, sold $465k 2008, 74% of asking

1726 Dairy Road - Asked $690k - Sold $650k

Then there's the ones that haven't/didn't change hands

1215 Rugby Road, Asking $715k, just reduced 9%, 65k, to $650k

1329 Rugby Road - Asking $1.2M, then on and off market at $995k since March 2007. Also was a rental for $2,600

1705 Rugby Circle - Asking $695k - No longer on market

The first 2 examples are here:
http://realcville.blogspot.com/2009/02/rugby-road-asking-v-selling-prices.html

AliG said...

The property at 1329 Rugby Road can be purchased for $995,000 plus closing costs, plus insurance, plus property taxes, or you can rent it for $2000 (down from $2600).

Which is a better deal? You do the math.

Either way, no one is jumping to buy OR rent! Has been listed for quite some time now for both.

http://www.mycaar.com/%28xtbnvx3dwz2yys552injuyzo%29/propertyDetails.aspx?mls=475049

Anonymous said...

Today's new listing at 1112 E. High Street c.1900 w .28 acres sold "as is" for $549,900. With the hospital moving, is this still a prime location for commercial. I am assuming, of course, that residential is not the end game.

http://www.mycaar.com/%2830i2gj2vcdu13m3qvzsb1g55%29/propertyDetails.aspx?mls=483157


Mycaar is riddled with so many listings at impossible prices . . . impossible to negotiate, impossible to finance, impossible to appraise, and recently added impossible to close on without hold harmless deed due to title problems. Not to mention the obsolescence of much of C'ville's inventory. I understand that people are underwater, but who will the greater fool be? My visits to properties have been a total waste of time as Realtors attempt to talk someone into putting in an offer with no specifics on the property/seller other than a walkaround and "home inspection" will give you all the answers. Same sales approach as at the height of the bubble . . . a teenage babysitter could do as well as the C'ville Realtor for much less cost.

I'm waiting for someone to come up with a new sales auction mechanism that removes all the middlemen still skimming cream off the top of this industry. With legal and financial fees escalating, the net on any transaction goes down, down, down. Perhaps Google or Ebay will come to the rescue.

John Doe said...

Salient points to which all buyers and sellers should take heed.

These are among the reasons that this blog is now calling the bottom of this market for Q1 2013.

...And that's probably far too optimistic.

Toss in some global strife, commodities spikes, 2012 elections, rising mortgage rates, ongoing structural unemployment, the fraudclosure/MERS mess, among many other elements, and we could be Japanese.

...And that may be too optimistic.

Anonymous said...

Good interview with Case and Shiller on Bloomberg.

http://www.bloomberg.com/video/64896768/

Nov. 30 (Bloomberg) -- Wellesley College professor Karl Case and Yale University professor Robert Shiller, co-creators of the S&P/Case-Shiller home-price index, talk about today's report and the outlook for the U.S. housing market. The index climbed 0.6 percent from September 2009, the smallest gain since January, the last time prices declined year over year. The increase was smaller than the 1 percent median forecast in a Bloomberg News survey of economists. They speak with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg)

Anonymous said...

How do you contact the people at MyCAAR? I did not find contact information on their site, nor in the phone book.

Anonymous said...

Found it:

The Charlottesville Area Association of REALTORS® (CAAR) website
lists the following:

CAAR Real Estate Weekly
contact Information:
308 East Main Street
Charlottesville, VA 22902
Phone: 434-817-9330

Anonymous said...

"What’s most striking about the attacks on QE2 is how hysterical they are. People aren’t just suggesting that the Fed’s policy—which is quite modest relative to the size of the U.S. economy—might be ineffective or mildly inflationary. Instead, they’re accusing the Fed of “injecting high-grade monetary heroin” into the system, pursuing a policy that “eviscerates” the middle class, and potentially giving birth to an “undead homicidal zombie market.”

Read more http://www.newyorker.com/talk/financial/2010/12/06/101206ta_talk_surowiecki#ixzz17ONCx8DO

Anonymous said...

Blog has gone quiet. Hope all is well.

Anonymous said...

VAR approved short sale document:

http://www.caarmls.com/CAARReports/media/D9480923102651.pdf

What strategy could the Realtor legitimately craft that protects the Buyer with this proposed black box operation with the lien holder? No wonder folks are not interested.

AliG said...

Bubble Blog's last post???

C'ville Bubble Blog said...

Greetings. Back to posting:
http://realcville.blogspot.com/2010/12/charlottesville-albemarle-real-estate.html