Thursday, September 16, 2010

The DIA Effect? Greene County Gets Bump in August Home Sales

Greene County was the segment of the Charlotesville Area real estate market that saw a rise in closed (completed) sales for single family homes in August: +25%.  Greene also had a rise in signed contracts: +41% (14 homes contracted in July v. 23 in August).

Details: Completed Single Family Home Sales in July 2010 v. August 2010
  *Albemarle County -24% (63 v 48)
  *Louisa County - 24% (21 v 16)
  *Fluvanna  -14% (21 v 16)
  *Charlottesville -10% (22 v 20)
  *Greene County +25% (12 v 16)


Coincidence, or the DIA Effect?  The DIA ribbon-cutting was August 10, and this blog mentioned what many house hunters know: in Greene County buyers will find lower prices and easy commutes to the DIA facility.  With local unemployment rising since 2008 and private hiring on the decline, the DIA transplants, and some resident employees, are more confident in their economic futures, and will find many options to fulfill housing needs.


Overview: August 2010 v. August 2009
*Sales in Albemarle County down -45% over August 2009
*Sales in City of C'ville down -20% over August 2009
*Sales in the Charlottesville MSA down -30% over August 2009 (City, Alb, Greene, Louisa, Nelson, Fluvanna)

While Greene was the leader, sales remain low.  In August, sellers had a 6% success rate, and inventory soared to 18 months.  Absent the Federal Gov't tax credit that was in effect from 2008-April 2010, and absent the 1999-2007 national notion of "housing always goes up," area sales are at 1990's levels.   Even with some DIA pop, this area enters what some refer to as the "new normal" or "correction" phase.  

Also:
  • A house in Ruckersville will be featured on the "Today Show" in a segment by RE maven Barbara Corcoran on Friday, 9/17.
  • Data: stats here; and here.  See earlier graphs.
  • Bill McBride On Two Fundamental Problems in the Housing Market.  1 in 4 VA mortgages has negative equity.

Wednesday, September 15, 2010

Freddie Mac Estimates Home Sales to Drop Another 23% in 3Q - Charlottesville Area on Track to Do Worse

"Freddie Mac expects 4 million new and existing home sales in the third quarter, a possible 20.7% decline from last year and 23% drop from the previous quarter."
It's a toughy, this new normal.  And the way things are going around here, the Cville + 5 County area could "beat" this number.

Tuesday, September 14, 2010

Bank Reposession of Homes Sets New Record in August

About 100,000 went back to the bank, the highest number since RealtyTrac began keeping track in 2005.

Albemarle County Spends $360k For 3 Elementary School Playgrounds

Priorities, people, priorities.  Obesity is a national (and local) epidemic, and this is just a logical response to the problem.  Sure, it would have been hundreds of thousands of dollars cheaper to hire a few playground aides and buy some new balls, bats, bases, nets, racquets, goals, etc.  But quit yer bellyachin'!  It makes up for closing the beaches 2 weeks early due to lack of funds. Besides, with 260 additional, unexpected students enrolling this Fall, they've gotta put them somewhere.

Monday, September 13, 2010

HousingStory Predicts 9% Decline in Housing Prices in 2010, Nationwide

HousingStory's mortgage guru Michael David White looked at the various price indices and came up with their prediction for a nationwide price decline.  In certain sectors of the Charlottesville Albemarle area market, however, the decline will actually be steeper, as the "market correction" is just getting underway.  Read.

Time Magazine: "The Case Against Homeownership"

"For the better part of a century, politics, industry and culture aligned to create a fetish of the idea of buying a house."

Buying a house isn't, and shouldn't, be for everybody, nor should it be part of "The American Dream," Time Magazine argues.
The dark side of homeownership is now all too apparent: foreclosures and walkaways, neighborhoods plagued by abandoned properties and plummeting home values, a nation in which families have $6 trillion less in housing wealth than they did just three years ago. Indeed, easy lending stimulated by the cult of homeownership may have triggered the financial crisis and led directly to its biggest bailout, that of Fannie Mae and Freddie Mac. Housing remains a drag on the economy. Existing-home sales in July dropped 27% from the prior month, exacerbating fears of a double-dip recession and accelerating the accompanying slide in stock that took the Dow Jones industrial average to a seven-week low. And all that is just the obvious tale of a housing bubble and what happened when it popped. The real story is deeper and darker still.
Read.

Tuesday, September 7, 2010

Housing's Inevitable Crash: Will "Extend and Pretend" Finally Come to an End?

Home sellers had a 6% success rate in the C'ville Metro area in August. Inventory soared to 18 months.   In this 5 County region, as in many other areas, buyers sit on the sidelines as sellers have to "chase down the market. "   Meanwhile, Virginia remains in the Top 10 for mortgage holders with negative equity.  And today, the Obama Administration will announce another mortgage bailout. 

But in the 'wider world,' more and more economists and housing analysts are calling for what's been Federal Gov't policy to avoid thus far: letting housing crash where it will. 

Friday, September 3, 2010

Home Sellers in Charlottesville Area Had 6% Success Rate in August - Inventory Soars to 18 Months

It's Labor Day weekend, and The Fall is just around the corner.
  • 162 of 2906 properties of all types sold in C'ville, Albemarle, Fluvanna, Greene, Louisa, Nelson  in August 2010.
  • 127 of the 162 were  single family homes2047 of the 2906 properties currently available are detached, single family homes.
  • This means homesellers had a 6% rate of success.  Or, to put it the other way, a 94% chance of failure.
  • Sales were down 30% for all types of inventory in the City + 5 Counties from August 2009. 
  • Sales for individual counties have not yet been posted, to compare with July 2010's news, which included a nationwide drop of 27% in sales to a  15 year low, plus a drop of 48% in Albemarle County for single family homes.  Read.
  • Inventory for August 2010 is up 50% from August 2009.
  • Inventory in August 2010 is up 20% from July 2010. 
  • "18 Months of Inventory" means that it would take that long, at this pace, to clear the housing stock.  A "balanced" market has 6 months of inventory.
  • National inventory (existing) is at 12 months supply.
  • Mortgage Rates ave declined for 10 of the past 11 weeks, now at 4.3%.
The data comes from Nest Realty Group.  Broker Jonathan Kauffman comments that the market will continue to "correct" itself, but that the two major factors are unemployment rising locally and rising nationally, plus  huge inventory. 

Actually, the most important element holding back sales in this market: price.  Inventory will clear out when prices reflect  the idea that bubble prices of earlier years do not indicate actual value now.  In this area, Foreclosure resale prices are closest to "fair market value," and Short Sale pricing is getting more realistic as well.  Check out daily "Price Reductions" on Trulia.com.

Read the Nest Realty Group post.

Below: Graph of 2009 and 2010 Single Family Home Sales in Charlottesville, Albemarle, Fluvanna, Greene, Louisa, Nelson  
Click for larger image in new window.

Below: Table of 2009 and 2010 Single Family Home Sales in Charlottesville, Albemarle, Fluvanna, Greene, Louisa, Nelson.
Click for larger image in new window.

Below: Changes in Inventory Levels for All Property Types, C'ville + 5 Counties
Click for larger image in new window.

Below: Table of Inventory and Sales 2009 - 2010, All Property Types, C'ville + 5 Counties
Click for larger image in new window.

Colored graph via C'ville Bubble Blog; all others via Nest Realty Group

US Unemployment Rises to 9.6% in August - 'Underutilization' Rises to 16.7%

The US lost 54,000 jobs in August.  The Charlottesville Metro Area is following this trend of vanishing jobs. The "real" national rate (unemployed long term, stopped looking, underemployed)  ticked up to 16.7%.

Click for larger image in new window.


Thursday, September 2, 2010

"More Local Jobs Vanish" - Unemployment in Charlottesville Albemarle Area

New numbers show that more people are struggling in this area.  The DP has the details:
...[T]he number of people with jobs in Central Virginia dropped by more than 1,600 between June and July. The region’s 99,902 employed is the second-lowest total since August 2008. Only January 2010’s total of 99,245 employed is lower.
 Read.  And:
  • The Cville Metro Area was at 3% unemployment  in 2008.
  • The new data isn't much different than that in July, when the City was at a 20 yr low.   
  • Private job growth has ended; those with a 4 yr degree and PhD's have the highest rate of un- and under-employment.
  • Additionally, if all the people in RE industry (Realtors, architects, builders, decorators, home improvement, etc.) were counted as "jobless" because they don't make a living at the profession, the unemployment numbers would be higher.
Fewer jobs = fewer home sales, more underwater mortgage holders, more foreclosures, etc.  There's a popular hope that Q4 of 2010 will be the bottom of the local housing market.  Sadly, no.  Much more pain to come.

Wednesday, September 1, 2010

Charlottesville Albemarle Real Estate Heading into the Fall

A link-fest that limns the housing zeitgeist as the big selling season closes, and The Fall sets in....
And:

The 30 yr mortgage rate is at its 10th week-in-a-row record low: 4.26%.  Not seen since the 1950's.  Interestingly, these rates haven't really been a big enticement to buyers, on a national basis.  (We're predicting under 4% by October, fwiw.)

"...the only effective stimulus of new housing demand will be a precipitous decline in housing prices" in Charlottesville / Albemarle.  (Oh, wait, the RadarLogic analysts are discussing the national housing market.)

ZeroHedge: Not One New House Priced Over $750k Sold During July '10, nationwide.

Pragmatic Capitalism: Here's What Will Start A Housing Recovery in Charlottesville Albemarle

There's no official word of a new homebuyer tax credit.  But just by HUD head Donovan mentioning it, housing analyst Tom Lawler says Donovan May Have Made Near-Term Home Sales Worse, as buyers wait out the announcement.

The NYT wonders what they're smoking at the National Association of Realtors, who remain detached from reality as widespread fear freezes the housing market.

1 in 10 mortgage-holders face foreclosure. 

CNN Money:  Additionally, the number of people falling behind on mortgage payments for the first time is rising.

Forbes Magazine: Is it Really an "American" Dream If the Government Wants You to Be a Homeowner?

US News: Why Housing is Even Worse Than You Think 


The NYTThe article In Defense of Homeownership only applies to buyers who live in markets where prices aren't out of whack with median incomes (voila) or to buyers whose money is not earned through wages.

Albemarle County Closes Beaches 2 Weeks Early Due to Ongoing Budget Crisis

Albemarle County ends summer to save $19k.