Tuesday, March 29, 2011

Case-Shiller Index: Home Prices Fall For 6th Straight Month

"Excellent news: Despite the best efforts of misguided government policies (tax credits, mortgage mods, foreclosure abatements),  and the Fed (ZIRP), home prices are falling towards normalized levels. (Yeah!)" -- Barry Ritholtz, The Big Picture
The widely-watched 10- and 20-City indices saw declines everywhere but DC; 11 cities hit fresh lows.  Article and charts here.

The Charlottesville / Albemarle Area saw major median home price declines y/y in February.

The C-S, reported on the 4th Tuesday of every month, caps a week of dismal RE numbers: New Home Sales Fall to lowest since 1963; Existing Home Sales dove 9.6%; Feb Pending Home Sales (closing in March / April) were down 8.2% y/y; Housing Starts sank 22.5%.

Why Housing is 'Double Dipping' Even as the US Economy is in "Recovery.

Thursday, March 24, 2011

Under Reported By 200%: Virginia's Unemployment Rate for 2010


US New Home Sales Fall Record 16.9% to Lowest Level Since JFK Era

Disastrous.  This is the MOM January to February 2011, and YOY for Feb 2010, the decline was worse at -28%.  This data is for contracts.  Meaning that closed sales for April & May, "Spring Selling Season," will be weak.
"The housing market has literally collapsed," said Tony Sanders, a real estate finance professor at George Mason University.  "We're stuck, it's not going to revive in the Spring, and it may not in the summer."
Read at MarketWatch.

See Also:
Nest Realty Group: Major Median Home Price Declines February 2011
Cville and Nat'l Home Sales Drop in February
27 Facts About "The Housing Crisis That Never Seems to End"

Chart via ZeroHedge:

Wednesday, March 23, 2011

"Almost Ready" - A Reader Explains the Decision to Buy in the Charlottesville Area

As of March 20, the Charlottesville Albemarle area has seen 17% fewer home sales in 2011 v. 2010.  January to February sales dropped significantly both locally and nationally, and the median price year-over-year has nosedived.

Qualified buyers aren't presenting themselves with the same speed as they did last year when the Homebuyer Tax Cred was in place.    Good news for willing buyers, right?

So one buyer, under the name "Almost Ready,"  has shown up in the comments section explaining the decision to move forward.  Other commenters are weighing in.  If you'd like to add input, please do so at that post.

The Bubble Blog take on this?  Everybody needs a place to live. This blog is not anti-buying (and has said so since 2008).  It's anti-bubble pricing, anti-spin, and pro-transparencyThe asking price is not the offer nor selling price.  Houses are not investments.  At this point, an opinion, there's still plenty of downward pressure on local prices from large inventory, distressed sales, unemployment, let alone gas and food prices and national/global economic instability.  

Plus local lack of qualified buyers who plan to stay the 7-10 years necessary to own most homes without losing significant $$$.  This area is highly transient: about 30% of the population leaves every yearOpinion: it's going to be a buyer's market for some time to come, though there will be the usual Spring/Summer burst of activity.

Wishing Good Luck to "Almost Ready."

C'ville and National Home Sales Drop in February, More Price Reductions Expected For Spring

January - February 2011 Month over Month % Sales Decline - Completed Sales

Charlottesville Single Family Homes 17 to 5  -70%
Charlottesville Condo 12 to 11  -8%

Charlottesville Townhouse 19 to 11  -43%
Single Family Homes -30%
Single Family Homes 10 to 9  -10%
Single Family Homes 15 to 13  -13% 

RealCentralVA points out that 17% fewer sales have closed  in the Cville Area in 2011 v 2010 through March 20.

LOCALLY,  the this is typically a "slow" time,  as the area tends to follow the school year.  Tracking local listings, price reductions are coming fast now, many of them unannounced, as sellers try to find buyers before more inventory comes on the market.  *These sales numbers don't distinguish between "new" and "existing.

NATIONALLY:  The NAR Reports:  From January to February 2011, national Existing Home Sales dove 9.6 % and prices are at a 9 year low.  "Existing" refers to completed transactions for single family (detached) homes, condos, townhouses.  Reductions in prices are expected by analysts and buyers for the Spring market, and analysts say the "bottom" has been pushed off to 2013. 

In a survey conducted by MacroMarkets, using the Case-Shiller Index, a majority of economists surveyed expect further declinesGary Shilling expects a 20% decline on a national basis.

Monday, March 21, 2011

Friday, March 18, 2011

Nest Realty Group: Major Year-Over-Year Home Price Declines in Charlottesville Area - February 2011

Nest Realty Group has released its report (at the link and also embedded below).  Sales are at about the same level in 2011 as in 2010--and why wouldn't they be with such large price cuts?  Inventory remains high, and compounds daily.  For the City and surrounding Counties, it would take 18 months to clear it all.

Median Prices January and February 2011:

City of Cville
Single Family Homes
2011 January up 20% over 2010 ($260k v $210k)
2011 February down 38% over 2010 ($160k v $257k)

Albemarle County 
Single Family Homes
2011 January down 10% over 2010 ($225k v $248.6k)
2011 February down 14% over 2010 ($334.5k v $386.2k)

Fluvanna County
Single Family Homes
2011 January same as 2010 ($209k v $210k)
2011 February up 2% over 2010 ($213k v $210k)

Greene County
Single Family Homes
2011 February down 15% over 2010 ($222k v. $261.4)

Louisa County
Single Family Homes
2011 January down 67% over 2010 ($94k v $285.5k)

Nest Realty Charlottesville's February 2011 Market Report


Realtor Greg Slater pointed out that February 2011 new inventory was 50% higher than in 2010; Realtor Jim Duncan recently pointed out that in the first two weeks of March 2011, new inventory was 23% lower than in 2010.

Thursday, March 17, 2011

Trump's Rep: Bank of America Has An Unrealistic Expectation For the Purchase Price of Albemarle House

The luxury market in the Charlottesville Albemarle area has been dead since 2008--and buyers know this, even with nice views and conservation easements.  Sellers and their agents, however, are still hoping for a "turnaround" in the market.

Patricia Kluge's rise to Billionaire, fall to Millionaire, and demise to Defaulter is chronicled in the current Forbes, and Donald Trump's interest in Albemarle House is mentioned.  Bank of America paid $15.3M to repossess Albemarle House in January, instead of letting the Trump dynasty have it for $3+M.    

"Ultimately, we'd like to buy the home, but the bank has an unrealistic expectation for the purchase price," said Jason D. Greenblatt, general counsel for the Trump Organizatio.   Trump retains right of first refusal.

Wednesday, March 16, 2011

State Legislature Looks Into Virginia's Foreclosure Numbers

The following video from NBC29 gives two pieces of hard data: there are 28,000 bank-owned homes in Virginia and that these have been slow to sell, since sales slowed dramatically when the Federal Homebuyer Tax Credit expired April 30, 2010.

Otherwise, there's some chatter about foreclosures "slowing" and a comparison, without using numbers, to foreclosures in the hardest-hit states--as if that really means something to struggling homeowners or, for that matter, removes the glut of local unsold houses.  Locally the Charlottesville Area saw a 225% increase in foreclosures in 2010 over 2009.  Combine this with  area median home price declines as well as 30% of Virginians at or near negative equity (owing more than home is worth) and there will be more foreclosures (and short sales or strategic defaults) to come.

Albemarle County Supervisors Holding Property Tax Rate Steady Despite Declining Values and Need For $

Some citizens have implored the Board to raise taxes: just .01 cent would generate $1M in additional revenue--which the public schools soreley need. Albemarle County's property tax base is declining. Additionally, Albemarle County marks Foreclosure sales "Invalid"--meaning they don't use them to assess property taxes. Foreclosures are fast sellers in the County and if their value were counted as "comps," property values would be just a little bit lower.  Read more at C-VILLE.

Tuesday, March 15, 2011

"The Lodge" Is Listed For Sale - 1536 Rugby Road - $1,395,000.00

Back in August 2008 there was talk of the UVA fraternity house, home to and owned by Chi Psi, being put on the block.  Now it is publicly listed for 30+% less than 2008's "north of $2 million."  The tax assessment is $975,000.  The property has recently served as a rentable venue, and also is apparently occupied, according to Realtor Jim McVay's listing on the local MLS.

The listing description refers to the 3.66 acre property only as "Trails End" and makes no mention that Chi Psi bought it in 1950, though it does mention the club era:
"Exceptional property and opportunity only minutes from the Rotunda and on 3.66 acres!  Restore Trails End to its glory and maybe add a carriage house or two or develop the land using the 5 division rights.  Dramatic stone work on the outside and in.  Large entertaining rooms, covered porch, open deck and patio--this was built as a county [sic] club!  Winter peek of the Blue Ridge Mts.  More pictures to be added soon.  Occupied, so please do not drive in the driveway without an appointment."
There are currently no interior pictures for MLS #486402, 7,800 sq ft, ca. 1930.

The listing, however, has some awesome vintage photos.  One has a beautiful pastoral view that looks out to what is now the 250 Bypass and urban sprawl, including K-Mart and the future home of Whole Foods, which is now one of the worst intersections in the City--Rt. 29 and Hydraulic Road.

Chi Psi seal copyright Chi Psi.

Black Swan: Japan's Earthquake, Tsunami, and Nuclear Tragedies

The human loss is still untold and the rest of the world will share the grief and misery of Japan for months to come.  But already it is clear that the suffering nation's crippled economy is going to impact the rest of the world.  A "Black Swan" is an unforeseen rare event whose impact is huge.  The term was popularized by Nassim Taleb in his 2007 book of the same name.

Sunday, March 13, 2011

Happy 3rd Anniversary to Charlottesville's Ugliest Landmark

The "boutique" Landmark Hotel in the middle of Charlottesville's Downtown Mall was supposed to be  shining star.  Instead, the project has been tied up with the lender being seized by the FDIC and litigation between developer Lee Danielson and native-son "owner" Halsey Minor, who put his end of the deal into bankruptcy.  What are the chances we'll also be wishing a Happy 4th, Happy 5th, or Happy 6th to the Tyvek Tower?  Read.

Friday, March 11, 2011

CoreLogic: Home Prices Continue to Decline in the Charlottesville Area

CoreLogic tracks the nation's housing markets. National prices declined 2.5%. The Charlottesville Area* is at -6.72% for January 2011 year-over-year.

95 homes of 2,900 sold in January 2011: sellers had a 3% chance to complete a sale.  Update: Friday PM:  RealCentralVA states that 138 "homes" sold in January 2011, meaning sellers had a 4.6% chance of completing the sale.  A "home" is a condo, townhouse, and single family dwelling.  The website offers sales by County, but doesn't distinguish between property types.  The post also doesn't mention YOY price declines.

The price decline will be even sharper when CoreLogic reports for February 2011: The median YoY price declines were Charlottesville at 38%, and Albemarle at 14%.
From NBC29:

Buyers: Nobody needs a "crystal ball" to understand that on a local and national basis the "asking price" is not the offer price or selling price. A buyer needs to be prepared to stay in the home as prices continue declining. 

Sellers with equity can price their homes below what a real estate agent will determine is a "comparable" property, and therefore have more of a chance to sell. This strategy is impossible for those who bought in this area between 2004-2010. As of Q4 2010, 30% of Virginia mortgage holders are at or near negative equity. 

*The Charlottesville Metropolitan Statistical Area: Albemarle, City, Greene, Fluvanna, Nelson (CAAR typically adds Louisa).

Thursday, March 10, 2011

Charlottesville Home Sales February 2011: Median Price Down 38% YOY

There were just a handful of closed contracts for Single Family Homes in Charlottesville in February, and folks bought at the low end.  There are currently 203 single family homes for sale in Charlottesville, which translates to inventory of 3 years and 4 months.

Sure, Winter is slow.  But season is just the tip of the proverbial iceberg in why sales are so low in the City.  The real issues are price and old housing stock.

This year, like the past few, supply will far exceed demand.  Sales are so low and sellers and agents so committed to their prices--whether by necessity or nostalgia for 2005--that there are "For Sale" signs all over the 'cultural and educational heart of Central Virginia.'

Thus far in 2011:
Single Family Homes

2011 February down 38% over 2010 ($160k v $257k) -$97k

2011 January up 20% over 2010 ($260k v $210k) +40k

In 2010, 66% of all area sales were at the first-time price point of $300k or less.  Inventory grows daily.  There is no Federal Tax Credit to help this Spring; ever since it expired last year, sales have remained depressed. 

See also: February 2011 Albemarle County Home Sales

The below are via Charlottesville Real Estate Talk; the information is "deemed accurate but not guaranteed."

Inventory, Homes Under Contract, Sold:

 The Numbers:

Wednesday, March 9, 2011

Albemarle Home Sales February 2011: Median Price Declines 14% YOY, Inventory Rises Daily

32 Single Family (Detached) Homes were sold (closed contract) in Albemarle County during February 2011.  34 sold in 2010.   

2011 February median price is down 14% over 2010 ($334.5k v $386.2k) -$52k

2011 January median price is down 10% over 2010 ($225k v $248.6k) -$23.6k

In 2010, 66% of all area sales were at the first-time price point of $300k or less.  There are currently 713 single family homes for sale (includes "proposed" properties), which translates to an overall inventory of at least 18 months (excludes "proposed")At the higher price points, $701k and into the millions, sales are so slow that there are years worth of inventory.

Inventory grows daily.  There is no Federal Tax Credit to help this Spring; ever since it expired last year, sales have remained depressed. 

The below graphs are via Charlottesville Real Estate Talk, which has the caveat that the information is "deemed accurate but not guaranteed."
 The Numbers:

Tuesday, March 8, 2011

Virginia Is #8 of 50 States For Homeowners Owing More Than House is Worth

Nationally, 11.1 Million mortgage holders currently have negative equity, owing more than their homes are worth as of Q4 2010.  Virginia has 24% underwater "owners", and another 6% are on the brink.

As prices continue falling due to high supply and low demand in the Charlottesville Albemarle Area, more people who bought or HELOC'd between 2004-2010 will fall underwater.

Underwater homeowners can't refi, and it's more difficult to sell when the debtor has to bring cash to closing; it's even difficult when the bank agrees to a short sale, which buyers fear as taking too long.   Read and  Read.

BTW?  Anybody who suggests this area is "better off" because it's not California or Nevada is missing the point of how much $$$ local folks have lost--and are going to continue losing--until the "correction" is entrenched here...in 2013 or so.

2010 Sales
2010 Foreclosures
Price Decline Forecasts

Northrop Grumman's Sperry Marine to Cut Jobs In Charlottesville

The company already cut local jobs in June 2010, and now plans to cut 500 by the end of May, in Maryland and Virginia.  Company officials cided 'mounting debt in governments worldwide, cuts in military spending and stiffer competition that impacted "the volume of work in our near-term business forecast,"' according to the DP.

To Get Back to 6% Unemployment, 300,000 Jobs Need to Be Created Every Month Until 2014.

National Unemployment at 8.9 12%
Despite End of Recession in 4/2009, Local Unemployment Remains Elevated.

Monday, March 7, 2011

As Major Banks Move Toward Foreclosure Settlement, A Deeper Look at MERS...And Does It Hold Your Mortgage?

 UPDATE 3/7: CalculatedRISK has the the settlement proposal document and further information.

Original Post 3/6: 
MERS, the Mortgage Electronic Registration System, is a tiny company located in Reston, VA.  Though it's not paid nobody nothin', it holds title to roughly 60 Million mortgages--about half of all those in the USA.  It has been at the center of the "robo signing" crisis/scandal 

Learn about MERS in this NYT article, on the eve of a settlement by major banks with the States Attorneys General and Federal regulators, which could drastically alter foreclosure proceedings, to the benefit of struggling homeowners.  (Though, some say, drag out housing's "recovery" until 2014).  More info on the settlement here and here.

If you've purchased, do you know who holds your mortgage?

Friday, March 4, 2011

Unemployment Falls to 8.9%...Or Rises to 12%, Depending On Who Is Counted

8.9% is the lowest rate since April, 2009.  That's the same month, coincidentally, that the "Great Recession" technically ended.  However,  Gluskin Sheff's David Rosenberg points out that 700,000 folks are no longer counted as unemployed b/c they've stopped looking for work.  And if they were, the U-3 unemployment number  would be 12%.
See giant version of chart.

Thursday, March 3, 2011

The Wall Street Journal Wants You to Buy A House

Hey, it's a great time to buy--for somebody.  Right?

Even as the WSJ Developments blog reports that fewer Americans believe buying a home is a safe investment, and the newspaper published this chart showing the percentage of underwater 'owners' in the US (25% in VA), there's been a recent spate of pro-buy articles: