Sunday, May 29, 2011

2011 1 Jan. - 1 May Home Sales City of Charlottesville Continue to Decline; Median Price Falls

Every month, sales and pricing data confirm: the housing market is not going to "recover" in 2011, in the Charlottesville area nor  the United States. 

As is true every Spring, sales in this area will rise before contracts drop again in August; and some localities in Central Virginia are starting to have sales nearing the Tax Credit juiced sales of 2010--because prices are dropping.   

But Charlottesville continues to fare badly.

Below are City of Charlottesville numbers; we covered Albemarle County Q1 earlier and pricing info is here:  Major Price Declines Have Hit Central Virginia.

Sellers in Charlottesville continue to struggle in getting their single family homes to contract.  Sales in the first four months of 2011 (1 Jan- 30 April) declined -15% over 2010, while median price declined 3.3%.

2011: 55
Sales by month: January - 17, February - 7, March - 16, April - 15
2010: 65
2009: 61
2008: 70

Charlottesville Pending Contracts Decline in 2011: Fewer contracts were written in Q1 2011 than in 2010, so going forward, sales will be lower.  Of course, not even all of these will close because some with "contingencies"--especially the need to sell current home--will be unsuccessful.  Image via Nest Realty Group Q1 Report.

Charlottesville Inventory: There are currently 240 single family homes listed for sale in Charlottesville.  At April's rate of sale, there are currently 16 months of inventory.  A "balanced" market is 6 months.

Charlottesville Sales: 2011 sales are 22% lower than 2008.  While folks certainly took advantage of the Homebuyer Tax Credit last year, which expired on April 30, the credit had negligible net impact in raising City of Charlottesville sales from previous years...though when the Tax Cred expired, sales all over this area plunged.

Charlottesville Median Price: The Charlottesville single family home median price declined 3.3% (April 2011 $250k v April 2010: $258.5K).


Nest Realty Group addressed this headscratcher succinctly in their Q1 2011 report:
"The conundrum continues.  In a time when gas prices are reaching an all-time high* and 'Location. Location. Location.' is the core of many purchasing decisions, the City continues to be one of the worst performing areas in Central Virginia.  Single family and attached home sales are down from Q1 2010[....]Surprisingly, median prices in the City haven't decreased much...which could be the reason sales have continued to lag.  In other segments of the Central Virginia real estate market, prices have corrected, buyers have seen value, and they've decided to jump into the market."
[Emphasis ours.]

*Gas prices are about $1.35 higher than May 2010

If you scan the City listings, a number of things jump out:

a) Many are quite small (even in the days of "Green" downsizing, 750 sq ft for $200k (750 sq ft that's not luxe) seems nutty not the best way to spend $;
b) Much of the stock is old and unimproved;
c) Many are in neighborhoods that did not (and now, bubble over, will not) "gentrify"
d) There are long-term owners who don't need to sell, and are content to sit on their prices;
e) Conversely, there are bubble-era buyers who are now sellers: they have reduced their asking to about 5% less than what they paid--but have not yet opted for a short sale or strategic default;
f) In the "better" neighborhoods the price per sq foot is often exorbitant;
g) The temporary buyer (medical residents, students, short-term jobbers) here, as everywhere else in the USofA, rarely buy;
h) the biggy: as Nest points out, buyers can get much more, and much nicer, out in the Counties--for less, and for a lower tax rate;

i)In the Rugby Road / Lewis Mtn Road areas you now see price reductions of several hundred thousand dollars--and no sale.

Charlottesville Single Family Home Sales 2009 and 2010
Click for larger image in new window.

The above Chart is from this post (orig. via Jim Duncan).

What Price Properties Are Selling in This Area?  This price pie is January- 1 April 2011, and is by and copyright Pam Dent at Charlottesville Real Estate Talk.
Click for larger image in new window.


Thursday, May 19, 2011

Bundoran Farm Foreclosure Relisted By Bank for $2.3M

1701 Bundoran Drive
MSL #488824
7 bedrooms/5 baths/2 half
55 Acres, ca. 1952

Upper Bundoran, the manor house at the Bundoran Farm "preservation development" trying to get going amidst s/low local and nationals sales is relisted for $300k less than what the previous underwater owner hoped for.

(See Albemarle County's declining home prices and data on the Charlottesville Area real estate market).

The April 18 foreclosure auction on the steps of the Albemarle County Courthouse unloaded the 6,500 sq ft house built in 1955 sitting on 55 acres.  The house held a $3.1 Million mortgage and had been for sale for $2.6 M, and  went back to the bank for $2,033,000. 

"Nobody bid $2,034,000," said attorney Bill Schmidheiser, the foreclosure rep.  "I was surprised," according to The Hook's after-auction coverage.

Image copyright CAAR.

Wednesday, May 18, 2011

Sperry Marine Axes 60 Workers in Albemarle County

As it announced it would in March, Northrop Grumman's Sperry Marine has given the pink slip to 60 workers at its Albemarle facility.  These were well-paying, highly skilled engineering jobs, which are hard to come by in this area.

Recently, a local biotech company announced it intends to hire in a couple of years (according to the DP) and there's a projection of 1,700 construction jobs between now and 2014 for the "Shops at Stonefield," in addition to a projection of 700 retail and hotel service jobs upon full build out.

Otherwise, the outlook remains the same here as in the US: good jobs vanish, and the ones that do come to this area are not "career" type but lower-paying service sector jobs (retail, food prep and service, unskilled labor, etc.).  NGIC has jobs: but the majority of those jobs don't go to "locals."

More Local Jobs Vanish - C'ville Area Unemployment Was 3% in 2008
Nat'l Unemployment Rises to 9% / 15.6

Bank Takes Back Patricia Kluge's House, Glen Love, for $2.1 M; Trump Offered $700k

Update, 7pm, May 18 
The Hook has the details.

Original Post, 6am, May 18
Title:  Trump Adds Ex-Owners Kluge and Moses to Vineyard Venture, While Their Home "Glen Love" Scheduled For 10 am Foreclosure Today

Donald Trump isn't going to save America but he seems to be 'saving' old, down-on-their-luck pals Patricia Kluge and Bill Moses.  His son, Eric Trump, says Kluge and Moses will be coming aboard at the Trinery--the former Kluge Estate Winery, though in what capacity is unclear.  Eric Trump called the winery one of the "best vineyards in the world."

Kluge and Moses recently lost Kluge Vineyard Winery to foreclosure, and when it went at absolute auction, Donald Trump bought the majority stake for a song.  Trump has bought other Kluge properties, but not the couples' house--yet.  Albemarle House, the couples' previously-owned over-leveraged estate, was lost to foreclosure and is now listed at $16M by BofA.

Meanwhile, today, 10 am today on the steps of the Albemarle County Courthouse, Kluge and Moses face another foreclosure: Glen Love, the only house built from their failed housing development, "Vineyard Estates."  They bought it just a year ago at foreclosure auction, as "Clover Acquisitions LLC."  (Makes you wonder who did the underwriting on this mortgage....)

Foreclosure Auctions are subject to change and "cure" at any moment.

Tuesday, May 17, 2011

Bubble Blogger Buys A House

No, not any of us.*   It's Grim, aka James Bednar, the guy behind New Jersey Real Estate Report.

After tracking the ups and then the downs of his market for years, and even becoming a Realtor, the blogger found a home and price that satisfied.  And with the full realization that it's just a place to live--not an "investment,"--he sets about renovating.

Via the NYTimes:
He withheld the gritty details of his purchase from the blog. But in an interview, he readily gave them up, saying that since he was in the habit of exposing price information about other peoples’ houses, it would be hypocritical to do otherwise: purchase price $435,000, list price $479,000 — meaning that the Bednars negotiated a 9 percent discount.

“He did what made sense in his situation,” [a local broker] said of Mr. Bednar. “You should only make a move now if you first understand the benefit to be purely ownership, shelter and enjoyment of a lifestyle — because there is not likely to be any real gain in value for perhaps seven or eight years.
[Bolding C'ville Bubble's.]  Read the article.

See also:  
James Altucher:  Why I Would Rather Shoot Myself in the Head Than Own A Home

*We're still patiently tracking the City market, currently with 16.5 months of inventory, looking forward to the price reductions coming later in the summer when sellers start seeing through buyers' eyes:  old or used housing stock and higher taxes combined with higher prices don't make the City a more attractive purchase than the County; and in the County, the price declines in the $600k-$1M market--due to shortage of "move up" buyers--will be in the six figures, not just the fives.

Tuesday, May 10, 2011

Zillow: 28.4% or 16.2 Million Owners Owe More Than House is Worth. Prediction for Bottom Pushed to 2012.

If you're a BUYER, research carefully to avoid being  underwater in 2012.  Many who purchased with the 2010 Homebuyer Tax Cred are now underwater.  Just a small drop in price can quickly drag a home underwater when you factor in interest, and consider the upfront agent fees and closing costs.

In this area,  nearly 30% of mortgage holders  are at or near negative equity.  Virginia had a mighty big bubble, which is still deflating.  As Realtor @JimDuncan said, We're not at bottom.

SELLERS can act accordingly by underpricing the competition--if they have equity.  Gary Shilling's advice:  "Sell Your House YESTERDAY."
A prediction for a 2012 bottom seems a little bit optimistic, especially given the latest economic news (see links, below).  

ZILLOW's report maps the carnage in Q1 2011:
  • First Quarter Home Value Declines Match Worst of Housing Recession
  • Home Values Show Sharpest Quarterly Decline Since 2008
  • Negative Equity Rises to 28.4%
  • U.S. home values posted their largest quarter-over-quarter decline since Q42008, falling 3 percent. 
  • Home values have fallen 29.5 percent from their peak in June 2006.
  • Negative equity reached a new high with 28.4 percent of all single-family homes with mortgages underwater, up from 27 percent in Q4 2010, due to accelerating home value declines.
  • 57 Months of Price Declines  
Read the article from Bloomberg here,  the WSJ here. 

The bad economic news has piled on thick in the past 10 days:
Images copyright WSJ. 

WSJ video recapping Zillow's Q1 2011 report:

Monday, May 9, 2011

0%: The Long-Term Return. It's Not an "Investment," It's a Place to Live

Expecting a house to be a "nest egg" or to "force savings" is, let's face it, a bubble-era dream, especially in this day and age where nearly 30% of homedebtors owe more than the house is worth. Houses, condos, and townhouses doen't generate $$, they take it in the form of agent fees, closing costs, upgrades, maintenance, annual taxes, etc.

Everybody needs somewhere to live. But the idea that property is an "investment" should be crossed off the list of reasons to purchase.

Friday, May 6, 2011

US Home Prices Confirmed in Double Dip: Clear Capital

2 weeks ago, the Case-Shiller Index affirmed the "Double Dip" in US home prices.  Now Clear Capital has confirmed price drops, and prices are now lower than the 2009 trough, the middle of the Great Recession.  CNBC has details:
  • Sales of bank-owned (REO) properties hit 34.5 percent of the market.
  • This resuled in a national price drop of 4.9 percent quarterly.
  • 5 percent drop year-over-year. 
  • National home prices have fallen 11.5 percent in the past nine months, a rate not seen since 2008. 
Clear Capital Graph, via CalculatedRISK:
Click for larger image in new window.

    Add short sales, CNBC says, "where the bank allows the borrower to sell for less than the value of the mortgage, and prices have nowhere to go but down.READ.

    Major Price Declines Have Hit Central Virginia
    Albemarle County
    Price Declines

    Unemployment Rises to 9%. The "Real" Number is 15.6%.

    244,000 jobs were added to the US economy in April 2011.  Hey, great.  But the US is still down 7 Million jobs since 2008.   The unemployment rate rose back up to 9%, which is the number widely reported by the mainstream media.

    However, when the "U-6" unemployment rate is examined, the "real" unemployment rate is 15.6%: those who are underemployed, who are involuntarily working part time, those who have stopped looking.

    Scariest Job Chart Ever via CalculatedRISK
    Click for larger image in new window.