Thursday, August 25, 2011

Charlottesville, Va: A Great Place to Rent A Big House for Little $

Over at Patrick's Housing Crash site, the only fair purchase price for a house is its equivalent rent.  Since rents and home prices often don't align in this area, especially the higher up in price point you look, the Charlottesville Area is a great place to rent.  (Unless, of course, the "landlord" is trying to make the mortgage payment with rent--then it's a sad story, not a successful transaction, because it's not happening.)

A thoroughly unscientific study--glancing at the ads on a recent Craigslist--leads to the "Cheap to rent a big house in C'ville" conclusion.  Scroll down to see examples.

To do your own research:  1.  Go to Craigslist and check it out.  2.  Then check out houses for sale via mortgage payment here.  See what pops up for the equivalent to the rents on CL. 

But mortgage payments aren't just the price of the house: don't forget interest, homeowners insurance, taxes, annual maintenance, HOA, and mortgage insurance (if downpayment is less than 20%) must be added to the mortgage payment.

*Click on image for larger version in new window.*

HOLLYMEAD (29N near shopping center, on way to Greene Cnty, DIA/NGIC)

GLENMORE (Rt. 250 E of City of C'ville, gated community, Keswick)

REDFIELDS (South of City; large County development S. of I-64)

EDNAM (Development near UVa's Boar's Head Inn on Rt. 250 W of City of C'ville)

NORTH GARDEN (pastoral area south of City in Albemarle Co. on Rt. 29S, easy access to Wintergreen)

GREENBRIER (middle of City of C'ville, easy access to Downtown and Rt. 250 Byp) get the idea.

Purchase Calculators here.


Art Nesten said...

If someone has the kind of cash flow to afford that rent payment on a big house, my guess is that he would much rather pay a mortgage on a smaller house he owns.

I know I would.

I'd be interested in seeing how many people would actually rent @ 1500-3000/month. Seems implausible to me.

Anonymous said...

Nobody 40 and under sees owning as a milestone or a privilege. It's something your parents talk about. But nowadays, they're wrong. They don't know what things are like.

This area has has a huge rental population because so many people are in and out with UVA, the hospitals, military.

downtownenvy said...

@ Art Nesten- I think you might be really surprised at how many people are renting in that range. We are renting for $1600 and we have several friends at that level or higher.

We are all in the market, but we refuse to buy a house that is too small for our families and over pay for it. We are planning on living her our entire lives so the idea that we have to spend 30% more for a home just because it is in the city of Charlottesville is crazy to us.

Most of us keep an eye on the listings and several of our friends have purchased in the last two years here. In every example they bought a house from people who had owned the home a while, and who were able to negotiate on the price pretty well. We continue to look, but our in no hurry because we like our rental, and we know that the right house at the right price will turn up in the next few years.

Anonymous said...

Totally agree with above poster. Wife and I are likely Cville lifers and happy renters who would like to buy a house, but see no need to overpay.

Art Nesten said...

Fair enough, guys, especially for big families. I could see around $1500 range. But some of those properties are $3000+/month, which means you'd have to be waiting for a pretty big house if you're willing to rent that, and my skepticism remains with respect to the existence of a substantial market towards that level.

Thanks for your input regarding your price levels.

C'ville Bubble Blog said...

The "high" end of the market--$600k and up-- is the sector that's most in trouble in Charlottesville Albemarle. The higher up the price point, the slower the pace of sales.

This is the coming foreclosure / strategic default demographic in this area.

So many would-be high-end buyers, especially if *new* to this area, are going to rent. And when they *do* buy, they're going to get a realistic price.

Case in point - which is going to be more the norm, not the outlier:

From RealCentralVA:

"A house just went under contract in the Bentivar neighborhood. A first look says that the house came on the market at $595k and went under contract in 6 days. If that house sells for $595k, the MLS data will show that it sold for 100% of its asking price. Which isn’t accurate.

The house first came on the market in February 2010 for $1,100,000.

Reduced to $835,000

Came back on the market at $833,000

Reduced to $735,000

Came on the market for $595,000

Went under contract quickly."

Read the whole post

C'ville Bubble Blog said...

btw, Nice to see you, Downtown Envy. Was wondering the other day if you'd bought....

downtownenvy said...

Hi Bubblers! I'll definitely shoot you an e-mail if we get close to buying. I think we may be the biggest real estate holdouts this town has ever seen, LOL!

Anonymous said...

My wife and I would almost certainly be renting in the $1500-$2000 range if we didn't find a deal similar to what downtownenvy has talked about, where we found a great property in a great location that we were able to make substantial negotiations on since the owners were "lifers".

Frankly I'm not sure any home purchase is a "deal" right now outside of a foreclosure if the economy doesn't turn around.

craigger said...

I'm digging the new format. Nice happy blue sky. The RE future is Cville is looking a little more cloudy however. Some of my friends have gotten there 80% of asking price offers accepted recently. But only if there was a ton of equity in the house.

John Doe said...

Craigger, wondering if you'd care to disclose price points for those who sold. And *why* were they selling? Moving up or moving out?

Yep, it's a beautiful some RE listings, eh? But the truth is, skies are cloudy with a prediction of significant recurring microbursts as negative equity pushes more folks to either taking a loss at Closing or sliding into foreclosure b/c they can't unload the house. And the pricier the property, the more this is likely to happen in 2012 and 2013.

craigger said...

Recent sales were at 400k vs 525k ask and 170k sale on a 220k ask.