Friday, September 30, 2011

Now Asking $153K - 2218 Banbury Street, Charlottesville: Neg Eq Leads to Foreclosure Then Relisting At 45% Discount

After "chasing down the market" for months with small price decreases, 2218 Banbury Street, a rancher in the City, is a classic tale of negative equity leading to foreclosure--and dragging all the neighbors underwater simultaneously.  Negative Equity is a plague in Virginia, and it's increasing in Charlottesville Albemarle.   

Despite the loss of home value around it, this house is now priced at "fair market value"--meaning the mortgage is the same as what it would fetch for monthly rent ($1000-$1200).

A couple of houses on Banbury Street sold for $225-$235k in 2010/11 And a couple of houses the same size sold for $290k during the bubble.  Those buyers aren't "moving up" any time soon.

Price history:

2007 price $275k
2000 price $190k
The house was lost to foreclosure auction on August 30. 
Today's price: $153k or 45% less than 2007's price.
Today's price: 20% less than 2000's price. 

The house is available from Fannie Mae Homepath.  It may be purchased for  3% down, and if it goes under contract by Oct. 30, Fannie Mae will pay 3% in closing costs.  It's eligible for a reno-only loan, so it does need some work.

The old listing, via/copyright Trulia:

Thursday, September 29, 2011

VIDEO: Is Owning a Home Still Part of the "American Dream?" Or Is Renting a Home A Cheaper, Faster Way to Achieve That Dream?

Nationwide, homeowners have lost 28% of their wealth since 2005 due to the burst of the housing bubble.  In this area, folks have lost millions on foreclosures and negative equity.  Makes renting seem attractive...especially when you consider:
Here's a video with MSNBC host Dylan Ratigan and author/thinker Richard Florida about what the housing bust means for the economy, for job mobility, and for the class structure of American society.

Wednesday, September 28, 2011

Foreclosure - 417 9th Street. 2007 Price: $435k. 2011 Asking Price: $300k.

This 3 bd, 2.5 bath ca 1925 rehabbed house is in the 10th and Page section of the City of Charlottesville, and it has been repeatedly listed for foreclosure auction over the past year, before going back to Fannie Mae on Aug. 25.

10th and Page is one of the most poverty-stricken areas of the City, but in the heydey of the bubble, there was a hope that it could be "gentrified" like Belmont.  Never happened.  This particular house was purchased by a flipper for $117k in 2006, and resold in 2007 for the jaw-dropping $435k.  The debt at foreclosure was  $348k.

Now that the housing bubble is over, property values in 10th and Page have plunged (like everywhere else) tho if you drive on 10th St you still see the Smartee-colored houses that were optimistically built back then in hopes of making it a "mixed income" area.

Now who is going to pay $300k to live in this neighborhood?  Importantly, who is going to appraise this house at $300K? Apparently, Fannie Mae?  Fan will also let buyer do 3% for downpayment, and will pay buyer's closing costs.

Images copyright City of Charlottesville and Google Maps.

When Did the Current Recession Begin?

ZeroHedge believes that when the NBER gets around to determining, it will have been some time during JAN - JUN of this year.

Report: Quake Vibrations Shut Down North Anna Nuclear Power Reactors; Permit Process For Reactor #3 Moves Forward

Dominion Power states it has found that the vibrations from the Aug. 23 5.8 earthquake caused the reactors to shut down, not a loss of external power at the facility.  The plant remains under investigation by the NRCRead.  And some permits needed to move forward on controversial Reactor #3 have been granted.

There was a protest outside Dominion's headquarters in Richmond on Tuesday, September 27.   Let's hope that fella in the picture, above, isn't a prophet.  Read.

Louisa Housing Market: Sales Drop 50% on Shaky Earth and Economy

Photo copyright Media General.

Tuesday, September 27, 2011

1 in 5 Charlottesville Families Can't Pay Their Bills: The Chamber of Commerce Notes the Best Way Out of Poverty is Through Jobs

The  "Greater Charlottesville Area Development Corporation"--the "charitable" arm of the Charlottesville Chamber of Commerce--has conducted a study showing:
  • 1 in 5 families can't pay their bills
  • 1in 3 families can't afford the costs, such as child care and transportation, to keep a job
Then the Corporation came up with some Solutions:
  • "To address the issue, the community needs to support local companies that would locate within the city near the needy populations and provide jobs from manufacturing to construction to services"
  • "Provide jobs that do not require college education but provide a living wage"
  • "A Local Job Hub" to match workers with jobs.
All of this sounds fantastic.  Until you realize that this is exactly what's happening in the entire United States--and businesses, as well as municipalities, just don't have extra $$$ to make these type of socialized programs happen.

The Charlottesville area economic environment remains weak: 
  • Private sector employment has vanished--and is not coming back any time soon.
  • Local and State unemployment is rising. 
  • While there are several major employers in this area: UVA, UVA Health System, Martha Jefferson Hospital, NGIC/DIA, State Farm Insurance, all of these institutions have recently, or will be, cutting back (or cutting even further).
As mentioned in a recent post about the growing gang problem in Charlottesville and Albemarle, poverty in this area is entrenched and generational.

Police Say the Gang Problem In Charlottesville and Albemarle is Growing. Again.

Gangs are a part of being a "World Class City"--the motto for the City of Charlottesville.  In the City, the poverty rate (27%) exceeds that of Washington, DC.   The Charlottesville area has vast swathes of institutionalized poverty--the housing projects clustered around downtown (Friendship Court, Westhaven) etc.--and with rising local and state unemployment--and private sector jobs vanishing--and 1 in 5 families unable to pay their bills--and the future not looking so bright---well, there it is: Gangs.  

Sunday, September 25, 2011

20% Down Payments Unlikely Until 2013...If Ever

The Housing Bust won't be "over" by 2013 (shadow inventory, global recession of 2012, etc.) But even if it were, that's the earliest that the 20% rule might go into effect.

Six Federal agencies -- The Federal Deposit Insurance Corp., the Treasury’s Office of the Comptroller of the Currency, the Department of Housing and Urban Development, the Federal Reserve, the Securities and Exchange Commission  -- are currently wading through 12,000 comments filed on the subject.    Read.  Right now, rates are at historic lows, hovering around 4%; some lenders will offer the lowest mortgage rates based on credit score, not % of downpayment.

Friday, September 23, 2011

One Month After the Earthquake, How's the Louisa County Housing Market?

Before the August 23 magnitude 5.8 earthquake hit the East Coast, epicenter Mineral in the County of Louisa, Virginia, the housing market was already struggling.  Louisa County is rural, agricultural, and between Henrico and Albemarle Counties, where many commute for work, and has a population of about 33,000.

As of July 31, completed home sales were down 30% over 2010 (which had been greased w/homebuyer tax credit): 104 in 2010 v. 74 in 2011.  It's an area that has seen home prices decline and many foreclosures.
  • There are currently 212 homes on the market, ranging from the modest mid-five figures to a 500 acre spread w/ ca 1850 home for $2,895,000.
  • Between 8/23 and 9/23, 16 homes went under contract.
  • This is 50% less than last year at the same time, which saw 30 homes go to contract.
  • However, pending sales were also low in May, June, July  (see "pending" on chart at bottom).  8/23 to 9/23 overlaps two calendar months.
But is it the tough economy--we've never left Recession--or these factors impacting home sales? 
  1. Major Earthquake and continuing aftershocks from a previously unknown fault.  Since earthquakes are unpredictable, there's no guarantee that there won't be more seismic activity, since Louisa is in the Virginia Seismic Zone.
  2. Nuclear Activists continue to call the safety of North Anna Nuclear Power Plant into question.  It has not been restarted.  There are 8 miles of underground pipes.  The NRC continues its surveys at the plant.
  3. Schooling: condemned High School and elementary school have resulted in shuffling and sharing.
Then again, any buyer who's concerned about #1 and #2 is going to cross off Western Henrico and Eastern Albemarle as viable places to live, including Keswick and Glenmore.

Louisa's numbers:
 Chart is copyright Charlottesville Real Estate Talk.

2548 Garth Road - Grand Home on 50 Acres - Price Reduced $1M

Purchased in 2000 for $1.75M
Assessed at $3M
Beautiful home on 50 acres in Western Albemarle. 
Image copyright Trulia.  Click on it for larger version in new window.

512 Paton St. - New Construction in the City - Price Reduced $50k

In the area behind the UVA hospital, off Cherry Avenue.  Original list at $249.9k.

Image copyright Trulia.  Click on it for larger version in new window.

Wednesday, September 21, 2011

Halsey Minor Hopes a Charlottesville Bank Will Finance the Landmark Hotel

It would be great to see the 3 1/2 year old eyesore replaced with beauty.   But what Charlottesville bank has the $$$ for this?  Nevertheless, Minor is confident the hotel will be finished and will become one of the 'top 25 boutique hotels in the country.'

$1.75M Equestrian Property in Keswick Scheduled For Foreclosure This Afternoon, Owned By "Keswick Acquisitions LLC"

The auction is scheduled for 2:15 pm today at the Albemarle County Court House.  Foreclosures are subject to change without notice. The  property is located near Castalia Farm at 5400 Gordonsville RoadThe image is copyright Zillow, from an old listing.  Tax assessment is 100's of thousands less.

The owner is listed as "Keswick Acquisitions LLC."  Which is...?

Other troubled, lost properties at the high end:

Once Priced at $100M, Albemarle House Goes to BofA for $15.3M 
Donald Trump Buys Foreclosure Auctioned Kluge Estate Winery
Bundoran Farm Acreage: Purchased for $33M, Bank Eats Loss and Pays $7.5M
Bundoran Farm Manor House
Biscuit Run Bailout

What is "Operation Twist," And What Does It Have to Do With Mortgage Rates?

The Federal Reserve (FOMC) concludes an unusual 2-day meeting this afternoon, and the expectation is that they'll announce America is a declining empire signal the use of "tools" to help the massive debt issues and structural unemployment crisis.  The upside to the crisis is historically low mortgage rates, now about 4.09%.  Nevertheless, few folks are willing or able to take advantage and housing remains moribund.  The green line in graph 2 helps explain why mortgage rates are so low.

Tuesday, September 20, 2011

Are "Normal" Sales, Where the Seller Has Equity, Fading Away? Or, "Sell Now"

The other day we posted on the huge number of Virginia homeowners who have negative equity--they owe more than the house is worth.  Virginia is #8 in the United States. 

In 10 major metro areas, sales funded through mortgages declined by 60% from 2005-2010.

The housing market keeps morphing into a transactional morass that nobody has seen before, nor been able to anticipate.  And we're posting this interesting article because what happens in large markets eventually trickles down to this one...about two years later. And because the US economy is faltering on the back of the housing debacle and structural unemployment.  What happens in Peoria and Long Beach impacts us all.

Wednesday, September 14, 2011

A True Measure of Trouble In Charlottesville Area Housing Is Negative Equity, Not the Number of Foreclosures

The latest data from CoreLogic shows that the Charlottesville Area's foreclosures are (once again) up 25% from the same time last year.  When reported by local media outlets, online and on air, NBC29 and Newsplex reporters pointed out 'The Charlottesville rate is lower than the national rate.'  

And a recent Hook story on the drastic decline in midsummer home sales also tried to reassure readers with the same comparison.

But this is cold comfort: there are many more homeowners in trouble due to Negative Equity. 

Virginia is #8 on the national list for mortgage holders owing more than the house is worth. Nearly 30% of Virginians are in this dire predicament.

Those who bought 2004-2010 in this area are now "Underwater," since homes are now selling for much less (Here's the City as an example of dropping prices.).

Of the 1.3 million homeowners in the Virginia with mortgages, almost 305,000 owe more than the house is worth.  Nearly 80,000 are within 5% of being underwater.  On a $300k mortgage, that's $15k--and wipes out 4 years of mortgage payments. 


  • It leads to more "Short Sales "--where bank agrees to take less than what is owed (a big hit to credit score)
  • It will lead to higher foreclosure rates in 2012 and 2013--especially for those  at the $600+k price points, where there is a local glut of unsold inventory (a big hit to credit score)
  • If owner *does* sell w/out bank intervention, it involves a significant loss of $$$, often brought to Closing
  • It is difficult or impossible to ReFi
  • It prevents "Move Up"--going to a larger house to accomodate growing family (or, conversely, downsizing)
  • It may inhibit job mobility
  • It leads to "Accidental Landlords"
  • It reduces consumer spending power--no home equity line of credit
  • It prevents big plans--like redoing the house or financing a college education
Foreclosure rate, from CoreLogic:

The Top 14 States With Negative Equity

US Poverty Rate 15%, Highest in 50+ Years; City of Charlottesville Exceeds This By At Least 10+%

National shame.  And local shame.

Unemployment and the underemployment remain the national crisis.

Charlottesville may have a lower employment rate than nationally, but unemployment is rising.  Too, there are folks living in poverty who are not counted as unemployed--they're not part of the statistical workforce.

In terms of the national outlook, this year is not going to be any better, economists say:
Another 2.6 million people slipped into poverty in the United States last year, the Census Bureau reported Tuesday, and the number of Americans living below the official poverty line, 46.2 million people, was the highest number in the 52 years the bureau has been publishing figures on it.
And in new signs of distress among the middle class, median household incomes fell last year to levels last seen in 1997.

Tuesday, September 13, 2011

NRC Says No to Dominion Power's Rapid Re-Start of North Anna Nuclear Power Station

Nobody knows why the nuke plant shut itself down moments after the 5.8 magnitude earthquake struck the East Coast, shaking it twice as much as it was designed to withstand, on August 23.  Despite this, Dominion Power hoped to restart the plant, 11 miles from the quake's epicenter, on September 22.  

The NRC has committed itself to reassessing earthquake risks at nuclear plants.

In terms of North Anna: 'Not so fast we're not done,' says the Nuclear Regulatory Commission.  

Dominion has a theory on why the nuke shut itself down, but it is unconfirmed:
Dominion officials said it now appears the reactors shut when the earthquake caused a problem inside the cores at both units rather than from the loss of outside power to the plant as initially reported.

"It looks like the (fuel) rods were going into the core prior to the transformer opening," possibly from a relay problem, a Dominion executive said.

Monday, September 12, 2011

Sunday, September 11, 2011

10 Years Later, In Memoriam.

Friday, September 9, 2011

Fact Sheet For The American Jobs Act Includes A Mention of Mortgage ReFi's

President Barack Obama gave a speech tonight designed to rally voters save the economy make it seem like he cares as much about the citizenry as pleasing Big Banks.

Mortgage ReFi's at 4% are included in the plan under "More Money In the Pockets of Every Worker and Family."  The hope is to extend HARP, the Home Affordable Refinance Program, so that more folks qualify.  When costs are outlined on the final page of the fact sheet, however, no $$ is mentioned.

The details of the American Jobs Act may be found here.

Thursday, September 8, 2011

NRC: 5.8 Earthquake Caused 2x As Much Ground Shaking As North Anna Nuclear Power Station Designed to Withstand

Dominion Power execs are scheduled to meet today with NRC officials to discuss the impact of the August 23, 5.8 earthquake that shook the East coast.

The plant endured more quake movement than it was designed to withstand, according to a preliminary federal analysis:
Parts of the North Anna Power Station in Mineral, Va., 11 miles from its epicenter, endured jolts equal to 26% of the force of gravity (0.26g) from some of the vibrations unleashed by the quake, said Scott Burnell, spokesman of the Nuclear Regulatory Commission.

An NRC document says the reactors' containment structure was built to withstand 12% of the force of gravity (0.12g.)

Dominion, the plant's operator, says parts of the plant can handle up to 0.18g.

"It's the things inside the buildings that may have been shaken more than the design called for," Burnell said, adding the buildings themselves appear to have been less affected. He said the analysis is based on a seismograph reading taken about 30 miles away by the U.S. Geological Survey.
The North Anna Nuclear Power Station remains "offline"--not working--since nobody knows why the plant shut itself down moments after the earthquake began.

17 ton storage casks holding spent nuclear material moved up to 4 inches; the public was notified 9 days after the quake.

Nuclear power watchdogs say that leaking tritium from underground pipes may be the biggest threat to Louisa residents and that Dominion should be distributing bottled water indefinitely. 

On 9/1/2011, Dominion power affirmed its intention to pursue Reactor #3 at North Anna.

Today (Sept. 8) NYT gives background on the plant and the recent earthquake.

Wednesday, September 7, 2011

UPDATE - 1320 Kenwood Lane - 2009 Asking Price: $1.1M. 2011 Selling Price: $565K.

Whatever happened to 1320 Kenwood Lane, Charlottesville?   In  October 2009 we wondered How Do You Put a Price On a Labor of Love?  This was after the price had already been reduced.   

The house finally found new owners for 49% less than the original asking price: $1.1M to $565k in July 2011, after being on the market for over 2 years.  This awesome house has always attracted a lot of notice, and was featured in Cville Abode.

This house in the Greenbrier neighborhood appeared is nestled among brick ranchers, convenient to the 250 Byp and the new Whole Foods and, one day, the City's portion of the MeadowCreek Parkway.

1320 Kenwood Lane
4 beds/2 baths, 3170 sq feet

Some Price History:
Prior April 2009 : $1.1M
Prior to May 2009 - $998K
June 2009 -  $899.9K
October - $799k

The house was relisted in 2010 and in 2011, and it changed real estate agencies as well.

City Assessment: 
This is a number that essentially gives zero information on the individual property, and is largely irrelevant to buyers.

2009: $408k 
2011: $526k

Photo: City property records.

Friday, September 2, 2011

US Will Sue Big Banks Over Housing Bubble Mortgages

The Federal Housing Finance Agency (FHFA) which oversees giant mortgage lenders Fannie Mae and Freddie Mac will file in federal court.  Bank of America, JPMorgan Chase, Goldman Sachs, Deutsche Bank and more will be accused of misrepresenting the quality of mortgage backed securities.  The US will seek billions of dollars in compensation.  From NYT:
The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors, failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value.

Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers.

Private holders of mortgage securities are already trying to force the big banks to buy back tens of billions in soured mortgage-backed bonds, but this federal effort is a new chapter in a huge legal fight that has alarmed investors in bank shares. In this case, rather than demanding that the banks buy back the original loans, the finance agency is seeking reimbursement for losses on the securities held by Fannie and Freddie.
  Read More.

Thursday, September 1, 2011

City of Charlottesville: Home Price Declines In the Double Digits From Peak of the Bubble

The following price data is for detached, single-family homes in the City of Charlottesville.   It shows declines by month; this market is particularly seasonal, and follows the school year.

Previously, we've posted the graph showing the decline in sales, back down to levels not seen since the 90's.  (Graphs also included at bottom of post).

The following price data comes from RealCentralVA, in a post which includes much data for the City of C'ville, including that median price for all property types combined declined -29% inJuly 2011 over July 2010.

Single Famly Home median price declines by month:

Left Number is for the year listed.  Right number is 2011. 

Jan  2008 $292k  to $260 = -10%

Feb  2008 $339k to $180 =  -47%

Mar  2010 $334k  to $261k = -22%

Apr  2007 $335k  to $255k = -24%

May  2007 $306k  to $245k = -20%

Jun  2007 $333k to $265k =  -21%

Jul    2010 $310 to $260k =  -16%

With a median decline of 21% for 2011 thus far, there's still plenty more room for prices to come down before this market has "corrected."  And by "corrected" we mean the market is balanced--as many buyers as sellers.  (O--wait--that may not happen for decades....)


The following months are peak compared to 2010 (will be updated as months in 2011 complete)

Aug 2008 $351k to $303k =  -14%

Sep  2006  $325 to $219k =   -33%

Oct   2007  $350k to $240k = -31%

Nov  2008  $352k to $277 =   -21%

Dec   2007  $375k to $310k =  -18%

Median decline for 2010 from peak: 21%.  Nb:  The last five months of the year are the "slow" period.  So what's going to happen to home prices for those who want to sell now?

Notes:  There was a Federal Homebuyer Tax Credit in place 2008 - June 30 201.  When it ended, home sales tanked. The "low end" of the City market is selling, and is seeing significant price decreases.  The $600k and up sectors of the market are barely selling, and there is also more resistance to price cutting.  There will be more aggressive price cutting over the Winter and into Spring 2012.  The buyers just aren't here.  At the lower levels, it is now possible to buy a brand spankin' new house out in Albemarle County for $250k and up...and the older housing stock in the City can't compete.

The above numbers come from the below chart, copyright RealCentralVA.
Click on image for larger version in new window
Another way of looking at the same  data, via RealCentralVA:
Click on image for larger version in new window

SALES: Charlottesville Single Family, Detached Homes Jan-Jun 2000-2011
Click on image for larger version in new window

Charlottesville Single Family, Detached Home Sales Full Year 2000-2010
Click on image for larger version in new window