Monday, February 28, 2011

January 2011 Pending Home Sales Decline

Fewer people signed contracts to purchase in January 2011, according to the NAR, if the data can be considered reliable:
New construction home sales, which are transactions reported by the US Census Bureau, declined significantly in January 2011.

Friday, February 25, 2011

National New Home Sales Drop A Shocking 11.2% in January 2011

Sales are now down 80% since the peak in July, 2005.  BTW, new home sales information comes from the US Census Bureau,  not from the data-drifting National Association of Realtors.
Image copyright CNN.

Fannie Mae and Freddie Mac Lost $41.5 Billion of Taxpayer Monies in 2010

...And of course Fannie and Freddie both want more money.  The giant mortgage losers were placed in "Government Conservatorship" in September 2008.  The two, plus the FHA , currently own or back more than 92% of all new mortgages.   The Obama Administration is making noise about doing away with them...years from now.  This is a socialized housing market at its finest...or at its worst, depending on where you're sitting while contemplating the issue.

Thursday, February 24, 2011

NAR Admits to Data "Drift" Which Led to Overstating Home Sales By 1.6 Million in 2010

As Yale economist Robert Shiller of the eponymous Case-Shiller Home Price Index worries there is a "substantial risk" that home prices are going to fall another 15, 20, or even 25%, the National Association of Realtors is admitting that there may be some "drift" to its "data," as well as methodology issues which has led to overstating home sales by 13% in the last revision to data going back to 2000. 

This lack of accuracy--and transparency--means, of course, that the housing market is in much worse shape than anybody can know.  

And, unfortunately, so is the reliability and reputation of anybody who is associated with the The NAR, which is the largest trade organization for real estate sales people.  Of course, there are plenty of honest, ethical folks out there, but the "mothership" isn't looking so good.  Consumers have doubts, and rightly so.

Look at the numbers presented as most buyers--and sellers--need them to make informed decisions: Has the NAR No Shame?

Then read what NAR economist Lawrence Yun says about the numbers.


Wednesday, February 23, 2011

Martha Jefferson Hospital Offers 26 Properties For Sale at $11 Million

The Downtown Charlottesville parking lots, vintage medical office buildings, and antique houses, plus some contemporary office condos at "The Randolph," may be viewed at the CB Richard Ellis site.  The realty company hopes to get bids by their stated deadline of April 20.  MJH hospital is expected to have relocated to Pantops by August 2011.  Read. 

The MJH hospital building and land was sold to Octagon Partners in September 2010 for the lower-than-expected price of $6.5 Million, which caused some market watchers a bit of shock.  The company is apparently in negotiations with a large tenant, and hopes to develop the parcel.

The Latest News on the National Double Dip in Housing

Local Realtors recently became aware of what buyers have known for some time: prices are still going down and have a couple decades to wallow before "value" is "regained."

Tuesday, February 22, 2011

Friday, February 18, 2011

Thursday, February 17, 2011

The Year 2023: Montague Miller Tells Home Sellers This Is When Bubble Prices Will Return

If you're considering lising, the local realty company says, here are 5 Reasons To Sell Your House Now.  The top reason is that pricing won't return to pre-2007 figures until 2023.  

It's interesting that Montague Miller's blogger uses this data nugget now, as this pricing info was big news in 2009. 

66% of all 2010 home sales in this area were First Time Homebuyers, so this is part of the local effort to get "move-ups" back into the market.

Housing Crash Now Hitting Markets That Remained Stable After Bubble Burst

The housing crash is now spreading to cities once thought to be immune.
The bubble markets, where builders, buyers and banks ran wild, began falling first, economists say, so they are close to the end of the cycle and in some cases on their way back up. Nearly everyone else still has another season of pain.
The above is from a recent NYT article that tracks what's happening in Seattle, and quotes Stan Humphries, chief economist for housing site Zillow:
Mr. Humphries estimates the rest of the country will drop a further 5 and 7 percent as last year’s tax credits for home buyers continue to wear off.

“We went into 2010 feeling gangbusters, thanks to Uncle Sam,” Mr. Humphries said. “We ended it feeling penniless, with home values tanking.”
Another 5-7% decline in the C'ville area may be the best case scenario.

The article highlights underwater sellers: 
Megan and Ryan Dortch tried to sell their one-bedroom Eastlake condo for $325,000 two years ago. They rejected an offer of $295,000 as inadequate. A year later, they relisted it for $289,000, then $279,000, which was less than they paid. Without a sale at that price, they could not afford to buy a place big enough for them and their new baby. 
They have given up on real estate. They are renting out their old apartment at a small loss every month, and living in a rented house.

Add to the perils of the current market:
But whenever the market finally does pick up, all those accidental landlords will want to unload, putting another burden on the market. “So many sellers are waiting in the shadows,” said Redfin’s chief executive, Glenn Kelman. “The inventory is going to expand and expand and expand. I don’t see any basis for significant price increases.”
And from a related article--the following resonates with familiarity: 

"There is no such thing as a market price that cannot fall," writes David Leonhardt in his NYT piece, from which the above was excerpted: "Seattle's Foreseable Housing Bust,"

All of this sounds like the Charlottesville Albemarle area, albeit on a larger scale.  Buckle up.

Related:
Is the NAR Inflating Home Sales By 15-20%?
Sell Now: Local Realtor Warns Bubble Prices Won't Be Back Until 2023

UVA Study: 1/4 of Virginia Residents on Brink of Poverty

According to the Weldon Cooper Center for Public Service at University of Virginia:
  • 1/4 of households are on the brink of poverty
  • 1/4 additionally earn too little money to meet basic needs
  • 33rd worst ranking, nationally, for securing affordable homes
  • 19th highest rate of bankruptcy
The sunshine in the article:  the state has the 39th lowest poverty rate, and the 42nd lowest unemployment rate.  But "Employed" doesn't necessarily mean "comfortably" or "moving up" the economic ladder.  The United States is wallowing in a state of decline as taxpayer monies are funneled toward the top wealthholders in the Country.

Related:
Virginia Food Stamp usage rose again in 2010, and the Blue Ridge Area Food Bank has seen a 77% increase in usage since 2007.

Wednesday, February 16, 2011

$15.3M: Bank of America Takes Back Kluge's Albemarle House at Foreclosure Auction, Refuses Trump's Offer

UPDATE 2:  Donald Trump has an interest in acquiring some of the former Kluge properties.  He bid $3+ M for Albemarle House, and $1M for Vineyard Estates, the failed mansion development.


UPDATE:  B of A "paid" 33% less than what Kluge "owed": $15.3M v. $22.3M.   Bargain priced. 

Original Post, 7am:  "Bank of America Takes Back Kluge's $23M Albemarle House in Foreclosure Auction"

The headline has quote marks because this is the likely outcome of the foreclosure auction scheduled for 11am today on the steps of the Albemarle County Courthouse.

Albemarle House was once priced for the 22nd Century at $100 M, then tried to chase down the local luxury market with price reductions.  The estate sector in this area is dead dormant, and the effort was futile.  

Patricia Kluge and her husband Bill Moses  lost "Vineyard Estates" to Sonabank on January 31 2011, and Kluge Estate Winery was repossessed by Farm Credit on December 7, 2010.  Kluge and Moses are said to owe $86K in back taxes to Albemarle County.  And the contents of Albemarle House are under separate lien.

Kluge and Moses have lots of company in foreclosure-ville, at all price points.

Still unresolved: Fuel Restaurant/Gas Station/C-Store at 901 E Market Street, with "Price Reduced" signs plastered on the windows.  Once priced at the negative ROI of over $1M, it remains unsold, like the majority of commercial property for sale in the Charlottesville Albemarle area.

Friday, February 11, 2011

Obama Admin Wants to Get Out of Mortgage Business...In Five Years or So

The FHA, Fannie Mae, and Freddie Mac now own or guarantee 90+% of new mortgages.  And they've done so since the latter two were put into government conservatorship in September, 2008 in lieu of failing.  2 million foreclosures are expected this year, adding to the 7 million foreclosures since 2008.  27% or 15.7 Million of all mortgageholders now owe more than the house is worth.

But while the Obama Admin has taken many steps to privilege and protect TooBigToFail Banks and Banksters by spreading their billions in failure to taxpayers, apparently it's time to Make Some Noise About The Issue.

However, this Treasury "white paper" doesn't make even one recommendation to stop the bleeding.  Instead, it lays out three possible scenarios for putting mortgage lending back in the hands of banks. 

The essential problem with Fannie and Freddie?  Can't live with 'em, can't live without 'em.  It's a peculiar quandary posed by The Real Estate Industrial Complex:
...those who own a home, mortgage or not, want the value to remain as high as possible, lest they lose their investment or even go underwater.  While those looking to buy a home are told that without the Fannie/Freddie blank check guarantee system, they'll never be able to purchase one.

Thursday, February 10, 2011

Should You Walk Away From Your Underwater Mortgage? These People Did

According to Zillow, 27% of all homeowners are "underwater"--they owe more than the house is worth.  Those with $1 Million+ mortgages are more likely to default.   

Homeownership in the US has now fallen to its lowest level since 1998 More folks are choosing to rent rather than to buy.  And the housing problem isn't going to turn around any time soon.

The Huffington Post set out to find out what happens to mortgage holders considering strategic default.  They followed 48 people for a year, and provide the results in "Learning to Walk: Fear, Shame, and Your Underwater Mortgage."

Dylan Ratigan, an MSNBC host who is a highly vocal bankster critic and consumer advocate, got in on the story, interviewing one of the subjects from the article.

Visit msnbc.com for breaking news, world news, and news about the economy
 

Wednesday, February 9, 2011

That's $10,000,000,000,000.00

Charlottesville Albemarle Sales Tax Revenues Remain Below Pre-Recession Level

Perhaps this the "new normal":  consumers spending less.  And/or it shows a shift toward internet shopping: consumers can have almost (almost) anything (anything?) shipped (overnighted)--for free--and often no sales tax--and often for fewer dollars--right to the front door.  Read about local revenues.

On Property Tax Assessments: Some Opinions for the C-VILLE, and Some Links


 C-VILLE, the news and arts weekly,  asked the bubble blog for a take on Charlottesville and Albemarle  2011 Property Tax Assessments as they pertain to the housing market.  

This blog also recently posted on the topic:  Charlottesville and Albemarle Property Tax Assessments Decline Again.  Even So, They Mean Little to Buyers.

While many will say "all real estate is local," others say "not any more," since it was real estate that dragged the entire US (ok, the globe) to the brink of Depression.  So below are some pertinent links referencing topics discussed w/ c-ville

Note: People need houses, and they'll continue to buy.  Prices soared here, however, and are now dropping; how much they're dropping varies by sector.  There's more pain to come in the wider housing market.  This area started its decline later, and will probably end its decline later, too.  Is 2013 the price bottom (a number mentioned to c-ville)?  

When prices drop, buyers have to keep in mind that even small decreases make big differences in mortgage debt.   

Reputable local Realtors now tell clients they should plan to stay in the home 7-10 years to absorb potential loss.  

Reputable Realtors don't focus on low mortgage rates or monthly payments when a client is taking on a 30 year debt.

Links:

-The Stock Market keeps rising and a (weak) economic recovery is underway.  But this is disconnected from the housing market. 

-The National Double Dip: home prices declined for the 5th straight month and YoY 5.46%.  Declines are noted in wider markets.

-US Home Prices Reverting to Long-Term Mean? Check out the Chart. 

-Mortgage rates are about to go above 5%.  That's not a bad thing.  Prices come down when rates go up, b/c buyers only have so much to spend. 

For Charlottesville Albemarle Area Real Estate sales:  
  
Population Increases Steadily, But Homebuying Does Not
CAAR 2010 Market Report
Forecast for the Charlottesville Albemarle Market

66% of last year's buyers in this area were at the "first timer" price point of $300K or less.  These people qualified for the Federal Homebuyer Tax Credit.  Sales from July-December plunged.  Who will buy this year?  

Note: a similar post appeared on Tuesday, Februay 8, but was removed due to technical issues.

Monday, February 7, 2011

The 2010 Census: A Decade Of Steady Population Growth, But Declining Home Sales in Charlottesville and Albemarle

The City of Charlottesville now has a population of 43,475, or 8.4% growth over the past decade.  However, single family home sales are 10% lower than in 2001. 

The City of Charlottesville seen a 12% decrease in the public school population, which the City Superintendent recently attributed to the overpriced housing market.

Albemarle County's population has increased by 17.6% / 14,784 people over the past decade, to a total of 98,970.  Albemarle County single family home sales in 2010 were up slightly over 2009, thanks to the Federal Homebuyer Tax Credit and the large number of foreclosures for sale.  However, sales dropped off a cliff after April 30, when the tax cred expired.

The 2010 Census Bureau data shows both the City and County experienced population growth in the past 10 years at an average annual rate of 1.4%.  Yet since the peak of the bubble and its bust, bringing about the "Great Recession" and the rise in local unemployment, ownership rates in the "American Dream" category of the single family home has taken a hit.  Also to blame: high prices, tight credit, and that reputable Realtors now advise homeowners that they should plan to stay put 7-10 years after purchase.  VA's housing authority sees "recovery" a few years away.

Friday, February 4, 2011

UPDATED: Home of the Moment: 910 Rougemont Ave - Collateral Damage From the Charlottesville Housing Bubble

Updated Februay 4:  
The price of this home is based on tax assessment, as per listing.   Tax assessment for 2011 dropped nearly $20k.

Original post, January 19
This is the saddest  listing in Central Virginia:
"Property must sell at assessed value to satisfy nursing home eligibility.  Pluses include: off street parking, hardwood floors and new furnace and hot water heater but overall condition of property is poor."
910 Rougemont Avenue is a tiny bungalow in "lower" Belmont ( (not the "trendy" part), a neighborhood in Charlottesville.  It was listed for sale Tuesday, January 18.  941 sq feet for $210,200: that's a bubble price of $223 per sq foot; average p/sq/ft now is $140.  MLS #484357.  The current owners paid $16,400 in 1967.

Tax assessments in VA are based on "fair market value"--what a property would fetch in an "arm's length transaction" without external duress.  Since this market has a huge inventory and prices are falling, most buyers see tax assessments as 'wishful thinking.'


The listing certainly does answer that perennial question: "Who sets the price?  Seller or Agent?"  Apparently the answer in this case is neither.  Mary Newton of Keller-Williams presents this listing. 

Not only are single family home sales in the City of Charlottesville at a decade-low (reports abound of current sellers panicking), but this house faces stiff competition just next door and down the street: houses with lower prices for better condition and twice the square footage.  

Best wishes for this one.

Click on images for larger versions.

The listing for 910 Rougemont:

The "competition" - 900 Rougemont Ave - $199,900

The "competition" - 912 Rougemont Ave - $164,900
Related Reading
2010 Was the Worst Year in the Cville Area Housing Downturn--Thus Far 

Images copyright CAAR and Trulia.com

Thursday, February 3, 2011

December 2010 Unemployment in Charlottesville Area Eased Slightly By Holiday Hiring

Any time folks get employed, even temporarily, it's good news.  But bad compared to bad is still bad.  Cville Metro Area unemployment was at 3% in 2008.

Thus, today's headline glosses over reality in December 2010:
Area Unemployment at Two Year Low

The Headline last month was a little more realistic for November 2010:
Area Jobless Rates Mostly Hold Steady

For more on reading beyond headlines, see this.

Overpriced Housing Market Blamed For a Decade of Declining Enrollment in Charlottesville City Schools

Former CAAR prez Greg Slater said, "It can be challenging in those price points above the condominium, but below the $400,000 or $500,000 range, if you are looking for a home."

Enrollment has declined 12% since 2001 in the City; it has risen 5% in Albemarle County.  The national median price for a single family home in 2010 was $165k.  In Charlottesville, the median price in December 2010 was $310k.  Read.

Food Stamp Usage Rises Again, Now at 10.5% of Virginians

A year and a half after the Great Recession "ended," the number in the Commonwealth has increased to 837,005 people, up 1% over 2010.  In the United States, 43 Million use Food Stamps, according to the US Department of Agriculture.    Last year's figures soared 40%-75% in this area from 2007.

Tuesday, February 1, 2011

Charlottesville Albemarle Property Tax Assessments Decline Again: Even So, They Mean Little to Buyers

Prediction: Charlottesville Albemarle area property tax assessments continue to decline, and this year, they'll be dropped from RE sales listings.

Declining Property Tax Assessments: Cville here.  Albemarle here.
Remember that mantra, "Charlottesville is a protected market"?  Nobody uses it any more, at least, not with a straight face.  After sliding since 2006, 2010 was the area's worst year of the housing downturn thus far.  See the ouch.  And more ouch.
Here are just some of the reasons why property tax assessment figures mean more to sellers than to buyers:


*"Fair Market Value": While Tax Assessments are supposed to indicate what a property would sell for at an arm's length transaction--the numbers don't take into account other factors, including how few sales there actually are.

 *Albemarle County flags foreclosures as "invalid sales" in Tax Records--the lower sales prices don't get calculated into "fair market value."  As Fannie Mae Homepath and Bank of America foreclosures are the fastest sellers in Albemarle County, excluding these serves the purposes of the County's money needs--not the homeowners tax bill.

*Tax Assessments are not appraisals: the assessors don't visit every property--they only go inside when the figure is challenged.

*Of course, assessments don't indicate how few qualified  buyers there are.   66% of all 2010 area sales were $300k or less.  This indicates cash-strapped buyers.

*Assessments are divorced from the high inventory (getting higher on a daily basis).  Inventory pushes prices down.

*Property Tax Assessments mean the most to homeowners who are trying to sell because they hope it indicates extrinsic value.

*The "protected market" phrase referred to major employers in the area--UVA, State Farm, DIA, Martha Jeff--indicating there would always be buyers.   Didn't happen.  Still not happening.

*When you think about it, if a real estate agent (and/or Realtor (TM))  is using a property tax assessment as a selling point, they've got nothing else.  Can they actually represent the best interests of a buyer or a seller?



Albemarle County Property Tax Assessment Declines by Magesterial District