Tuesday, February 21, 2012

January 2012 Home Sales: Charlottesville Down -39%, Albemarle Down -15%

Nest Realty Group has released its January Home Sales Report, which is embedded below.  Sales of all types compared to 2011:

Charlottesville down -39% 
Albemarle down -15%
Louisa down -50% (earthquake)
Greene up +112% (due to NGIC/DIA)
Fluvanna up +58% (price collapses have lead to higher sales)
Nelson up +12%

Mortgage rates have been at or below 4% for the past 3 months.

C'ville inventory has increased +44% and Albemarle inventory has increased +22%.  But Nest Realty views lower inventory of the MSA as a positive.  Disagree:  the new normal (and it's nationwide) is due  to this area's prospective sellers understanding they can't unload their current home for what is needed to "move up."  And this area's persistently high--for us--unemployment.

On the upside, Nest notes as a positive the rise in contracts written during January.

Related:   C'ville Area Home Sales in 2011.  C'ville Area Home Sales in 2010.  The "new normal" is lower sales.  Where's the Bottom?

Nest Report Charlottesville: January 2012

Central Virginia Lockbox Activity: Who's Looking At Houses?

Nest Realty Group and associate broker Jim Duncan are reporting that lockbox activity is up for January-February 10.  The lack of winter in Central Virginia this year is certainly helping, as are declining home prices and historically low interest rates under 4% for the past three monts.  But will the lookies turn into closed sales?  Buyer activity was also up in 2009; the current 2012 lockbox activity is lower per listing, since 2009 was a year of Homebuyer Tax Credit.

Caveat, as per RealCentralVA: the graph shows listings are up for the MLS - the multiple listing service in Central Virginia, not the MSA - Metropolitan Statistical Area of Charlottesville, Albemarle, Fluvanna, Greene, Louisa, and Nelson.

Lockbox activity, from Nest. Key: purple = 2012 / rust = 2011/ yellow = 2010
The increase is translating into more contracts written in January, but whether this will translate into closed sales won't be seen until March-April.

Friday, February 17, 2012

Chief Economist / Sr VP of Nat'l Association of Home Builders Tells Blue Ridge Tradesmen That Things Are Looking Up

The trade association economist had words of encouragement for 60 area builders, according to The Daily Progress.  2011 was one of the 10 Worst Years for new home sales.  There's not really anywhere to go but up when we've been at a 50 year low.  

Click on image for larger version in new window.

Thursday, February 16, 2012

How's the US Economy Doing?

The housing data begins at Slide 48, but there's much to look at, from Government Spending to the Eurozone Mess to Inflation to the Stock Market.  Lots to worry about.   Jeff Gundlach, via ZeroHedge.
2-14-12 JEG Webcast Roman Empire - FINAL

Tuesday, February 14, 2012

Lower Inventory in Charlottesville Albemarle Housing Market Follows National Trend: The "New Normal" Is Not A Positive Sign

 Embedded article at bottom of post.

It's been a mantra of Realtors for years that as inventory shrinks, prices will rise.  Locally and nationally, inventory has dropped--but this isn't a positive sign.  Last Fall, as inventory declined, the Charlottesville Area Association of Realtors Q3 report stated:
"This continual float down of active inventory represents progress toward what is considered a balanced, neither buyer's nor seller's advantaged, market..." [emphasis ours]
No.  This area remains a "buyer's market" and prices will continue to decline through 2012 and beyond.  The CAAR was relying on the old paradigm and missed the big picture.  This blog laid out six reasons the decline in inventory was not positive.  The HooK picked up the storyThe WSJ highlighted the issue, too.  And by the end of the year, the local decline in inventory was 20% lower than 2010.

Now RE appraiser/analyst Jonathan Miller highlights the national inventory decline in the article embedded below.

Local and national inventory declines have been due to lack of sellers, and due to the foreclosure moratorium.  Local sales are hovering at levels from the 1990's, despite thousands of new units built since then.  So next time somebody mentions "lower inventory" as a "positive" or "progress," look behind the numbers.  Make sure it's not just an outmoded mantra from a real estate reality that may never exist again.

And  just as inventory decline is highlighted in the national media, we're at the turning point in the year: it's Spring Selling Season. Check out the daily rise, sometimes in the double digits, here.  In 2012, foreclosures will surge drastically.  Short sales are about to increase too, everywhere.

Friday, February 10, 2012

What Does the National Foreclosure Settlement Mean for Virginia Mortgage Holders--and Everybody Else?

49 state Attorneys General have reached a $25 Billion foreclosure fraud settlement with five big banks:  Ally/GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo.

Info for All Taxpayers:
Info For Virginia Mortgage Holders:
  • Video: Va's AG Cuccinelli on Commonwealth Participation.
  • Virginia is #8 of States with negative equity.
  • The Charlottesville Albemarle Area is rife with effective negative equity.
  • The banks have three years to enact relief.  Three years.  Which means that in many cases, they won't have to.
Virginia will get $479.6 M: 
  • $31 M to those who experienced foreclosure abuses from 1/1/2008 to 12/31/2011.  
  • $409 M will be used for principal reduction and mortgage modifications.  
  • $69.6 M will be paid to the Commonweath as penalty.
 What it may do:
  • Up to 15,000 mortgage holders may qualify.
  • Those who have had houses lost to foreclosure may qualify for a payment, spread over three years, of $800-$2k.
  • Mortgage holders who owe more than the house is worth may see their principal reduced by up to $20k.
You can see if you qualify at the National Mortgage Settlement website:
The Washington Post has an easy-to-follow narrative about who may be eligible.
See also Attorney General Ken Cuccinelli's website.

Thursday, February 9, 2012

VIDEO: Virginia AG Ken Cuccinelli Explains Why He Signed On To National Fraudclosure Settlement

The Virginia Attorney General discusses what would have happened if Virginia wasn't one of the 49 states agreeing to the $25 Billion Robosigning / MERS Abuses / 5 Big Banks Settlement.  Cuccinelli accepted $479.6 Million for mortgage debtors who experienced foreclosure fraud; after losing the home, these folks will receive $800-$2,000 maximum payment over a period of three years (you read that correctly). 

For other folks trapped in their homes, the settlement money may also be used to cut principal by up to $20k and refinance mortgage debt.  This could impact up to 15,000 homeowners who owe more on the mortgage than the property is worth.  Almost 30% of mortgageholders in Virginia have negative equity.

Attorney General Ken Cuccinelli

This settlement may help some people stay in their homes, and it will enrage many others.  It is not going to "help" the housing market find its bottom.  

From CNBC: Rochdale's Dick Bove on the "Mortgage Deal From Hell"

The WaPo has details of the settlement.

States Attorneys General, Including Virginia's Cuccinelli, Agree to Let Five Big Banks Off Easy With $25 Billion Fraudclosure Settlement

At the heart of the matter is MERS, the Mortgage Electronic Registration System and the five big banks holding 55% or 27 million active mortgages.  For years, mortgages have been funneled through MERS but they are without the proper titles and liens on the underlying paper.  This settlement is an attempt to put the MERS scandal to bed.  Despite the NYT headline, this is not a deal for home "owners."  The settlement breaks down to about $2,000 per transaction for "the cost of riding roughshod over 300 years of real estate law."  This slaponthewrist lets banks continue on their merry; it's not going to do anything to help find the bottom in housing.

Tuesday, February 7, 2012

CalculatedRISK: The Bottom in Home Prices is Years Away

The widely-read housing/econ blog points out that housing has two bottoms.  The good news is that the 50-year lows in residential investment, new starts and new construction seem to be behind us (see graph 1, from the FED, below).  The bad news for existing home owners who wish to sell is that the bottom for prices is years away.

This is true in the Charlottesville Area and for the rest of the US.  This blog sees the price bottom for C'ville at the earliest in 2015.

While it is true the Case-Shiller Home Price Index does not track this particular market, its numbers are relied upon by buyers everywhereIt moves the stock market and influences banks' housing strategies as well as government policy.  It is the primary metric whose numbers will be used to call the bottom in home prices. (See graph 2, below, from CalculatedRISK).

Click on images for larger versions.
Graph 1: Housing Starts

Graph 2: Two Bottoms

Thursday, February 2, 2012

President Obama Proposes Another Mortgage ReFi Plan That Won't Be Approved By Congress

Latest Idea: keep prices and the housing market propped up with, among other things, refi'ing homes at 140% loan to value--that is, underwater--no appraisal necessary.  This is not the way to fix the ongoing housing disaster, which in the Charlottesville Area and the United States is nowhere near its bottom.

There's a 30 second commercial before HUD Secretary Shaun Donovan details how this plan can keep 3.5 million mortgage debtors trapped in their depreciating assets.