Wednesday, June 13, 2012

UVA President's Ouster Could Bring Another Headwind to Charlottesville Area Housing Market

June 10 could very well be the exact date that began the next leg down in the Charlottesville Area's ongoing home price slide.  It was on June 10 that a seemingly capricious, secretive decision, tantamount to a putsch, was unveiled: the UVA BOV, Rector Helen Dragas, and President Sullivan have a "philosophical difference of opinion" and Sullivan will no longer serve.

The Charlottesville Area housing market has continued to suffer price declines and weak sales (see April's price slide, and this and this from Q1 2012).   But there has lately been a growing acceptance of the "New Normal"--knowledge that prices will continue declining, and sales volume will remain low--that has led those with secure jobs to get off the proverbial fence and buy.

Now what? With the area's largest employer in turmoil? How many buyers will rethink that major purchase?  Forego the first-time pad, or decide the current house is just fine, and stay put?

With the current opaque chaos at Virginia stemming from President Teresa A. Sullivan's "resignation," the greater Charlottesville area is facing an unanticipated--and very unwelcome--period of economic and psychological instability.  And all thanks to--apparently--just three members of UVA's Board of Visitors.

Confusion, anger, and instability rule as the leader of the area's largest employer seems to have been ousted in a secret plan arranged by a handful of people:
"I have never seen a board act so recklessly, arrogantly, and secretly in my entire life," says [prominent UVA media scholar Siva] Vaidhyanathan, who calls Sullivan's ouster "very scary" and "deeply embarrassing" to the University. "Everything they've done," he says, "is 180 degrees away from the scholarly tradition that had made UVA great."
The chair of the Board of Trustees of the Darden School Foundation, Peter Kiernan, sent a letter to other trustees, assuring them that Board of Visitors Rector Helen Dragas "has thing well in hand."
But the UVA community, and the general public, has only received this reassurance through leaked emails.

As outrage grows, Chairs and Program Leaders from the College and Graduate School of Arts and Sciences have sent a letter of protest to UVA's Board of Visitors, which includes this:
Our surprise and concern arise directly from the fact that we have been very pleased with the direction in which President Sullivan and her administrative team have been leading UVA and with her accomplishments thus far. She is an extraordinary academic leader, with superb administrative abilities, the heart of a faculty member, and evident strength of character.
UVA impacts this entire region, and this event could ripple outward--economically--for months to come.  It could have an immediate and dramatic impact on the local housing market, as well as on area commercial establishments--stores, restaurants, services.  This could well be tantamount to a local Black Swan event.

Let's hope that last sentence proves to be hyperbolic and false....

UVA is--once again--receiving much unwanted local and national media attention.
Washington Post:  What Happened? and Anger
The Chronicle of Higher Education: Overview and Faculty Seek Answers
WINA - June 12 podcast of former UVA President Robert O'Neil on Sullivan Ouster

Orig posted 6/13 3.23 pm; revised 6/14 2:12pm.

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