7 Comments

1. Matthew Rathbun January 28, 2008 at 11:58

   Oh… hey… lookie there, someone has been reading his fanmail again! I am glad to see this direct approach. Now if everyone else will please get a reality grip, than maybe we can make some progress!

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2. Dave Phillips January 28, 2008 at 16:19

   I thought this line was important:

   “Price weakness was more pronounced in areas that saw the steepest price appreciation in recent years, the median price falling 11.1 percent in the West and 8.9 percent in the Northeast last year.”

   Charlottesville experienced only modest price increases in the past few years when compared to other markets like No. VA. Okay, using the word modest is probably understated, but we are riding the Scooby Doo Roller Coaster and No.VA is on the Big Bad Wolf.

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3. Dave January 28, 2008 at 23:23

   Mr Phillips,

   Albemarle is indeed significantly above the national average for house appreciation over the last several years. NoVa is one of a handful of extreme cases. Commisions, sorry, I mean house prices, went up too far too fast. We (nonrealtors) need this depreciation and return to normal appreciation in the market in 2009 or 2010.

   Dave

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4. Dave Phillips January 29, 2008 at 06:36

   Dave, I agree that we needed this price correction in Cville. We were seeing unsustainable price increases. My point was simply that we were not as bad as many other areas and foir that we should be thankful.

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5. Anonymous Coward January 29, 2008 at 09:10

   Hello Dave and Dave. Just one quick comment — it is true that housing price appreciation in C’ville wasn’t as stunning over the past 6 years as, say, Las Vegas or Fort Lauderdale or Los Angeles or the Silicon Valley or San Diego or Boston or Manhattan. But we should try to separate out a couple of cases which I think are different. Places like Los Angeles, Silicon Valley, Manhattan and San Diego experienced significant home price appreciation, but they also experienced enormous job and wage growth over the period of the housing boom. Not nearly enough, mind you, to explain the updraft in home prices, but still quite a lot. C’ville, on the other hand, is a much poorer market with lower dynamism and job growth — and, most importantly, the job growth we have is relatively low wage compared with places like San Diego, etc. So although C’ville may not have had a San Diegan or Manhattan-like rate of housing price growth, we didn’t have their job growth either, and that means that our housing prices may be just as out of line as theirs.

   I think that will become perfectly plain over the next 18-24 mos.

   One final note — yes, the Univ. of Virginia is expanding. But no one at UVA (excepting Pres. Casteen) gets paid anything like the salaries earned by investment bankers, biotech engineers, elite lawyers, etc — the kind of jobs that urban bubble areas produce and we do not. UVA is an economic giant in C’ville. But compared even to major urban universities — Harvard, Columbia, Penn, UCLA, Stanford — it’s an economic pipsqueak. Job growth at UVA is great, as far as it goes. But it doesn’t produce the economic base to support double-digit housing price growth.

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6. Dave Phillips January 29, 2008 at 09:18

   AC, you make some good points and I agree with everything you say. I think we are both making the local picture sound more simple than it really is, but it is hard to really do this topic justice on a blog.

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7. jmcnamera January 29, 2008 at 11:37

   Responding to the anonymoust poster, most of the real estate appreciation was not from bankers, elite lawyers etc. It was from greed. Morgage lenders wanting their bonuses and handing money to anyone who asked, people borrowing money they could not afford to pay back, etc.

   The no-doc and subprime loans allowed speculation which drove up the prices and made real estate unaffordable. This is what is being corrected, assuming the Feds don’t try to avoid the correction and use taxes to avoid short-term pain.

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