Why is (good) inventory so low in the Charlottesville area?
One reason that I have been providing to clients is this:
The housing depression created a new underclass of homeowners who cannot sell or refinance for two reasons. Because they owe more on their homes than they are worth. Or because they are above water but don’t have enough positive equity to cover the costs of selling or the 20 percent positive equity lenders require to refinance.
And this is going to continue for years. Years.
I randomly pulled five properties from the Charlottesville MLS, with asking prices between $300k and $400k.
- Property one – asking $339k. Paid $243k in 2002
- Property two – asking $339k. Paid $273k in 2010
- Property three – asking $349k, paid $159k, but refinanced a couple times since
- Property four – asking $349k, paid $284k in 2004
- Property five – asking $350k, paid $162k in 2000
So my random sampling didn’t provide the anecdote I was looking for, but I’d bet at least two of those and probably three, while able to sell, likely aren’t able to sell and clear enough to make the next move.
But … more often than not, it seems the houses my clients are targeting to purchase are either close to being under water or under water. I could non-randomly pull 10 from the Charlottesville MLS in 10 minutes that fit that description.
Another reason (good) housing inventory is low in Charlottesville is that people are living in the houses – they may have purchased in 2002 when their kids were 1 and 3, they have job and life stability and are busy living where they are. Crazy, huh?