I thought about this when I read it, but Mayor Brown puts it most succinctly:And the irony that this luncheon was held in Glenmore – an affluent, gated community – must have been obvious to everyone present.From the DP:“Lots of poor kids are smart and need enrichment opportunities,†Ralston told the chamber’s annual Community Government Luncheon at Glenmore Country Club. Parents living in poverty “want the best for their kids but they don’t have the resources and they don’t have the opportunities,†she said.WINA and WCAV report as well. Hat tip to Waldo.Might as well lead from the top.
Browsing Category Affordability
Wacky mortgages and scary forecasts
of the subprime ARM loans written in Virginia were 30 days or more past due in 2nd quarter 2006.Things are about to get immensely more complicated, now that the Senate is holding hearings assessing non-traditional mortgage products…. I was told the other day that there are only two local lenders who have not written any Option-ARM mortgages. I am pleased to consistently work with one of them.The next 12 to 18 months are going to be very interesting, and very full of opportunity for some and sadness/desperation for many.Quoth Jonathan Miller:I have come to belive all news is presented in the most negative light possible, especially news about the economy…. For this data, I would have to bold it all.And finally, if you want to see the laughing hyenas taking pleasure in all of this, spend some time at the housing bubble thread…. From Comstock Partners’ commentary:Ø 32.6% of new mortgages and home equity loans in 2005 were interest only, up from 0.6% in 2000Ø 43% of first-time home buyers in 2005 put no money down.Ø 15.2% of 2005 home buyers owe at least 10% more than their home is worth.Ø 10% of all home owners have no equity in their homesØ $2.7 trillion in loans will adjust to higher rates in 2006 and 2007.Ø 70% of borrowers who took out pay-option ARMS in the past year have loan balances larger than their initial loan.Ø Homeowners face higher payments as mortgages are reset. Generally, monthly payments rise between $200 and $500 depending on the size of the mortgage.Ø According to Reality Trac, August foreclosures were up 23% over July and 53% over a year ago.Ø The number of homes for sale is at record highs, and inventories are 59% higher than a year earlier.Ø New home sales are down 22% and existing home sales down 11%.Ø The NASB housing market index has recorded an all-time decline.Ø The housing affordability index is at a 15-year low.Ø The house price-to-income (rents) ratio is off the charts. According to HSBC, in 18 states accounting for over 40% of national home values, the price-to-income ratio is 3.6 standard deviations above the mean.Ø The OFHEO index of house prices deflated by the consumption price deflator has soared to a record high of 350 from 250 in 2001. From 1976 to 1996 it never was above 220.Ø According to the NAR the year-to year prices of existing homes are now flat.
Housing appreciation slows
I had a neat little post all ready to go referencing these two articles – Housing’s rate of appreciation slows…. (Free link)- and then the NYTimes comes out with their spin on the data – Home Prices Fall in Nearly One-Fourth of Metropolitan Regions…. The Office of Federal Housing Enterprise Oversight (OFHEO)’s quarterly report (PDF) was released the other day and has been the talk of the town.As a region,The South Atlantic Census Division including Florida, Delaware, the District of Columbia, Virginia and Maryland experienced its most significant price deceleration since at least the early 1980s. Its four-quarter appreciation rate fell from 17.43 percent to 13.74 percent. Even more specifically, are we really in a position to masticate and gnash our teeth over this?Charlottesville’s MSA*National Ranking – 641-Year Appreciation – 14.52%Quarter Appreciation – 4.11%5 Year Appreciation – 79.93%*MSA = Charlottesville, Albemarle, Greene, Fluvanna, NelsonNational statistics are a good guide to what is happening to the local market. Whether the County of Albemarle enforces its proffers will impact our market far more than what happens in Peoria (which has had a 22% increase in price over five years). Importantly, the agent bubble continues to lose ground – only about 30% of all area Realtors have had five or more transactions!The housing market continues to combat the culture of fear being propagated by the media…. What does it mean when the Government is using bubble visuals to depict the housing market?
Charlottesville area housing sales
Following up on Liesel Nowack’s story this morning in the DP, fast on the heels of the Virginia Association of Realtors’ release of home sale data:First on low interest rates’ impact on the boom – did they have an influence?… For a (per usual) far more in-depth review, read Samuel Miller’s post entitled “Low Rates Did/Did Not Fuel the Housing Boom.”Did rates fuel the housing boom?… Rates impacted the psychology of buyers (and sellers, who usually purchased after they sold) by offering nearly “free money,” from an historical point of view…. (from Inman, subscription required:) The study, “The Great turn-of-the-century housing boom,” is here)”That the increase in home ownership cuts across so many different categorizations suggests that the overall home-ownership rate is not merely reflecting changes in the distribution of the population among the categories. Something fundamental about the home-ownership process has changed,” the study theorized.What’s changed, the economists say, is mortgages…. Specialized firms have sprung up to capture different segments of the market, such as origination, servicing and securitization, the authors say.Year over year, pending sales are down in the CharlAlbemarle region* by 22%…. Mortgage Rates Decline, to 6.48%Mortage rates dip for fifth straight week (USA Today)Houses are not normal, liquid commodities; they are serious investments that require careful analysis of many, many factors prior to purchasing…. That is a “good thing.”Further reading:OFHEO Housing Price Index for Charlottesville*The Association of Realtors includes Louisa County in their statistics, despite its omission as part of the Charlottesville MSA.
Friday links – 25 August 2006
The Human CarHome for Sale, by Anxious Owner – my analysis of local incentives is coming soon. Macro market roundupKeep your friends close and your enemies closer (Microsoft and Firefox collaborate)A great idea marginalized by its affiliation with the UNIt took some time, but I finally found what may be my favorite commercial today – the one for Barclay’s i-Shares, titled “Strike Anywhere.” I’m not sure I’ll buy i-Shares, but this commercial does speak to me.
Helping those who help us
To:Area FirefightersArea Law Enforcement OfficersArea TeachersIn appreciation for the work you do for the people of the Charlottesville/Central Virginia area, I am now offering an incentive for you to help you with the sale of your home and/or the purchase of your new home.I will discount my normal commission for you on the house you are selling to help you save on the sale of your home. Whether you’re selling a home or buying your first home, I will offer you a rebate on my commission I earn on the purchase of your home and apply it toward your closing costs to help you at closing.There are no strings attached. While I have never been in the public service, I have friends and family who have benefited from your service and expertise. I appreciate the hard work you put into your careers and know civil servants don’t always make the highest salaries for the work they do.Please call or email me with any questions. 434-242-7140 CAAR’s Workforce Housing Fund is one aspect of the community’s recognition of this crisis. Hopefully my little drop in the bucket will help.From the “Credit where Credit is Due” department: I was inspired by Marty Martin’s post.
Thursday Links 07-20-2006
Platitude-free punditry about railChanges in the Housing Market are reshaping cities. Where are the bike routes in the Charlottesville?D.C.’s affordability rule gets shot down.The rule would require developers to make up to 10 percent of their units affordable to households with incomes of no more than 80 percent of the region’s $90,300 median for a family of four. The rule would apply to projects with 10 or more living units.