Charlottesville's Real Estate Blog. Buyer &/or Seller Representation, Real Estate News
I’ve said it before:
– When Evaluating the Charlottesville Real Estate Market, IGNORE National Data
– When Assessing the Charlottesville Real Estate Market, Read More than the Headlines
and here’s a taste of how conflicted my news feed and streams are –
Making Sense of Headlines – My Conflicted Inbox
I’ve been saying this to clients for the past couple of days; in light of today’s Case Shiller report I thought I’d share what I’m seeing:
From Charlottesville Tomorrow – “A new group calling itself the Charlottesville Open Government Alliance said a lawsuit will be filed Friday against the Rivanna Water & Sewer Authority and others seeking to stop construction of a new earthen dam at the Ragged Mountain Reservoir.”
Contracts are up in the Charlottesville area – significantly. Prices are down, inventory is down, sales are up. There is some positivity in the market; multiple offers, while not “the norm” are definitely common.
As I’ve said to clients: properties that are priced well*, in great condition, and in great locations tend to be selling well.
I’m still trying to make time to run a few different numbers – breakdown of property type, etc. I’m doing these for my clients on property-specific instances frequently) but haven’t been able to do it for here …
* Priced well is part science, part art, part data analytics and part luck, sometimes not in equal proportions.
Match Day happens every year and March 16, 2012 is Match Day for the medical folks – the day in which they find out where they are going to do their Residencies. I’ve worked with a lot of UVA Residents over the years, and they’re all unique and different, but also tend to have very similar criteria, the foundation of which tends to be “no more than 20 minutes from UVA Hospital”.
For the first six or seven years of my career, 2001 – 2008, incoming medical Residents comprised a significant portion of the Charlottesville real estate market. Since 2007 – 2008, most of that segment of the market has chosen to rent; in other words, the 0 – 5 Buyer has gone.
2011’s real estate market feels a bit different; a lot of buyers are coming back to the market. I’m still uncertain as to what impact Residents are going to have, as I’m betting that quite a few are going to be reluctant to take on more debt.
Student loan debt is crippling our country:
How does the housing bubble debt compare? If you add together mortgages and revolving home equity, then from the first quarter of 1999 to when housing-related debt peaked in the third quarter of 2008, the sum increased from $3.28 trillion to $9.98 trillion. Over this period, housing-related debt had increased threefold. Meanwhile, over the entire period shown on the chart, the balance of student loans grew by more than 6x. The growth of student loans has been twice as steep — and it’s showing no signs of slowing.*
But … if you are a medical Resident moving to Charlottesville thinking about buying, there are quite a few options on the market now that meet the typical criteria – at least three bedrooms, two baths, under 20 minutes to the UVA Medical Center.
This year, I’d be surprised if many (any?) incoming UVA residents move to anywhere other than Charlottesville or Albemarle; prices have declined such that looking in Greene or Fluvanna is likely to be a choice rather than a fallback because nothing is affordable in Charlottesville or Albemarle. It’s going to be interesting.
If you’re searching, search for homes by proximity to UVA (I’d use 1 Hospital Drive)- I’d be inclined to keep the maximum radius at 10 miles; in our market that should be sufficient to keep the drive time under 20 minutes.
Charlottesville Tomorrow reports that “Nearly seven in 10 local residents say a need exists for a bypass of U.S. 29 around Charlottesville, according to a new survey. But almost as many said they would be in favor of exploring alternatives to the approved Western Bypass if they cost less and were effective in relieving congestion.”
Basically, Charlottesville people want transportation improvements – whatever they may be.
Keep in mind, Charlottesville traffic is relative; to those of us who live here, twenty minutes is a far drive. To those not from here, twenty minutes is short. And no, we’re not used to Northern Virginia traffic.
Samantha Masone at The HooK reports that the City of Charlottesville does not include short sales or foreclosures when determining assessed value, which means taxes:
Invalid transactions also do not include foreclosures and short sales, even though these have became a major part of the local market, are also excluded from the official assessment calculations.
Lesson learned: when, as a buyer, seller or real estate professional, you are evaluating true market value – what a ready, willing and able buyer will pay for a property – ignore the City of Charlottesville’s localities’ real estate assessments.
The City of Charlottesville (and I think the County of Albemarle, and I’ll confirm this later) doesn’t include short sales or foreclosures … which have become about 20% of the real estate market in Charlottesville and Albemarle. By excluding distressed sales, the City is artificially keeping the assessments higher, which means that property taxes are higher.
I’d like to exclude the short sales in my market analyses, but I’d probably be deemed incompetent by my profession, my clients and the market.
I’ve argued for years that localities’ real estate assessments do not equate fair market value; Samantha’s research further proves this point.
The City of Charlottesville’s code states thusly: (bolding mine, and thanks to my friend for the legal direction)
The assessor of real estate shall manage and control the assessment of real estate for taxation in accordance with the applicable state laws. The assessor shall annually appraise for taxation, at its fair market value, all real estate in the city not exempted from taxation by the Constitution of Virginia and not assessable for taxation by the state corporation commission, which shall include all land, buildings, structures and improvements thereon and all rights thereto and interests therein. The assessor shall further perform all other duties required by law to be performed by the commissioner of revenue in respect to real estate assessments, and such other duties as may be prescribed by the city’s director of finance.
My question for the City of Charlottesville – where/how are they permitted to exclude short sales and foreclosures?
(If I read this right, they can also force landowners to answer their queries. “No person shall fail to supply pertinent information or records requested by the assessor of real estate.”
The County of Albemarle seems to have a similar practice. I asked Lee Catlin, Albemarle’s Community Relations Director, if Albemarle excludes “invalid sales” when evaluating assessed values. Bob Willingham, Albemarle’s chief assessor responded:
Generally yes. Instances such as family, related parties, partial interest would be invalid sales. Short Sales, foreclosures (to and from bank) are reviewed and may be coded invalid if there are ample arms length sales in a neighborhood.
* One note: It would be great if the City of Charlottesville offered a GIS solution for the public that would allow tracking historical assessed values, as every other locality does. Sadly, they continue to be negligent.
The NAR released their Pending Sales report this morning.
As we know, national data doesn’t matter so much.
So, I looked at the homes put under contract in Charlottesville and Albemarle for the past few months.
But … keep in mind that things are so very mixed. I’ve been showing homes in the $550k – $800k range for the past few days. Of the past five properties we’ve seen:
– One is a short sale
– One is a foreclosure
– Three are regular sales
* Data from the Charlottesville MLS
** “Right Now” is 27 February around 10:30. From Open Space. I’ll update the chart after February.
Updated on 3 March. Contracts in February 2012 in Charlottesville and Albemarle are up just over 68%.