New Construction in Charlottesville and Albemarle

in General Real Estate on

In short – there’s lots of new construction in Charlottesville and Albemarle.

It’s been said that 2013 is the year of the return of the spec house; we’re seeing more new construction than we’ve seen in years. Buyers have more options, sellers have more competition.

Four important and relevant stories before we get started:

– Why take a Buyer’s Agent to new construction?
– Buying new construction without a Realtor? Read this first! (note: this builder is now no longer doing business in Charlottesville, but we have two national (and maybe a third on its way) builders now and many builders use their own contracts – caveat emptor – or: hire competent buyer representation!)
– Charlottesville – A Healthy Housing Market (for New Construction) – With some Context

– The most important home inspection in the new construction process

The evolution of the new construction market in Charlottesville* has been one where there were once dozens of homebuilders and now there are a handful. And that handful are building. A lot.

The ramifications of all of this construction are many. A few to start:

– Increased competition for existing homes
– Denuding of the landscape
– More choice for homebuyers
– The opportunity for homebuilders to differentiate themselves is more challenging than ever … if everyone offers granite and everyone offers hardiplank and everyone offers an open floor plan …
– Those seeking to purchase homes now with resale in mind (that should be all of you) need to keep at least two things in mind:
1) The siting of the house matters (location, location, location)
2) You’re likely to be competing against new construction for quite some time.
– Some of the neighborhoods on the map have 5-10 homes to be built (Evangeline for example), some have 10-50 (Dunlora Forest) and some have 100+ (Old Trail)


View New construction in Charlottesville in a larger map

Real estate is local – and I’m thinking that our area may be leading the charge in a return to new construction.

Mike Simonsen from Altos Research writes (read the whole post – he describes a lot of important topics and segments of the real estate recovery):

Since 2007, new housing starts have been anemic. The long-term average construction rates are about 1.5MM homes per year. In the last six years, we’ve averaged well under 1MM. And since 2009, the average is closer to 500,000. Meanwhile population and household formation keeps on trucking. The over-construction that happened in the bubble is a distant memory. See the chart to the right. Construction volume under the orange line are “undersupplied” conditions. The homebuilders imploded so profoundly after the bubble, that we haven’t had this few new homes being built since 1959.

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Jim’s Monthly Note #2

in Shameless Self Promotion on

Last month’s note was fun to write, and I sincerely appreciate the few of you who subscribed and read. I’m finishing up the second note and will be publishing/sending it tomorrow morning. Working title: Seeking Better Realtors, Population Controls, The Market & Realtors -v- Zillow

After years of intending to write a monthly newsletter, I’m finally committing to doing one, because I’m writing what I want to write, not necessarily what I think I should write. Matter of fact, writing this note excites me … so much that I’d love to hit “send” right now.

If you’re able to tolerate reading one note a month (of stuff that I’m not going to publish anywhere else) please subscribe to receive the note via email. Once a month. No more. No less.

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If you happen to subscribe in the next month or so, I’ll send you this month’s note when I can – it’s a manual process, so I’ll send out the notes once a week or so.

(and please feel free to share my notes should you be so inclined)


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The Best, Most Popular Neighborhood in Charlottesville is …

in Albemarle Charlottesville on

(part one of two)

The Best, Most Popular Neighborhood in Charlottesville is …

Mill Creek. Redfields. Western Ridge. Bellair, North Downtown?

All of the above. None of the above.

The real answer to, “what is the best neighborhood in Charlottesville” – depends on you.

What does “best” mean to you?

Most popular? I could answer that by looking at the search data to determine what are the “most searched” neighborhoods.

How do you define “best” neighborhood ?

There are a lot of factors that go into the equation of “is this the ‘best’ neighborhood for me? These are some –

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FHA Changes upon Us – More Expensive Loans, Fewer Buyers?

in Albemarle Charlottesville General Real Estate on

I’m often told that the information provided here is educational. Part of my own education is knowing the right people to whom I both direct my questions and clients. As such, I’ll have a few posts in the next couple weeks from lenders whom I trust. First up is Matt Hodges discussing how FHA loans (which require at least 3.5% down payments and comprised about 10% *of the closed transactions in our market** in the past 14 months are becoming far less attractive. Next week’s post should be an interesting one, too.

FHA does not want to be your first choice, period.

Since December, HUD has been anticipating changes to the FHA loan program. On January 31, HUD released a mortgagee letter which changes the program. To read the entire mortgagee letter, click here.

The first change goes into effect on April 1st – no fooling! Here’s what changes:

For loans less than $625,500 (which is everything in our market that uses FHA, as the high limit is $437,000 in the Charlottesville MSA), annual MIP increases 10 basis points (bps). This means that the $200,000 loan now costs $16/month more.

The June 3rd changes:

1. If one puts down 10% on a purchase, mortgage insurance premiums will last at least 11 years, which is up from the current 5 years.
2. If one puts down less than 10%, mortgage insurance premiums are PERMANENT, regardless of future loan to value.
3. 15 year loans with 78% initial loan to value no longer has annual mortgage insurance waived initially – you must pay for 11 years.

The threat of lowered interested party (seller, Realtors, etc) concessions from 6% to 3% of the sales price, has not materialized yet. Our belief is that could prevent the lower priced homes from being able to use the FHA program, which might be discriminatory. It is still being considered, and it might have a ceiling and then tiered percentages below that.

Keep in mind, these changes are for pulling a case number, NOT closing. So, as long as we get the loan application done by March 29th for the first change and May 31st for the second set of changes we will still be using the current standards.

4.   MIP = Mortgage Insurance Premium
5.   Basis points = percent of the loan amount that you pay the insurance on. For example, 10 basis points on the annual MIP = .1% of the loan or $200,000 x .1% = $200 / 12 months = $16.67 per month.

Basically, talk to a great lender early in the process.

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Monday Reading – 25 February 2013

in General Real Estate on

A few things on my radar this Monday morning …

Gasoline Prices up over 50 Cents per Gallon since December – This matters, and my clients are starting to talk about gas prices again, much earlier in the conversation about what they want/where they want to live.

Housing: What if inventory keeps falling? – inventory in some market segments in Charlottesville is frighteningly low – bidding wars, offers in days and hours rather than weeks and months, while the other extreme has foreclosures, short sales, months of inventory (I showed a home this weekend that’s been on the market for 1800 days, and another 6000 square foot foreclosure).

Why Sequestration Will Hit Housing on Several Fronts – the rumors at DIA and NGIC are swirling; this is just the sort of uncertainty the Charlottesville real estate market doesn’t need. At all.

Homeowners Rise Above Water on Mortgages – More sellers are able to sell, but we’ve still got a long way to go before things are stable across the board.

They Bailed On Their Homes – Now They Want Back In – We knew this was coming. Strategic defaulting looks like it was a smart move for some …

When they Came for the Raw Milk Drinkers …

Why Obama Refuses to Kill the Sequester – I don’t care who does what; I resent being a pawn whilst the politicians “play politics”.

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City of Charlottesville Stormwater Management Fee

in Charlottesville on

It’s a tax, but a useful tax.

The City’s infrastructure is crumbling (as is the country’s) and this is a reasonable way to address those concerns. There is so much old infrastructure in the City of Charlottesville (and Albemarle and everywhere else in the US) that at some point, it’s reasonable to start fixing it. If you live in an older home, you may want to consider thinking about the line from the house to the street.

Charlottesville Tomorrow reports:

Beginning Jan. 1, 2014, property owners will be billed a twice-yearly fee of $1.20 per 500 square feet of impervious surface on a site. The money will allow the city to increase funding for its water resources protection program from $945,000 a year to more than $2.5 million.

If this tax is actually applied to upgrading water and sewer infrastructure and is sunset after a reasonable period of time (10 years?) it makes sense to have property owners (churches have impervious surfaces, too) contribute.

For those who own or are contemplating owning property in the City (may I suggest 1507 Gentry?) go to the City of Charlottesville’s nifty new GIS page and look at the bottom for an estimate of how much your storm water fee will be.

City of Charlottesville GISViewer.jpg

(note: the “click here” goes here)

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