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Match Day 2012 – Are the Residents going to Buy?

in Albemarle Charlottesville General Real Estate UVa on March 14, 2012 March 14, 2012

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 â€¦ 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.

Redfields Neighborhood’s Next Phase Going to Court

in Charlottesville Growth on March 14, 2012 March 14, 2012

From Charlottesville Tomorrow –

The Redfields Development Corp. has filed a lawsuit against the Albemarle County Board of Supervisors for denying a request to expand the neighborhood.Â
The county wants the suit dismissed.

If the property was zoned/approved in 1990 for development, and it hasn’t been downzoned since, I’m failing to see the logic of denying the developers’ application now. “You’ve made money” doesn’t strike me as a viable argument; “â€¦ (they have) reaped the financial rewards of its planned residential development zoning classification for 22 years â€¦”

Along that same vein, it seems both the County and the Developer share responsibility for not clearly communicating to the Redfields residents (and each other) that that “open space” was actually “site of future development.”

Learn about Home Energy Improvements This Thursday with LEAP

in Green on March 12, 2012 March 12, 2012

Late late year, my house, with LEAP’s (Local Energy Alliance Program) help, became much more comfortable and energy efficient.

This Thursday, come hear a bit more about the process, the experience, the costs and what you can do to improve your home’s efficiency.

Energy efficiency is good for the environment, but it’s even better for saving money, and “how much does this house cost to run” is one of the most important questions a buyer can ask and a seller can answer.

Charlottesville People Want Transportation Improvements

in Albemarle Charlottesville on March 11, 2012 March 12, 2012

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.

Making Sense of Headlines – My Conflicted Inbox

in General Real Estate on March 8, 2012 March 8, 2012

These two headlines hit my inbox this morning:

Housing Crisis to End in 2012 as Banks Loosen Credit Standards

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes â€œthe clearest sign yet of an improvement in mortgage credit conditions.â€

LPS Home Price Index Shows U.S. Home Prices Accelerated Decline; Psychology Change and Demographics Suggests Bubble Mentality Shattered for Decades to Come

The key take-away is home prices still have not bottomed in most areas. Moreover, nothing stops a renewed decline in those 8% of areas that did not decline.

I’m thinking the truth is probably somewhere in the middle of these stories.

Why Buy a Home? Because it’s a Home

in General Real Estate on March 6, 2012 March 5, 2012

Coldwell Banker’s ad is remarkable. This ad largely defines why I do what I do, and why my buyer clients are looking to buy homes.

I’m going to go out on a limb and say that the prevailing reason that most of my clients are buying right now is because the messages in this ad resonate with them.

They are buying homes, not necessarily investments. They are buying in (and into and within) communities and neighborhoods. The bricks and sticks offer stability of payments, but also stability of place.

Start with number 1:

You’re not always going to be as mobile as you think. Â Eventually, most of you are going to acquire spouses and kids. Those spouses will probably have jobs (particularly if you’re in the demographic that thinks it might move to San Francisco–or Paris–at any moment.) Â Those jobs will not necessarily allow them to pick up and move across oceans or continents so that you can explore some exciting new opportunity, or see what it’s like to live somewhere different. Â Those kids–attached to their friends and schools–will, after a certain age, also be very resistant. Â

Something Positive For a Change: Coldwell Banker Hits A Home Run

Yet Another Reason Charlottesville Assessments Don’t Equate Market Value

in Albemarle Charlottesville on March 2, 2012 July 1, 2021

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.

Read the whole thing.

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 â€¦ 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.