I thought I’d never see the day when the NAR economist wrote something like this – Based on the latest available information, my outlook is for new single-family home construction to decline for another year-and-a-half through the second quarter of 2009. …However, lower home construction activity is just what is needed to help stabilize the housing market…. A high number of vacant new homes will pressure home prices on existing homes to fall and that could result in a sizable loss in housing equity for a vast portion of 75 million homeowners in the U.S. Consumer spending can spiral downward fast from loss in equity and push the economy into a deep recession…. It’s not a pretty forecast, it’s not overtly sunshine-y, but it appears to be an honest assessment, and that’s just what we all need.One question – how many consumers are even aware of the NAR’s history of ahem – BS – analyses?
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Showing in Waynesboro
I’ve spent the past few days immersed in the Waynesboro, Virginia real estate market; the differences between it and the Charlottesville market are frequently striking.It’s not an apple-to-apples comparison, but … In Charlottesville/Albemarle, using the Charlottesville MLS, there are currently 1181 residential properties on the market and 295 under contract…. A few observations – – The Realtors and sellers tend to all be very friendly.- There are far fewer vacant houses on the market in Waynesboro than in Charlottesville.- Showings are much easier to set up in Charlottesville – all we typically do is call the owner and leave a message with the time we expect to arrive. Contrast that with the Waynesboro experience – many of the houses seem to request 24-hour notice for showings and almost all properties seem to have “Call the listing office” as the showing instructions.
Recap of Sunday’s show on Charlottesville real estate and economy
An hour flies by surprisingly fast, and seems to go quicker every time.Topics we ended up covering – – The Charlottesville/Central Virginia real estate market and what about Waynesboro and Augusta growing impact?… (I’m not an economist, but I took my best shot)- UVA’s sustaining impact on the local area and economy, as well as NGIC, State Farm, etc. – The impact the service industry has on the Charlottesville economy.- Vacant houses, REO properties, foreclosures and sellers’ expectations and pricing strategies- Tightening lending standards – Matt referred to Dan’s video that I posted earlier last week.- The agent/lender “bubbles” – as Matt so eloquently stated – “get good, or get out” of the industry.I have no idea how many people listen to the show, as WNRN doesn’t participate in Arbitron ratings, but it’s surprising how many people listen to the show live or on the podcast. This was the third time that Matt and I have done this show together, and I think that we could do this type of show once a quarter. We didn’t talk about everything we wanted to, but my hope is that I sounded honest, somewhat intelligent and competent.I’d love to spend time talking about the benefits of working with an experienced Realtor, why to use a Buyer’s Agent, pricing strategies (don’t overprice it!)
Vacancies, foreclosures and opportunity in Charlottesville
The vacancy rate for the Charlottesville area are fairly consistent over the last 18 months, with a slight uptick recently.The key words are market knowledge, adaptation and patience.For Charlottesville/Albemarle – there are 1395 active properties, with 490 properties being vacant (35%)…. Almost 400 of these show as vacant, while almost 300 of these vacant homes are new construction.For the entire market area, there are about 2,000 homes on the market, 600 of which are vacant, 450 of which are new construction.What does this data mean?Combine the local vacancy rate with today’s release of updated foreclosure data showing that, in the Commonwealth of Virginia (localized data not readily available), foreclosure activity is up nearly 500% (that has to be a typo) compared to the third quarter of 2006 and you have this:Unfortunately, there is going to be some pain felt in this market, and there are going to be some great opportunities for those willing and able to treat real estate investment the way it has traditionally been regarded – as a long term investment.The market is working – without a government bailout…. There are 47 vacant, active properties in Charlottesville/Albemarle that have been on the market for at least a year – think there might be some motivation in there somewhere?The inimitable Michael Cook says:If you read me often you know this is nothing new…. You could call this the calm before the perfect storm.For some local perspective: Vacancies in October 2006Vacancies in January 2007Vacancies in April 2007For a national perspective on vacancy rates since 1965 take a look at this graph:Of course, the United States population in 1965 was about 194 million.
Tuesday links 07-24-2007
Charlottesville is in a Drought WatchWages in the region slightly up; what’s the benefit in this?The survey is proprietary, and Carolyn Fowler of HR Diversified Solutions warns the Hook that even if we pony up $200 for a copy of the report, publishing the information is strictly forbidden.Why housing is expensiveStates aim to stem tide of home foreclosuresThe projected foreclosure rate — higher than during the oil bust of 1987 but not as high as in the 2002 recession — poses a significant threat to the housing sector, and possibly to the nation’s economy if it spurs consumers to maintain a tight grip on their wallets. “Falling home prices hurt consumer spending,” says Patrick Newport, an economist at consulting firm Global Insight.The problem can be traced in large part to consumers who took out adjustable-rate mortgages that had low initial rates but which adjusted higher after two years to a rate that was significantly higher than they expected or could afford…. Houses left vacant as the result of foreclosures tend to push property values down and cause neighbors that can afford to do so to sell out and move away, creating a snowball effect.And Wells Fargo has stopped making these 2/28 loans. Too little, too late?The company in an e-mail said it ended on Friday retail offerings of so-called 2/28 loans, which at 65 percent of all subprime mortgages last year are the staple of the industry.
Vacancies in Charlottesville MSA
Taking inspiration from Inman’s article on housing vacancies …There are currently 1894 properties on the market in Charlottesville, Albemarle, Fluvanna and Greene. 583 of these are listed as vacant – right around 30%!Macro analysis at CR.
Wikis and more
Wikis, sustainability links, appraisers under fire