What is sufficient housing

This letter to the editor in the DP last week was funny:

Why do we need to consider unprecedented growth of housing stock when the existing supply is greater than the current demand? Could it be that the monied interests of large-scale developers is driving this development steamroller?

As of Nov. 20, the Multiple Listing Service [a database of properties for sale by participating real estate agents] indicated that there is approximately $125 million worth of residential homes for sale in Charlottesville and Albemarle County.

This number doesn’t include big farms and estates, properties for sale by owner or other properties not listed in the MLS by discount brokers.

Another interesting statistic the MLS revealed is that approximately 350 homes for sale in our area are vacant. The lock box is on the door and nobody’s home.

If we are to maintain what positive qualities of life that still remain in our community, then certainly we must examine why growth must continue at unbridled levels. We have plenty of housing stock available for those wanting to locate to this area.

Really, we have “plenty of housing”? What is a definition of “sufficient housing” upon which government can base their regulations?

In Charlottesville/Albemarle – There are currently 190 active properties on the market under $200k. This may seem like a large number until one starts digging in and looks at the respective locations, sizes, etc. 108 of these are condos. Between $200k and $250k, 95 homes for sale -  25 of which are condos.

Between $250k and $450k, there are 488 properties on the market, only 67 of which are condos. 153 of these 488 are flagged as new construction.

Yes, we have lots of inventory. Yes, a lot of these are vacant (see my stories in October and July) But should we allow some outside force – I assume that your intent is to have the government step in and further regulate the market – to control the nuances of the real estate (or any, for that matter) market?

What program/market/system has benefited from governmental intervention? Local governments tend to enjoy the rising market – note how they always find a way to spend the windfalls they have received from rising property assessments. (More on this later)

So, what is the solution? Here’s an idea – let the market decide. And shop. Don’t forget to shop.

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  1. Athol Kay November 27, 2006 at 17:53

    Translation: I want to leave this town but can’t sell my house.

    Agree with letting the market decide.

  2. Jim Duncan November 27, 2006 at 23:51

    Athol –

    Now that is an insightful comment. Thank you!

  3. Dot Akinola November 28, 2006 at 17:22

    I don’t really think it’s that a lot of people are trying to “leave” town. I think its more of people either trying to “move up” to bigger homes or buyers just waiting on the side lines to see if prices come down more. Charlottesville is still a rather desireable place to want to live.

  4. Lyle Solla-Yates November 29, 2006 at 09:53

    RE: Benefits of gov’t intervention
    I would argue that the Resource Conservation and Recovery Act has benefited producers of toxic waste and consumers alike, by clearly establishing liability and chain of custody for producers, allowing them to better manage their risk and restricting exposure to consumers. It’s one of the few good examples of government acting appropriately to cause the market to internalize negative externalities.
    On that model, I believe that any act of government that improves the cost accounting of the economy is a good thing, and anything that warps or twists that cost accounting (taxes on productive activity, unnecessary mandates and subsidies of all stripes) isn’t so great.
    In other words, I largely share your pessimism with present government actions, but believe that government can act positively, when it works with the market.

  5. JR Jackson December 1, 2006 at 13:38

    Well the National Association of Realtors and its members certainly have benefitted from governmental intervention. There’s a reason why they dumped millions of dollars into this past congressional election.
    God forbid banks, discounters or other kinds of institutions get into the business of marketing real estate. There are some excellent Realtors out there that earn every penny of their commission, but in a free market consumers ought to have the opportunity to choose what’s important to them – service, cost, experience, etc.