Charlottesville Foreclosures – not that bad

Could this be a sign that the local media is going to start running positive coverage of the local real estate market? Today’s Daily Progress notes:

Less than 1/2 of 1 percent of Charlottesville area homeowners were either in foreclosure or more than 60 days behind payments on a subprime loan, according to October statistics compiled by the Federal Reserve Bank of Richmond.

The Charlottesville region has been immune to the high numbers of subprime loan defaults seen elsewhere because the local economy is relatively strong and stable. Thanks in large part to the area’s quality of life, as well as the University of Virginia and the National Ground Intelligence Center, families continue to move to the Charlottesville area.

Three things –

1 – I like a positive story as much as anybody, however one of the benefits of blogs is that with blogs, every statistic can be (and frequently is) cited. I’d love to see the sources of all of these conclusions. For example – how is the “Charlottesville region” defined – which localities are included?
2 – Take this positive story with the same amount of salt as you do the negative ones – there is always more to the story.
3 – It’s great to see a non-doom-and-gloom story fora  change. For better or worse, media does influence consumer psychology.

Related reading:

Sub-prime lending and the slums of tomorrow.
Subprime loans failing pre-resets

Now is as good a time as any to dispel the conception that interest rates are high.

 Mortgage rates 30-Year-Fixed-Historical

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  1. Scott February 24, 2008 at 13:39

    So, I’d note two things:

    – this study is based on October numbers; that was only one month or so after the true MBS/CDO Credit Crunch hit. I’d suggest we appear unscathed largely because of the lag effect.

    – this doesn’t seem to include Lake Monticello/Palmyra County, where foreclosures appear to be exploding. That area is followed closely by Greene, and finally Southern Albemarle.

    I think it’s a little early in the game to predict that we’re OK, particularly since the bulk of the ARM resets aren’t here yet. I do agree that the C’ville area has employment fundamentals that mean we have a better shot of weathering the ‘underwater’ period, however anyone who must refinance due to resets remains vulnerable. OFHEO numbers showed that our MSA was as much as 25% over-inflated in ’05; the bubble seems to have continued to grow strongly here up until 2nd QTR ’07. As in NoVa, the further out regions fall first – and Greene and Palmyra seem to fit the trend – not unlike Loudon, Faquier and Prince William.

  2. Scott February 25, 2008 at 09:36

    So, I’m an idiot: it’s clearly Fluvanna County – Palmyra is the county seat. Doh!

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  4. Daniel Rothamel February 25, 2008 at 15:48


    Do you have a source for your “exploding” foreclosures in Fluvanna? As a REALTOR who lives and works in Fluvanna, it would be good to have numbers I can cite. I haven’t seen any reliable ones, and from the perspective of my business, I haven’t seen a tremendous amount of foreclosures.

    Although “exploding” is a relative term. With the low number of overall homes, a small increase can represent a huge percentage.

  5. Mark February 25, 2008 at 22:05

    Anecdotally, there seem to be more Fluvanna property auctions weekly in the Hook.

    Makes sense that Fluvanna would spike first, since many people are driven there by high prices (Augusta County on the other side), but I too would like to see some sources.

    Also anecdotally, I see a ton of foreclosure listings for the Louisa/Zion X-roads/Campbell Road area.

    I am surprised the People’s Republic of Charlottesville hasn’t hatched some sort of bailout plan.

  6. scott February 26, 2008 at 17:29

    Mark – yes, I do: the trustee sales notices in the Daily Progress, which I track daily. The lake itself is nearly ground zero in our area. They represent nearly 30% of foreclosures in our our area over the past three quarters.

    I agree with the original premise that the area has had lower numbers than many other bubble areas, but there are at least 10 active (as in, not yet auctioned) foreclosures at the Lake right now.

    Because VA law doesn’t have NOD and NOF legal filing requirements like other states, aggregators like appear to lag, badly.

    Yes, your observation about Louisa/Zion’s Crossroads is exactly right, they are close behind. I anticipate that Crozet will be the next big hotbed.

  7. Scott February 26, 2008 at 17:30

    Mark –

    I’m an idiot – that should have been addressed to Daniel. Sorry fellas.

  8. Jim Duncan February 26, 2008 at 20:54

    Thanks. Scott.

    I wish there was a reliable, accurate means by which to track local foreclosure data.

    What do you mean by “our area?”

  9. Scott February 27, 2008 at 12:48

    Jim –

    I mean:


    Louisa and Orange are at the edges – they really belong in more than one MSA.

    The valley, as you noted in your earlier posts, is only over the Rockfish Gap, but a world away by so many other measures.

    I don’t search or subscribe to the Richmond-Times Dispatch, so there may be Fluvanna & Louisa foreclosures I’m not capturing in my stats. I watch the Media General papers (Amherst, NCT, News-Advance) and the Daily Progress. I see, but do not track/record, trustee sale notices in Madison, Orange, Buckingham, Louisa and Greene, so I’m excluding those when I say “30%”.

    I’d predict that Culpepper and Warrenton will ultimately have very high foreclosure rates due to the explosive sprawl build-out up there. But, IMO, they belong in the DC MSA.

    Meanwhile, “The Lake” has long been (as I’m sure you’re well aware) – before Greene even – the Charlottesville low-cost “starter home” “gated community”. In other words: targeted to people who are stretching to get the most square footage for their buck – stretching their budgets. I expect the concentration of toxic mortgage products was much higher there than in Albemarle or C’ville. I wonder how long before the lake ZIP code is tagged by lenders as a major “declining market” the way PWC is, for example.

  10. Jim Duncan February 27, 2008 at 12:57

    Scott –

    Thank you so much for the comment. I am grateful to have you here.

  11. Pingback: Question from a reader regarding Charlottesville area foreclosures | Real Central VA

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