Links for August 07 2009

I could have titled this post “Things I wish I had time to write about.”

Who are investors going to sell homes to now?

(College) Towns they don’t want to leave – speaking about the trend of students coming to town and staying. On this note, here is a story comparing Ithaca (Cornell) to Charlottesville (UVA).

With condo foreclosures, others feel the pain, too – We are not seeing these here (yet) but this highlights the risk I have advised my clients of over the past couple of years (specifically to a couple of condo developments in the Charlottesville area)

How to Fire a Real Estate Agent – a great post, with great comments and insight

Slutzky renews effort to create a Transfer of Development Rights program in Albemarle – a bit more information here.

Creating area transit system is a taxing job – but it’s something we really, really need.

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  1. Andy K August 7, 2008 at 08:10

    The Cornell Daily Sun made quite a glaring error in their story –“In 2004, the majority of registered voters in Charlottesville cast their ballots for President George Bush,”

    Per the Commonwealth of Virginia official results in Charlottesville: Kerry 72%; Bush 27%

    Also, I know Albemarle was 50%/50%, with a slight edge to Kerry.

    I wonder where they got their data. I consider that error a major insult. That hurt almost as much as the last 4 years.

  2. jc in c'ville August 8, 2008 at 16:07

    I just left a version of this at “Who are investors going to sell homes to now?” but felt a need to share it here as well.

    This is in response to the growing group that cries for a return to the good old days of 20% Cash down payments.

    20% DOWN !?!?!? You have to be joking.

    Just bear with me for a minute as this is something that is repeated again and again off hand but when you really look at the numbers just doesn’t seem realistic.

    Lets take a look…

    December 2000:
    I made $30k a year
    Average house in my area about $80-100k.
    20% down = $16-20k ~ 66% annual salary (few years of serious saving)

    December 2007:
    I make $60k a year (after some serious negotiations).
    Average house $380K
    20% down = $76k ~ 127% of my now DOUBLED annual salary.

    PEOPLE NEED TO SAVE ? Save what? The gobs of frivolous cash flying around.

    Lets the cost of living in the last 8 years:
    FOOD (rice alone since 2006, +217%)
    ENTERTAINMENT—my cable bill more than doubled 3 years ago before I got rid of TV
    UTILITIES—electricity proposed +18% this year alone
    AUTO GAS—over 250% since 2000
    RE TAXES— my house assessed in 2000=$85k, 2007=$200k
    FED TAXES—That raise I got put my family in a whole new tax bracket =)
    AVERAGE HOUSE PRICE – just look around

    Now I DOUBLED my salary in one year, how many Americans can say that they have managed to do that in the past DECADE.

    The only thing that has NOT gone up significantly is salaries – purchasing & savings power – of the average American citizen.

    Without an appreciating house to sell, or a rich dead uncle, where does the average person plan to get their 20% down payment from?

    If I have to save till I am 50 just to put the down payment on a house, how do I plan to pay the 30 year mortgage?

    On my fixed retirement income?
    How about using my 401k that has tanked over the last few years?
    Oh I know, social security! That ought to be viable in 2030.

    No, I’VE GOT IT. I’ll get a nice job at Wal-Mart like many senior citizens making MINIMUM WAGE!

    Even if you have the savings where are you going to keep it?
    In the retirement accounts that are taking a beating?
    In the banks that are losing billions and being taken over by the Fed? (They only garuntee up to $100k so you better make sure the house you are saving for is $500k or less or you could lose a chunk of your down payment)
    How about under your mattress? Those depreciating greenbacks ought to come in real handy in 30 years with the rising price of toilet paper.

    Yhea we are greedy, but greed is what drives the US economy (and thus, even still, the world economy). I propose that desire and greed will always outpace ability and cash. Across the board, the ratio between “cost & cash” needs to be brought back into a reasonable spread, not the triple didgit differences we are still seeing today at every turn.

    Personally, I am at a loss as to how we turn the clock back on this whole shell game, but while the average American is trying to feed and shelter their families all while PAYING MORE for the privilege of getting to work where because of inflation they actually now make less, where exactly are they supposed to get 20% down payments for $200k-400k houses?

  3. Real C'ville - The Bubble Blog August 9, 2008 at 10:37


    Come on over to C’ville’s Bubble Blog! You’ll find lots of information about what you’re talking about…and folks who are like-minded, esp. in the comments section.

    Be sure to read our recent “Mid-Year Market Retort,”, which Jim has linked to elsewhere on this blog.

    And you might find interesting the interview with us at cVillain affirming–Jim graciously links to this in his sideblog.


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