Charlottesville Real Estate Market – We Don’t Know What We Don’t Know

With all due respect to Don Rumsfeld

Some segments of the local real estate market are absolutely seeing improvements while others are just beginning to experience significant downturns. Calls for an “end to the recession” however are premature and, in my opinion, irresponsible.

We don’t know:

– How many more foreclosures will happen in the Charlottesville/Albemarle/Central Virginia area. Heck, we don’t even know accurately how many there are now or how many are still out there that have not yet hit the market, nor do we know with any trustworthy accuracy how many foreclosures have sold this year, although the number is absolutely more than one might think.

 Bigger Pockets blog is predicting another wave of foreclosures. And the WSJ reports that the possible "’Wave’ of Foreclosure Listings might never happen. Who’s right?

Sean O’Toole of ForeclosureRadar says in the above-linked WSJ story:

“When you have this much government intervention going on, things don’t necessarily proceed as they should.”

– Where the shadow inventory is – that being inventory currently held by sellers unable to sell who are renting (often for a monthly loss) and inventory currently held by banks who have not yet released said inventory to the open market.

– What the Fed is going to do to interest rates. Surely they’re going to continue fabricating "money." Right?

– How many more banks are going to close. (Problem bank list at Calculated Risk)

– What’s going to happen to unemployment.

Charlottesville Unemployment trends - courtesy Wolfram Alpha

– What’s going to happen to the homebuyer credit. Will it be extended? Increased? Expanded? There’s a "Buyer Frenzy" now … but how long will it last?

H.R.1993 First-Time Homebuyer Credit Extension Act of 2009 (111st congress)

H.R.2606 Home Buying Credit Expansion Act (111st congress)

H.R.2655 To amend the Internal Revenue Code of 1986 to expand and extend the first-time homebuyer credit. (111st congress)

H.R.2801 Home Ownership Moves the Economy (HOME) Act of 2009 (111st congress)

S.1230 Home Buyer Tax Credit Act of 2009 (111st congress)

H.R.2619 To amend the Internal Revenue Code of 1986 to temporarily expand the credit for first-time homebuyers to all homebuyers and to allow individuals a temporary refundable credit against income tax for the costs of refinancing acquisition indebtedness secured by their principal residence. (111st congress)

We do know, with reasonable certainty: (PDF report here)

– How many homes are for sale in the Charlottesville area MLS. * Central VA MSA/Albemarle/Charlottesville **

Active – 2349/1039/323

– How many homes are under contract.

Under Contract – 432/222/72

– How many homes sold last month.

Sold in July – 281/159/65

Sold #’s for Charlottesville and Albemarle in July:

2009 – 281

2008 – 285

2007 – 322

2006 – 420

2005 – 411

2004 – 425

2003 – 372

2002 – 330

2001 – 333

2000 – 274

Beyond that, we’re speculating and making educated guesses. I’m going to be consistent. We won’t know where we are today until we have the benefit of 18 months of speculation.

* This post has been scheduled for nearly a week, but this post from the Big Picture is very much in line with my thinking.

** As of Monday, 24 August around 7:30am

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  1. Debaser August 25, 2009 at 09:22

    Hi Jim,

    The report you posted in July had a filter of:
    Category – Residential / PropType: DET, ATH, CND
    compared to this month’s report which just has a filter of:
    Category – Residential

    Is there a difference between these filters? The avg. sale price seems to be significantly higher in some cases.
    eg. Feb 2009 went from 99 sales @ $348k avg to 101 sales $388k avg.

    I don’t think this is just a case of some late arriving sales data as this trend appears in previous years as well and is only ever increasing the avg price.
    eg. Aug 2008 went from 203 sales @ $333k avg to 207 sales at $435k avg
    and Sep 2006 went from 217 sales @ $352k avg to 218 sales at $410k avg (which would require the one extra sale to be at exactly $13 million)

  2. Jim Duncan August 26, 2009 at 06:37

    Debaser –

    Thanks for pointing that out. They are in fact the same reports, but there may be an oddity/anomaly in how the data is being run … MLS data is occasionally inaccurate.

    There was one property that sold in Albemarle in July for $7 million ….

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