Date Archives May 2012

Daily Progress Sold to Berkshire Hathaway

C-Ville links to Media General’s non-pay-walled press release. The Daily Progress’ pay-walled iteration of the press release is here.

We need local news reporting; here’s hoping the Berkshire Hathaway purchase provides better local news writing and reporting by the DP.

For those of you interested in the residential real estate market, today’s interest rates (~4%) look pretty good in comparison, don’t they?

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How is “Local” (Food, Farm, Business) Defined?

In case you missed the conversation (150+ comments) last week at cvillenews about the Charlottesville City Market’s first vendor who happens to be a franchise, it’s worth a read. The main question I see is – what does “local” mean to you? ( outside of the context of a City farmers’ market)

Charlottesville has seemingly been a leader in the locavore movement (see: Forbes and Tom Tom’s Locavore Expo for starters) and it’s been interesting and fun to watch and participate in the “I really want to know where my food is coming from and from whom” evolution. See: Buy Fresh Buy Local.

Does local mean: only local money and people? What if you grow and franchise? Are you now less local?

To what other industries does the demand for “local” extend?

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Rebutting the Realtor Rip-off Argument

The great realtor rip-off” – what a great attention-grabbing headline from The Economist.

But … the author seems to have had a bad experience with a real estate agent that must have precipitated his rant. (try as I might, I cannot find the author’s name on the post, otherwise, I’d ask)

I almost stopped reading when I read that one of his sources for proof was Glengarry Glen Ross. But where’s the fun in not reading a rant?

I’ll be the first to tell you that there are too many unqualified real estate agents practicing real estate. I’ll also be the first to argue that those professional agents who truly represent their clients’ best interests are often underpaid.

Stepping through some of the author’s arguments:

“Agents routinely tell buyers not to worry about the fat commission because “the seller pays it.””

No. A lot of agents might, but I have no idea; my role is to represent my clients, not know what other agents say to their customers and clients. But … I think assuming the consumer is stupid is the wrong approach. Buyers (and sellers) know that nothing is free.

Read: Who Pays the Buyer Broker Fee? or A Call for an End to Cooperative Compensation. or The Wall Street Journal Gets it Right on commissions.

“In most areas a few big brokers handle most transactions.” Partly true.

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Why Isn’t Bicycling to School More Accepted/Viable/Practiced?

Accessibility/proximity to schools and parks are two of the most common criteria my buyer clients specify when searching for homes in Charlottesville, and more often, bikeability is a factor in addition to walkability. Walkability increases property values;

This is an excellent article from Bicycling magazine that describes the impediments presented to those who try to ride bikes to school; a few choice quotes –

Childhood obesity rates are soaring, youth participation in sports and other active pursuits is plummeting, and a generation is coming of age with little understanding of the joy and freedom of unsupervised play. There’s a simple solution—but all across the nation our schools earn a failing grade when it comes to letting kids ride their bikes.

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I’ll Know Housing Recovery in Charlottesville When I’ve Seen It

The housing recovery in Charlottesville (and presumably everywhere, but knowing this market is hard enough) is kind of like pornography.

I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description [“hard-core pornography”]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that. [Emphasis added.]

—Justice Potter Stewart, concurring opinion in Jacobellis v. Ohio 378 U.S. 184 (1964), regarding possible obscenity in The Lovers.

How will the “recovery” be defined? Is now the time to buy? (or sell?)

First, we’ll know by hindsight. When we have the luxury and the benefit of 12 to 24 months of looking back, we’ll be able to tell.

Transactions – volume of transactions – what is normal volume of sales transactions in the Charlottesville MSA? I don’t know; homeownership rates are declining. Last year, 1755 single family homes sold in the Charlottesville MSA (including Louisa). In 2002, 2479 single family homes sold. I’d put the “sustainable” rate of single family home sales somewhere in between those two numbers.

Price – stability or appreciation showing themselves

Foreclosures and short sales – fewer than today to none.

Shadow inventory – known and dispensed with; no longer a question of uncertainty.

So … is the housing market in Charlottesville recovering?

Calculated Risk says:

The debate is now about the strength of the recovery, not whether there is a recovery. My view is housing will remain sluggish for some time, and I expect 2012 to be another historically weak year, but better than 2011.


Consider this snapshot, from which I’m trying to :

In Charlottesville and Albemarle:

107 homes went under contract between 15 April and 1 May 2011. 64 of those were single family. 23 were attached.

144 homes went under contract between 15 April and 1 May 2012 – a 26% increase! – 92 (30% more) were single family. 23 were attached.

In the Charlottesville MSA (Charlottesville, Albemarle, Fluvanna, Greene, Louisa, Nelson):

156 homes went under contract between 15 April and 1 May 2011. 109 (70%) were single family.

186 homes went under contract between 15 April and 1 May 2012. 132 (71%) of those were single family.

That sure looks like we’re on the path to recovery, right?

In the MSA in the above timeframe, 22 of those contracts in 2011 were either short sales or foreclosures (6 & 16, respectively). In 2012, 19 of those were short sales or foreclosures (8 & 11, respectively). “A 14% decline in distressed contracts!” surely is a better headline than “3“, right?

It’s too early to tell with respect to foreclosures/short sales/distressed sales

Charlottesville Foreclosure Rate and Foreclosure Activity Information | RealtyTrac

My personal favorite:

When will U.S. house prices recover? Likely never. But that’s no reason not to buy.” and believe it or not, the article reaches some salient conclusions, echoed by many if not most of my recent buyer clients’ decisions –

That’s why prospective buyers should stop focusing on the vague hope that house prices will jump from here and focus instead on the functional value houses provide for the money. In most markets, they provide enough of that to make buying a good deal.

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