NEWS- Waiting time: Housing inventory up; sales down
"Under Assessment!" "Bargain in the city!" "Best deal out there!"
Welcome to the new reality of moving real estate in Charlottesville; ads like these are proof it's a new world out there. In one recent instance, desperate sellers, trying to unload a Belmont property they purchased two years ago, are asking only slightly more than they paid– and sweetening the pot with the offer of a week-long Hawaiian vacation. Is it panic time for sellers, or are fears of a housing collapse misplaced?
"There's an awful lot of inventory," says real estate agent Jim Duncan, who analyzes the house-for-sale scene on his blog, realcentralva.com. Indeed, at the end of April, more than 1,100 properties were listed on the market in Charlottesville and Albemarle. By May 29– Hook press time– the number had soared to over 1,400. That's about 600 more than at the same time in the hot market of 2005.
Making the picture even darker for sellers: average days on market in April was 120, up from just 66 days in April 2005, when sales were blazing. More than twice the inventory, and nearly twice as long to sell it. But Duncan insists those ominous numbers don't spell doom.
"There are a lot of buyers out there," he says, citing the fact that 201 homes went under contract in Charlottesville and Albemarle in May. It's just that "buyers are taking more time than they used to– to do their due diligence," Duncan says.
That could be the inspiration for the owners of above mentioned 1920s dwelling at 742 Graves whose listing on caar.com promises buyers not only "pumpkin pine" floors and a "large cook's kitchen," but also a certificate for eight days and seven nights in Hawaii.
"It's slower," says Roger Voisinet. Because of the swelling number of listings, Voisinet finds that houses that aren't in peak condition are going begging, so he encourages sellers to get their properties in top shape before trying to sell. But not all seller seem to understand the new market.
"Sellers are still stuck back in the market of 2004 and 2005 with expectations," says Duncan. And for some homeowners, there's another problem– they may not even get their money back.
"There are people who paid at the height of the frenzy," says Duncan, "and are now negotiating from a position of what they need to make rather than what the market dictates."
There are other signs that things aren't as rosy as they used to be. As the Daily Progress noted in a Saturday, May 26 article, foreclosures advertised in that paper have increased by 27 percent in the past year. The article suggests the increase may be due, at least in part, to the number of adjustable rate mortgages– loans that offer a low interest rate for a short period of time– that were issued to help people buy homes they couldn't really afford. When the rates suddenly skyrocket– in some cases from one percent up to five and half percent after one to five years– some property owners default.
Realtors and sellers aren't the only ones noticing the change in the market– local officials are also paying close attention.
"We have noticed that the sales are coming in below the 2007 assessments," says Roosevelt Barber, the city's assessor. "If this continues, then we will make adjustments downward."
Barber says there are several neighborhoods where property assessments stayed the same between 2006 and 2007; those properties, he says, are selling for their assessed value. "Right now it's too early" to predict future assessments, he says. "We have to see what happens during the rest of the year."
County assessor Bruce Woodzell did not return the Hook's call by press time.
But despite the significant slowdown and the glut of offerings, there are still signs of life. Both Duncan and Voisinet say they've seen some properties move quickly. Voisinet says he had seven listings in the past two months that all sold for the full asking price within a week of listing.
"What was common was they were all in really good condition," he says.
Realtor Charlotte Dammann says a bidding war recently broke out over a downtown home, though she declined to give the address because the deal hasn't closed yet. And Duncan says he's observed a similar phenomenon.
"In little pockets within the area, I've seen multiple offers," he says.
"My buyers have not won any of those bidding wars," he adds, "but I feel better than if they had. There's always going to be something else that comes on the market."
Apart from those "hot pockets," Duncan says, for the majority of sellers, a bidding war simply isn't in the cards any more. "It's frustrating," he says, "to advise sellers that sometimes there's nothing they can do but wait."