Bubble Blog gets tough on local assessments

For most Charlottesville and Albemarle residents, the real estate assessments mailed out last week brought a little bad news. Both the city and the county recorded a slight decrease in the average residential property tax assessments. Commercial property values suffered much the same fate. In Charlottesville, approximately 32 percent of properties declined in value, while 39 percent held steady.

And while $33 million in new developments—the Gleason and Rock Creek off of Cherry Avenue in the city, among others—increased the city’s property assessment average by .63 percent, city assessor Roosevelt Barbour, Jr. is reluctant to declare a rebound. “The market, I think, has a year or two before it bottoms out, probably around 2013, hopefully,” Barbour tells C-VILLE.

The C’ville Bubble Blog, a website that tracks local real estate trends, says the Charlottesville market “is nowhere near its bottom.” While the value of homes has plummeted for the second time on a national scale, “[the] Charlottesville area hasn’t even reached its first bottom,” say the site’s anonymous bloggers.

Since the Bubble Blog doesn’t pull its punches, we decided to ask the bloggers to assess the annual assessments and what they mean for the local real estate market.

What do the 2011 assessments not show, with regards to local housing?
“Assessments are not appraisals. They are not completed by people who have actually examined the home. Assessments do not show how many folks are at the brink of foreclosure, struggling to make home payments, unemployed, late on taxes, trying to get a mortgage modification. Assessments don’t show how few sales there are nowadays. Assessments don’t show soaring inventory. In some sectors, it’s 12, 18, 24 months’ worth. At the high end, it’s years’ worth.”

How do the assessments relate to the number of days properties spend on the market?
“‘Days on Market’ means almost nothing because it is manipulated. Houses are relisted and repriced to make them [resemble] ‘fresh’ listings, because listings get the most attention in the first 30 days.”

What can we expect from the local real estate market in 2011?
“The rest of the U.S. is sliding into the ‘double dip’ of the housing recession, and the Charlottesville area hasn’t even reached its first bottom.

“Nevertheless, since the stock market has recently surged, and January 2011 sales are about where January 2010 sales were (due to buyers going for foreclosures, short sales, and overall lower prices), plus there are low interest rates (4.8 percent), you’re starting to hear certain Realtors express optimism about the local market in 2011.

“This could be great news for buyers. [T]he impact will be that sellers, who have been trying to ‘wait out the market,’ will flood the market with even more inventory. This will push prices lower from their bubble peaks.

“This is bad news for sellers who bought between 2004 and 2010, because they have no equity and won’t be able to lower their asking prices. This will force them to bring cash to the closing table, go to a short sale, or go into foreclosure.”

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