Northern Virginia Bits Bucket 10/30/2008

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Northern Virginia Bits Bucket 10/29/2008

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S&P/Case-Shiller® August Home-Price Index

The S&P/Case Shiller® composite index (graph here (pdf file)) for the month of August was released today.

"'The downturn in residential real estate prices continued, with very few bright spots in the data,' says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. 'The 10-City Composite and the 20-City Composite reported record 12-month declines. Furthermore, for the fifth (5th) straight month, every region reported negative annual returns. This started when Charlotte, NC, was the last region to have been in year-over-year decline for 20 consecutive months. Of the 20 regions, 13 of them had their annual returns worsen from last month’s report. As seen throughout 2008, the Sun Belt markets are being hit the most. Phoenix and Las Vegas are both reporting annual declines in excess of 30%, and Miami, San Francisco, Los Angeles and San Diego are all in excess of 25%.'”

Northern Virginia Bits Bucket 10/27/08

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Northern Virginia Weekend Bits Bucket 10/25-10/26, 2008

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Northern Virginia Bits Bucket 10/24/08

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Northern Virginia Bits Bucket 10/22/08

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Northern Virginia Bits Bucket 10/21/08

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Fairfax "Furloughs"

Fairfax County is short on cash. From WTOP:

"Short on money in this turbulent economy? So are local governments.

Fairfax County is telling more than 9,000 county employees to take Jan. 2 off - without pay - to save $2 million. The supervisors and their staff will also go without pay for that day.

The furlough is an unprecedented move by one of the region's more affluent counties.

Fairfax County is $60 million short for 2009 spending and could be half a billion dollars short for 2010".

I wonder how the foreclosure house shopping is going . . .

The comments at WTOP:

Shortfall - Really?

by Tim S. @ 5:24pm - Mon Oct 20th, 2008

FYI there is a group of Fairfax school employees this week in Costa Rica on a conference. With the so called shortage of money they are in beautiful Costa Rica. Think this is responsible management of your tax dollars, I don't.

Doubt me? Go ahead and call the county on it.

If only...
by ricky ricardo @ 5:37pm - Mon Oct 20th, 2008

they didn't spend like drunken sailors they'd have money now. I'm glad I moved. I feel sorry for you poor suckers, because they're going to send that carpet bagging slob Connelly to the House. I guess you get what you ask for. Fairfax is the new Montgomery.

One day?
by Alan O. @ 6:26pm - Mon Oct 20th, 2008

That's not a furlough. That's a gift.

Northern Virginia Bits Bucket 10/20/2008

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Northern Virginia Weekend Bits Bucket 10/18-10/19, 2008

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Picking Apart the "Post" Again

Hattip to Tabitha for the mention of the Post's recognition of record September sales in Prince William County.

The article focuses on investors more than those buying a primary residence. It insinuated that those looking to buy for their own use were being pushed aside by cash-rich investors:

"Prices are low enough that it's an auctionlike competition when you go bidding for homes," said Maribel Alvarez, who specializes in foreclosures and short sales in Prince William. "Investors are purchasing low-end homes, so it's becoming harder and harder for first-time home buyers because banks are looking for 20 to 30 percent down."

Did FHA (3% down) suddenly disappear? Did the reporter corroborate "20 to 30 percent down" with any first-time buyers or their real estate agents?

Here's another gem:

"Even with the surge in sales, there were more than 5,000 active listings in Prince William last month, down from 6,500 a year earlier.

Because of the oversupply, banks are likely to continue slashing prices, dragging down property values for nearby homeowners, in order to maintain a competitive advantage over other sellers."

This is an interesting logical leap. Simply stating that there are 5,000 houses for sale does not prove there is an "oversupply" without telling us current and historical absorption rates. And we're also supposed to assume that because of this "oversupply" (how bad is it again?) that banks will keep slashing prices, in spite of record sales at current slashed prices.

The following was the only notable new piece of information that I gleaned from this article; I assume it's factual:

"There were 844 foreclosures in the county last month, land records show, up from 256 a year before and 40 in 2006".

BB&T Chief Speaks

From the Charlotte Business Journal:

"BB&T Corp. Chief Executive John Allison is calling for short-term fixes and long-term reforms to address the financial crisis.
. . .

His views are influential because he leads a bank that has weathered the financial crisis better than many, in the eyes of industry analysts. This week, BB&T (NYSE:BBT) reported profits of $358 million in the third quarter, down 19 percent from a year ago.
. . .

The only way to solve the fundamental problem weighing down the economy, he suggested, is to clear the nation’s housing market of its inventory of unsold homes. To do that, he proposed a 10 percent tax credit for buyers on all real estate transactions for a limited period of time. The credit would apply only to houses that already existed as of a certain date.

The housing market generally remains overvalued, Allison said, so such a tax credit could move buyers into the market quickly at prices both they and sellers would accept. He suggested that would be a better use of the $750 billion Congress recently set aside to buy toxic mortgage assets from the lenders themselves.

Longer term, he said Fannie Mae and Freddie Mac should be eliminated once the market has corrected, and Federal Reserve and Federal Deposit Insurance Corp. policies should be reformed to encourage more responsible behavior by lenders and borrowers".

Northern Virginia Bits Bucket 10/17/2008

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Northern Virginia Bits Bucket 10/15/08

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The Rappahannock Homes blog (real estate agent Julie Emery) waxes euphoric about September sales and the potential for high sales in October in Prince William, Fauquier, and Culpeper counties based on current contract volume.

Broker Frank Llosa notices luxury home (over $1 Million) contract volume in early October was down 50% from the last two prior weeks.

Northern Virginia Bits Bucket 10/13/08

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Northern Virginia Weekend Bits Bucket 10/11-10/12, 2008

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A Decade of September Sales

September sales were up year-over-year in every county we follow here, and prices, of course, took a hit.

Standouts from September: Prince William County YOY sales up 221% and at a 10-year record, median price down 43%, inventory down to under 5 months'; Fairfax County sales up 72%, median price down 25%. Fairfax County's inventory went to under 6 months from over 11 months one year ago.

Obviously, these sales were prior to the recent Wall Street meltdown. Confidence, availability of cash, employment, and credit availability will likely factor into the coming months.



Source: MRIS

Northern Virginia Bits Bucket 10/10/08

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September sales will be out today from the Metropolitan Regional Information Service.

Virginia's Budget - About a Billion Short

Thanks, Novahog, for the link:

"Virginia Gov. Tim Kaine is laying off 570 state workers as the state's budget outlook worsens. . . .

. . . The Democratic governor says the state is likely to be $973 million short this fiscal year and $1.5 billion short in the fiscal year that begins next summer".

The good news, as Novahog pointed out, is that thrifty Governor Kaine is going to "dry-clean his drapes less often".

Northern Virginia Bits Bucket 10/9/2008

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September sales will be out tomorrow from the Metropolitan Regional Information Service.

"Progress is Being Made"

An encouraging read from Calculated Risk on the adjustment process:

"Although I believe there are more price declines ahead (and therefore more homeowners with negative equity and more foreclosures), prices are much more reasonable today than in 2005".
. . .

"It's easy to get caught up in the day to day financial crisis and recession news - and this blog will continue to bring you the doom and gloom of the worsening recession. But it's important to remember that even though the adjustment process is painful, progress is being made."

Northern Virginia Bits Bucket 10/8/2008

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Housing Bubble 101

This is the edited version. I put up the original one a few days ago but it was pulled by NBC and changed.

From the LA Times:

But a comparison of the two versions shows that actually a little more than that was cut. What also was excised was any mention of the involvement of Massachusetts' Rep. Frank in the Sandler subprime mess.

Frank is the influential chairman of the House Financial Services Committee and an ardent political protector of Fannie Mae and Freddie Mac, which participated in the subprime problem.

In the original skit Sandler addresses Frank, saying, "And thank you Congressman Frank as well as many Republicans for helping block Congressional oversight of our corrupt activities."

To which Frank replies enthusiastically, "Not at all!"

All that's gone in the new version. . . .

Northern Virginia Bits Bucket 10/6/2008

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More on Fannie

Charles Duhigg of the New York Times has an article on Fannie Mae today which is part of a series of articles on "exploring the financial crisis":

"Those computer programs seemingly turned Fannie into a divining rod, capable of separating pools of similar-seeming borrowers into safe and risky bets. The riskier the loan, the more Fannie charged to handle it. In theory, those high fees would offset any losses.

With that self-assurance, the company announced in 2000 that it would buy $2 trillion in loans from low-income, minority and risky borrowers by 2010.

All this helped supercharge Fannie’s stock price and rewarded top executives with tens of millions of dollars. Mr. Raines received about $90 million between 1998 and 2004, while Mr. Howard was paid about $30.8 million, according to regulators. Mr. Mudd collected more than $10 million in his first four years at Fannie".

And,

"'When homes are doubling in price in every six years and incomes are increasing by a mere one percent per year, Fannie’s mission is of paramount importance,' Senator Jack Reed, a Rhode Island Democrat, lectured Mr. Mudd at a Congressional hearing in 2006. 'In fact, Fannie and Freddie can do more, a lot more.'"

Like what, Mr. Reed? Did you ever stop to think how this was possible in the first place?

Northern Virginia Bits Bucket 10/3/2008

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Northern Virginia Bits Bucket 10/2/2008 #2

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Gamblin' Man

House Financial Services Committee hearing, Sept. 25, 2003:

Rep. Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .

Northern Virginia Bits Bucket 10/2/2008

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S&P/Case-Shiller® July Home-Price Index

The S&P/Case Shiller® composite index (graph here (pdf file)) for the month of July was released yesterday.

"While the annual returns of the two indices continue to reach record lows, the pace of the decline has slowed, particularly over the last three months. For the three months of May thru July, home prices cumulatively fell about 2.2%; whereas for the three months of February thru April, and November 2007 thru January, the cumulative rates of decline were closer to 6.0-6.5%. 'There are signs of a slow down in the rate of decline across the metro areas, but no evidence of a bottom' says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s".

". . . Las Vegas remains the weakest market, reporting an annual decline of 29.9%, followed by Phoenix and Miami at -29.3% and -28.2%, respectively. Atlanta, Dallas, Minneapolis and Tampa showed improvements in their annual and monthly returns, but all four are still too close to their recent lows to determine if the markets have stabilized. While their annual returns are negative, Atlanta, Boston, Dallas, Denver and Minneapolis all reported positive returns for the three months or more."

Virginia Employment Update

Some employment news:

"Virginia’s unemployment reached 4.6 percent in August, the highest rate in the state since January 1997. William F. Mezger, chief economist at the Virginia Employment Commission, said the economy likely will slip into a recession at the end of this year that will continue through the first two quarters of 2009. The national unemployment rate is 6.1 percent. Northern Virginia had the state’s lowest unemployment rate, 3.6 percent, among the state’s metropolitan areas. Danville had the highest jobless rate at 8.1 percent. (Richmond Times-Dispatch)"

Northern Virginia Bits Bucket 10/1/2008

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