Charlottesville Virginia Real Estate

I found it interesting that Charlottesville, Williamsburg and Roanoke were the only three parts of VA with real estate value increases in Q2.  I guess they are college towns and all, but it doesn’t feel like prices are increasing here.  Things feel a little less than flat from 2 years ago but I don’t have a very large sample size.

The News Virginian has a nice article about assessment appeals.  In Waynesboro, land owners have seen value rollbacks as small as $100 and as high as $3 million.

I’ve been reassessed serveral times but each time, though I was unhappy, I thought the new value was fair, or maybe a little low. If you think the assessment is too high, contest it.  You don’t need a lawyer and there are no fees associated with doing so.  You have nothing to lose.  Richard Spurzem gained tens of thousands of dollars.

A real-estate developer from Charlottesville, Spurzem made headlines during the 2005 reassessment for convincing the appeals board to make a major slash to his shopping center’s valuation, arguing in part that the west-end site held little attraction for big-name commercial endeavors.

In Charlottesville, to appeal an assessment, you have 30 days from the date of the assessment mailing to appeal, by either calling or visiting the Real Estate Assessor’s Office in City Hall. You can then review the data used in computing the assessment and, if necessary, schedule an inspection of the property. “After this, should a dispute still exist, you may appeal to the Board of Equalization. The three-person board, appointed by the Circuit Court, is composed of City property owners. The board may affirm, reduce or raise the assessment, if in their opinion such adjustments are necessary to equalize the tax burden upon all citizens in the City. If you are dissatisfied with the Board’s decision, you may appeal to the Circuit Court. If you have assessment questions please call the City Assessor’s Office at 434-970-3136.”

I enjoyed the overview of Cville Republicans and the real estate tax issue before the city council at the Charlottesville Tomorrow Weblog today.  They have a great picture of Albemarle County Republicans Chairman Keith Drake’s over-the-top SUV / traveling billboard.  I like Drake’s approach:  only increase your budget if you need to rather than start the budget process with pockets burning from a real-estate tax windfall.

The Staunton News Leader had a Neat Article About Augusta County Property Values, detailing how the housing market in Staunton, Waynesboro and Augusta County has risen drastically due to pressure from the east.  The big selling point here seems to be price pressure from Charlottesville and Winchester, which makes Augusta County and its cities seem like an inexpensive alternative.

“Augusta has a significant amount of spillover growth, just on your side of Afton Mountain, from Charlottesville,” said Theodore Koebel, director of the Center for Housing Research at Virginia Tech. “You have people commuting over the mountain and buying homes because, compared to the Charlottesville area, they may be seen as a bargain.”

Buyers priced out of Harrisonburg might be looking south for housing options, said Darryl Crawford, a planner who analyzed six years of sales data to compile the newest report. Sales in greater Harrisonburg dropped in 2005, but remained steady in greater Augusta.

“For somebody who works in Harrisonburg, they could easily live in north Staunton or Augusta County,” said real estate agent Diane Woodson, who markets her Staunton and Waynesboro houses to buyers in Harrisonburg and Charlottesville.

But the report also shows housing cost increases outpacing wage increases locally. When adjusted for inflation, home prices rose 50 percent, but wages actually dropped by $161 a year in Staunton and $1,998 a year in Waynesboro. 

… 

“I don’t think the city, or anybody else, is putting enough emphasis on affordable housing,” said Staunton City Councilwoman Rita Wilson. “The average person is being pushed out.”  Koebel said it is important not to read too much into the rising home prices for now. The Augusta market is still small enough that one new subdivision or a few expensive purchases could swing the statistics.

This is good stuff.  DailyProgress reports that the Albemarle County Republican Committee is seeking a substantial decrease in the county’s real estate tax rate, now 74 cents per $100 of assessed value.

The Republicans’ argument hinges on a Virginia law that requires localities to hold a public hearing if property assessments go up more than 1 percent. If localities do not hold the public hearing, the tax rate cannot be set higher than the rate that would account for the increase in assessments.

In this case, Albemarle County Republicans say the rate would fall to 58 cents per $100 of assessed value to account for the rise in assessments. That amount would give the county slightly more in real estate revenue than what it had last year - that’s the point of the law, proponents of the Republican’s view say.

Per the DailyProgress Charlottesville assessments are up big this year, hitting poor neighborhoods particularly hard.  Here’s a chart of the percent increases:

Charlottesville tax districts with the highest and lowest percentage increases in existing housing assessments:
Top 5
1. Fifeville - 32 percent
2. Venable - 27 percent
3. Willoughby - 24 percent
4. Forest Hills - 22 percent
5. (tie) 10th & Page - 20 percent
5. (tie) Ridge Street - 20 percent
Bottom 5
1. University-Maury Hills - 0 percent
2. (tie) Towles-Merryden-Ivy Terrace - 3 percent
2. (tie) Azalea Gardens-Green Valley - 3 percent
4. 28 Holmes & North Avenue Area - 6 percent
5. Little High St./E. Jefferson St. - 7 percent

From the article:

The assessments of houses in Fifeville jumped 32 percent this year, the highest rate of any tax district in the city, following a 24 percent jump the prior year. Values of homes in the Ridge Street area spiked by 20 percent, compared with 8 percent the year before.

The average increase of existing residential home assessments in the city was 16.2 percent, with the typical Charlottesville house now worth approximately $280,000, said Roosevelt Barbour Jr., the city’s assessor.

Driving the demand for houses in these communities is the old real estate mantra of location, location, location. Situated halfway between UVa and the Downtown Mall, Fifeville and 10th and Page now draw young couples like the Pearsons who are attracted by easy access to the city’s main commercial center without the necessity of owning a car. 

I’ve been involved in Central Virginia real estate for more than a decade and the best time to buy has always been “a couple years ago”.  In hindsight that means NOW.  I’ve been more bearish lately on Charlottesville, feeling like things are as high as they can sustainably be right now.  The Staunton and Waynesboro markets seem to have more runway, in my opinion.  I’m not ready to say that a single family home in Charlottesville is a bad investment, but for investment property, I think greener fields lie elsewhere.

There does seem to be an oversupply of townhomes in Charlottesville, but those prices aren’t coming down like they are in other parts of the country.  I think the developers of the condos and the apartments-converted-into-condos in Cville are sufficiently diversified in the cash-cow that has been the Charlottesville real estate economy, that they’re neither willing nor needing to sell at bargain prices to cut their losses.  They’d just as soon double down.  The real opportunity in Charlottesville seems to be for people wanting to rent those condos.  When there’s oversupply in housing, even if the owners won’t sell at a loss, they still would rather lose money with low rent than eat the entire mortgage.  Empty apartments are expensive.

Sunrise Trailer park, on ridge street near Old Lynchburg road has been purchased by the local chapter of Habitat for Humanity (see: Habitat Affiliate Buys Old Trailer Parks / Charlottesville Group is First in U.S. To Try Redevelopment Plan)   Continue Reading »

The News-Virginian (which I will commend for having top notch real-estate articles and being one of the best newspapers I’ve ever read… in Waynesboro, VA of all places!) reports that assessment values will rise 35% on average in the City of Waynesboro next year. 

Breathe property owners… OK.  now the city will likely lower the tax rate substantially, but politicans can’t resist the opportunity to use free money to fund some pet project.

Per the article:

According to a report handed out to City Council this week, an average increase of 35 percent is taking hold citywide - the single largest jump assessor John Kiger says he’s ever seen.

“It’s the biggest reassessment I’ve been involved with, period,” said Kiger, who has 22 years in the field, the last 18 spent in Waynesboro.

Charlottesville Assessments Contionue to Increase Faster than Property Values, narrowing the gap between the market value and the taxed value. 

After decades of nominal assessment increases, the City of Charlottesville continues its trend started in the late 90’s of making assessments closer to fair market.  It used to be your assessment stayed pretty steady near the price you paid for it, until you chose to sell.  One landlord told me:

“I bought my first house in Charlottesville for $130K in 2001.  It was then assessed at $60,000.  Todays that assessment is over $220,000.  That’s a 300% growth in taxed value in six years!”.  Per the Daily Progress article today:

Charlottesville’s assessed property values increased by an average of 14.3 percent during 2006, a slight drop compared with the previous year’s assessments, according to a Tuesday press release from the city.

In 2005, the assessed property values rose by an average of 15.9 percent.

The article in the Cav Daily discusses the new millionaires who owned property along Brandon ave.  Those prices are making the University’s trade with Woddard Properties for all the Brandon Ave apartments, which seemed ridiculous to me at the time (that huge parking lot on the coner and $5 or 6 million for a hodge podge of Brandon Ave. properties) more reasonable.

The University needs to pull out the eminent domain card just once to keep from getting gouged.  They forked over millions this month to save face with the community.