Thursday, April 23, 2009

Glenmore Analysis

A reader asked me to evaluate in general the Glenmore neighborhood over the last 5 years.

Here is what is happening in regards to sales prices since 2004:





As you can see the average house price has hovered around $700K. There are only 7 sales in 2009 in Glenmore so it is not much of a distribution to draw any conclusions from.


If we look at the difference between the 2009 assessed value and the last sale price we see the following:


There has only been 7 properties that have sold in 2009 for Glenmore, and the average price paid is $12.5K LOWER than assessed prices. Bear in mind that I am using 2009 assessments to compare to sales in previous years, that is why 2006, 2007, and 2008 show negative differences because at that time the market was higher than it was now, and I am not using the corresponding years assessment data to compare it to.

What does this all tell me? Glenmore on average has held values around $700K and probably will continue to do so, however with more focus being paid on assessed value property owners will probably be thankful for higher assessments.

What do you think?

28 comments:

  1. Scott,
    As an outsider who has not been to Glenmore yet, the message I get from numbers that indicate relatively flat prices is that while other areas gained cachet in the up years, maybe Glenmore will hold its value relatively well now. Perhaps its amenities will make a difference. Also, it looks like a well-planned community, whatever its various plusses and minuses. Is that true?

    The contrast with Old Trail--is it proper to now dub it "troubled Old Trail"?--seems striking.

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  2. i do not know glenmore either, but i cant believe that most of the area will see 20-40% drops and glenmore will see a slight decrease. with all the nice places to live in town, why would they hold value over others?

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  3. There was a set of data that was missing from the analysis above that I had to discard. When I downloaded the data from the County it showed the total value as 0 for about 13 properties. Those sales happened prior to 2009.

    They sent me a message saying that was fixed, I will rerun the numbers later today and update the graphs and see if that had any impact.

    Anonymous 2- Not all areas are going to drop by 40%. It is all dependent on location. I believe it has more to do with the fact that assessments have only fallen by 7% in those neighborhoods.

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  4. there was a foreclosure auction scheduled recently on a Glenmore home - don't know how it went down. Not the first and won't be the last. May bring prices down a bit...

    April 17 at 5pm at the Albemarle County Courthouse

    Property: 1832 Westerham Street

    Debtor: Richard R. and Heather R. Wightman

    Amount owing: $873,000

    Bidder brings: $20,000

    Info: Samuel I. White PC 757-457-1460

    Parcel Information

    Total Acres 0.5360
    Primary Prop. Address 1832 WESTERHAM ST
    Other Address N/A
    Property Card(s) 1
    Lot 45 PH 2
    Property Name N/A
    Subdivision Glenmore

    Notes Subdivide Information Deed Book, Page (1717 , 423 ) Conveyance (27038 ) Date of Sale (06/23/1998) Transaction, Date (200500690 08/28/2003)

    Owner Information

    Owner WIGHTMAN, RICHARD R OR HEATHER R
    Address 1832 WESTERHAM ST
    KESWICK VA, 22947

    Owner as of Jan 1st WIGHTMAN, RICHARD R OR HEATHER R

    Most Recent Assessment Information

    Year 2009
    Assessment Date 01/01/2009
    Assessment Reason Reassessment
    Land Value $189,000
    Land Use Value $0
    Improvements Value $589,800
    Total Value $778,800

    Most Recent Sales History

    Previous Owner MGR DEVELOPMENT CORPORATION
    Owner WIGHTMAN, RICHARD R OR HEATHER R
    Sale Date 10/31/2006
    Sale Price $970,000
    Deed Book/Page 3315/281
    Validity of Sale Valid Sale

    Other Tax Information as of Jan 1st

    State Code Single Family Resid (Urban)

    Tax Type Reg. Taxable

    Parcel Level Use Code Single Family

    Primary Zoning Designation Planned Residential Develop

    Appraiser HFT

    Albemarle Links
    Map Property
    Printable Page
    PDF Tax Map
    County View

    External Links
    Google Maps
    MapQuest
    Windows Live Local
    093A4-00-Q2-04500for Parcel ID

    ReplyDelete
  5. There's really no comparison between Glenmore and Old Trail except that they are both developments.

    People who choose to live in a development in Keswick, Glenmore, are aspiring to the "horsey" lifestyle, even if they don't have horses; it's a nouveau riche aspiration toward the Keswick Hunt and the landed gentry that have been in Keswick for a couple of centuries. Literally. That's how old the farms are.

    Crozet is the "wild" little brother of Cville, and had some virginal land ripe for the taking. Old Trail is supposed to be mixed use/mixed price points. It's much newer, and you have to assume that with the recession and the attempt to sell it, it's in trouble and the buildout will take much longer than expected.

    If you buy now, april to august, you're going to pay too much, no matter where you are in this area.

    Prices will drop, and precipitously, with the coming end of the bear market suckers rally, the bank stress test results, more foreclosures at every price point in this area AND the realization that the bubble prices in this area are actually not what the houses are worth.

    Sure, nobody's making more land, as they say. But there are more than enough houses to go around for the few buyers who are interested in or who can afford them right now in this area. And the higher the price range, the fewer the buyers.

    ReplyDelete
  6. I think what this shows is that the market has frozen while sellers try and dig in their heels and sell at "last year's" prices. There are always a small handful of buyers in any market, and those are the transactions you're seeing. In order for sales numbers to pick up and the, 2x the nationwide level, glut of inventory (which appears to be rising like clockwork every month on caar.com) to reverse, prices need to adjust to the new reality (imho, down 20-25%). Until then, only the bottom end of the market (read: $8k tax credit, <$417k loans) and the tippy-top (read: cash offers, $1.2mm+) will sell. The middle ($500-$1mm) will ratchet down in one fell swoop come late summer/fall.

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  7. Concerning above post, low end is currently doing OK generally. But high end is barely breathing.

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  8. I agree with everything posted above! I would add that I've noticed some price erosion on some properties in Glenmore. But these are houses that were wildly overpriced to start, are clearly inferior and/or just plain ugly, and have been on the market since last fall (or summer). Many others in Glenmore persist in bubble pricing.

    Also, it should be noted that one of the seven sold properties in 2009 (on Darby) was a truly exceptional place that was bought for $1.8 mil about three years ago and was sold immediately for $1.5 mil. That may skew the results.

    As for Old Trail, there are many single family properties for sale there, and the prices seem a little more rational. And I understand that the house on Westerham is just one of several headed for foreclosure (and it's not a huge community at present). As others have said, a major shakeout is imminent in the Charlottesville/Albemarle County real estate market.

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  9. It appears to me that there have been only three sales in Glenmore in 2009 aside from the $1.5 million property. There are some pending deals but of course we don't know the sales prices yet. I agree that many properties currently on the market there seem way overpriced.

    Two questions. How do you know some houses are clearly inferior--from the photos alone or have you been there? If you're saying several properties in Glenmore are heading for foreclosure, how do you know that? I think Westerham is there. Thanks.

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  10. I've gone to several open houses in Glenmore. At certain price points there are certain expectations. Small, ugly, outdated kitchens are a good example. If I'm paying say 25% more for a house in Glenmore, then I would expect it to be at least as nice as the house I just sold, but few there pass that simple test.

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  11. Glenmore may have the same self-fulfilling prophecy as Ednam and Farmington have. People seem to be willing to spend obscene amounts of money for IMHO very little value other than to say that they live in those neighborhoods.

    Driving through Farmington reminds me of Bushwood in Caddy Shack!

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  12. I agree completely about the kitchen. At those price levels, it better be nice or forget it.

    Scott: Leaving aside your obvious bias against upscale neighborhoods, is Glenmore any more overpriced than similarly priced properties in Albemarle as a whole?

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  13. I am not biased against upscale neighborhoods, I am biased about overpriced neighborhoods that consider themselves upscale solely based upon the obscene price they paid for it.

    What other neighborhoods do you want to compare Glenmore to?

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  14. Scott, if you are referring to people who live in neighborhoods who pay high prices to live there, that is based on the fact or at least a generally held opinion that such neighborhoods are particularly attractive for various reasons. In real estate, they call that "location, location, location." Whether you, I or anybody else in particular would want to live there is obviously subjective.

    Concerning Glenmore, my question is whether the current asking prices, as overvalued as they seem to be, are really any more so than the overall market--that is, properties in that general price range in Albemarle Co.

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  15. I would argue that it is more subjective than just location, location, location. You can drive a Honda, a Mercedes, or a Ferrari. All those get you from Point A to Point B but it all depends on how much you want to show off how much money you spent on a car! (smile)

    I think this community as well as others like it are holding their value, because people that have this kind of discretionary income fall for the trap that a house is more of a status symbol than a dwelling.

    High net worth individuals tend to want to live next to other high net-worth individuals. It creates its own sub-culture, and in Farmington and Glenmore they have country clubs that cater to this demographic.

    The important thing to note is that although this market is pricing higher on average for Charlottesville buyers are buying closer to the 2009 assessed values.

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  16. Scott, you support my point. I already stated that location affects what some people will pay, but others won't want to live there anyway. Choice of car is the same thing. Certainly status is a factor for some people. But some cars are more enjoyable to drive than others, and some neighborhoods are nicer than others.

    You say: "The important thing to note is that... this market is pricing higher on average for Charlottesville...." I assume you mean Glenmore. How do you determine that?

    You also say "buyers are buying closer to the 2009 assessed values." Excellent point. But if that is the case, how is Glenmore overvalued compared with similar homes elsewhere in Albemarle?

    Also, you said previously that seven Glenmore properties have been sold in 2009. I find only four. What am I missing? Where did you find the seven? Thanks.

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  17. There are now eight sales in the system for Glenmore:

    1. 3/30/2009 3148 SANDOWN PARK RD sold for $615,000 sold/assessed ratio 102.3%
    2. 2/27/2009 1707 PADDINGTON CIR sold for $784,610 sold/assessed ratio 92.0%
    3. 2/26/2009 3208 HEATHCOTE LN sold for $950,000 assessed ratio 97.6%
    4. 2/17/2009 1961 PIPER WAY sold for $664,200 sold/assessed ratio 106%
    5. 1/28/2009 1564 HEATHROW LN sold for $529,000 sold/assessed ratio 91.0%
    6. 1/26/2009 1.732 acre land sold for $345,000 sold/assessed ratio 102.0%
    7. 1/15/2009 0.684 acre land sold for $180,000 sold/assessed ratio 84.7%
    8. 1/13/2009 1132 CAMBRIDGE HILL LN sold for $1,185,000 sold/assessed ratio 103%

    Average sale price for Glenmore for 2009 is $656K, for Albemarle county it is $460K.

    My next blog post will be an analysis on all of the different neighborhoods.

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  18. Scott,

    Your point about sales price vs. assessed value is very good. Maybe assessed value is a relatively good indicator of value.

    Concerning the Glenmore sales for 2009, I don't think land should be put in with houses. Also, when you refer to average sales prices, median may be more useful.


    , even though

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  19. I don't think that the assessed value is always a good indicator of value, but rather buyers are having a hard time justifying paying much more than that for properties.

    Next year if assessments are kept at the same level or higher I believe you will start to see more buyers offering below assessment assuming that our economy is still in the same mess that it is now.

    I use the mean price because I have my system create a normal distribution around the property sales. Using the mean and the standard deviation gives you a good feel for the curve. I can add the median in to highlight it in the data.

    I like your idea of separating the land sales from the home sales. I will look to refine that in the next analysis.

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  20. hope everything is ok? we have not seen a new entry since april.

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  21. I'm reading that real estate prices will still fall for the next five years across the country. That's how big the gap is between bubble price and what people can afford. Sellers are a dime a dozen, buyers are few. People are starting to realize that renting is far better in these times then owning property. Homes cost to buy (realator fees), maintain, upkeep of home owner association fees, along with property taxes. CDs and Bonds don't seem to have that baggage.
    enough said!

    ReplyDelete
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  23. We rented in Glenmore for the past two years and really grew to love it. It is a great community with lots of children. It's beautiful, safe, quiet and full of nature. If I could afford to purchase, I will pay extra money to live in a community like this.

    ReplyDelete
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