Boom Dot Bust
“I’m going to have to move. A lot of people are going to have to. … We’re getting more and more young people coming over and paying too much for the houses. I can’t believe what they’re paying for some of them.”—Charles Lilly, 20-year Belmont resident, The Daily Progress, 2003
“People get displaced. I don’t know what to say about that. The good news is that [Charles] Lilly is a wealthier individual now because his house is worth a lot more.”—Rob Wilson, Realtor, The Daily Progress, 2003
People in Belmont had been complaining about rising tax assessments since at least the 1980s. When they shot up dramatically in 1993 on homes that were largely unchanged since being purchased 40 years earlier, the owners started to wonder if someone was playing some kind of cruel practical joke. To the city, the house was worth more every year, so the person living there had to pay for the increase in value when tax time came around. To the person living there, often as not an older person on a fixed income, the value of the house hadn’t changed. It was home and money was money.
“I guess they think we’re pretty dumb over here,” 81-year-old Myrtle Marks told the Daily Progress.
For an increasing number of people, the only thing that was dumb was not getting in on the deal by buying a house or two in Belmont. In 1992 houses sold for over $100,000 for the first time, and as values rose, $100,000 began to look like a bargain. The man who generated the values, City Assessor Glenn Branham, seemed to think so. Belmont, he told The Progress, was a “great place to invest.”
Over the next decade and a half, each crazy hike in Belmont’s tax assessments continued to make the news, despite having become a new norm. Two themes inevitably made their way into the stories. First, rich people buying houses were forcing out older, poorer residents. And second, rich people buying houses were sparking the neighborhood’s rebirth. The tension between the two possibilities played out in the headlines: Belmont’s look, image changing … City’s tax assessments: Investor’s dream, permanent resident’s nightmare … Belmont area revitalization gives neighborhood new look … Hip and Handy, Belmont offers fixer-uppers with urban cachet.
“Yuppies are rolling up their sleeves and scraping the old paint off [Belmont’s] stolid blue-collar image,” The Daily Progress wrote in 1990. The crowning achievement of the yuppie renovation came in January of 2003 when a Spanish tapas restaurant called MAS opened at the junction of Monticello Road and Carlton Avenue. There had been restaurants in Belmont before, of course, but never one described as “artisanal,” never one that was open late with a bar scene. Belmont restaurants catered to locals, they weren’t destinations (except maybe Spudnuts Donuts). Belmont had restaurants, but it didn’t have a “restaurant scene” until MAS.
The huge success of chef Thomas Rahal’s food showed that such a scene was possible, and so the yuppies poured another cup of Tanzanian peaberry, frowned harder at the blueprints, and kept building. Over the next nine years, Belmont saw the opening of a coffee shop, an art gallery, a jazz club, a yoga studio, a wine shop, and more restaurants offering ingredients with lofty pedigrees. There was a battle over late night noise when a restaurant began hosting bands, and for the first time parking became an issue, as the rest of Charlottesville rolled its car window down on Avon Street and leaned out to ask, “How do you get to Belmont?” Some businesses lasted, some didn’t, but the phrase “downtown Belmont” was now significantly less likely to provoke a chuckle.
For real estate agent Jim Duncan, the Belmont housing boom began in earnest in 2003. There was a duplex on Douglas Avenue, a nice house that needed a lot of work, but still a good buy for the wannabe investor Duncan was hoping to sell it to. Selling houses usually went like this: You put the house on the market on Friday, but didn’t show it until the open house on Tuesday morning, so Duncan told the guy where the house was and said they’d meet there Tuesday at 10.
That was the way it had always worked, but things were starting to change. The house lust gripping the nation as a whole had hit Charlottesville as well. Everybody knew you couldn’t go wrong with real estate. It was guaranteed money, especially if you found the bargains, and in Charlottesville that meant Belmont, where the average house assessment rose 35 percent in 2003, compared with 13 percent in the rest of the city.
At the same time, the giant real estate database known as the multiple listing service, or MLS, traditionally restricted to members of the trade, had recently opened up to the public via the Internet. What this meant was that between the house going on sale Friday and the open house Tuesday, there were three days for prospective buyers to hunch drooling over the computer checking the MLS every 30 seconds for new listings.
So when his client, who wasn’t familiar with Charlottesville, worried that he wouldn’t be able to find the house, Duncan told him not to worry. He just needed to look for the crowd.
“I kid you not,” Duncan said, “I think there were 18 sets of buyers ready to walk through. Tuesday morning, 10 o’clock, ready for the door to open. … It was chaos.”
The real estate orgy taking place in Belmont struck Duncan as insane. He was 26 when he began his career in 2001. Nothing had prepared him for a market where houses got five, six, even eight offers, where contracts were drawn for $200,000 and then sold for $240,000 before the 60 day closing period could even start. People were paying cash and buying houses with no inspection, no appraisal, nothing. Charlottesville had finally woken up to what Joan Schatzman and Bill Lanier had seen more than 20 years ago; Belmont was a goldmine.
The client didn’t buy the house on Douglas. Like a lot of people he was scared off by the ruthless bidding and skyrocketing prices. Duncan tried to communicate the new reality to buyers. How high were they willing to go? How crazy were they willing to let things get? It was a question he had to ask himself, as his job increasingly became not about helping clients get a good deal, but about preparing them to pay more than they wanted to spend. It was common to include escalation clauses in contracts, stipulating that although the offer was, say, $250,000, it could go up as necessary in $5,000 increments until it reached $300,000, or more. He hated the escalation clauses, and hated watching buyers get outbid on five different properties, but what could he do? The market had stopped making sense, and so buyers and sellers had to stop just to keep up.
Duncan remembers hearing it described perfectly on NPR: If you wanted to buy a digital camera, you’d probably look at Crutchfield, Best Buy, maybe a few online sellers. You’d read reviews and take your time, making what you hoped was a careful decision. That’s what you’d do for a $300 camera. But not for a house, not when the market was hot. No, when buying a house you had 12 minutes to decide whether or not to spend $300,000 or lose your chance. And instead of searching for the lowest price, you fought tooth and nail for the highest.
So, were the $400,000 houses in Belmont overpriced? Duncan quickly answers, “No.” There are plenty of arguments to the contrary, but from the market’s perspective, if a house sells, it isn’t overpriced.
At its height, the Belmont boom lasted about three years, from around 2003 until 2005, at which point the entire national housing market, after an epic bender, finally crawled home to sleep it off. Looking back, he can see the timeline clearly, but it was harder then, caught up as he was inside the whirlwind. He knew it couldn’t last, knew that the market wasn’t acting right. As prices rose, he asked his mom, a Charlottesville real estate agent for 24 years, and some other veterans for advice. They all told him they’d never seen anything like it before.
Duncan told people that he didn’t see a crash coming. Things would slow down, sure, moderate, but not crash.
After all, everybody was buying houses. But then everybody stopped. After the crash in 2008, all the old veterans told him they’d never seen anything like that before either.
Duncan told me he doesn’t know if the market has hit bottom yet. There are still houses selling in Belmont, just not as many and not so fast. One benefit of the crash has been the end of rampant flipping. The people buying now tend to be buying for the same reason they did at the turn of the century; they’re looking to settle down, in a house where they, and their loved ones, can grow old.
Living in Belmont
“Sometimes I Feel Like I’m The Only One Trying To Gentrify This Neighborhood” —headline in The Onion, August 23, 2006.
Growing up in Charlottesville I never knew Belmont existed, but when, after being gone for 11 years, I moved back to town in the summer of 2004, I was told that Belmont was the place to live, and the place to live was just what I was looking for. I rented an apartment in an old house a short stumble from newly hip MAS. In the mornings I walked to work Downtown, alone yet in procession with others like me, flowing over Belmont Bridge, so many of us similarly aged and clothed, similarly preoccupied with perfecting life. The right look, the perfect meal, the of-the-moment band, and the right neighborhood. That was how I thought it should be then.
Belmont was where Charlottesville’s hipsters and bourgeois bohemians were said to live, and yes, there were faux-hawks and record collections, mojito parties, and bumps of coke in vintage bathrooms. Everybody drove a Volkswagen, everybody read Pitchfork, and everybody seemed to have simultaneously developed a passion for Wüsthof knives.
That summer was a watershed moment for Belmont and for the discussion taking place about real estate and gentrification. In June, The Hook breathlessly reported on the first home sale over $400,000. The working class era in Belmont, the article declared, had ended.
America as a whole was seriously hooked on houses at the time: buying houses, restoring houses, flipping houses. Did you see those countertops? What brand are your faucets? Are you adding on? Tearing down? What’s the square footage? Love the closets, the fixtures, the bathroom, the backyard. Love the hardwood, love the open floor plan. Can you put skylights up there?…
Even I, who barely knew what a mortgage was at the time, started noticing the houses as I walked around my neighborhood. The new ones all seemed to be painted in pastels of green, brown, or gray, with incongruously modern additions slapped onto the back of an old cottage. American Gothic was becoming American Bauhaus, but I liked it. You never get bored looking at houses in Belmont.
Until recently there was never any question about who Belmont belonged to. More than any other neighborhood in Charlottesville, it had an identity, an identity so strong that 80 years later The Belmont Boys still define themselves by its borders. They’re from Belmont. They weren’t the educated sons of The University, or the children of lawyers and doctors. Their parents built and repaired the city. They were the hard ones.
“If you didn’t live over here, you didn’t belong over here,” Sonny Mawyer said with a laugh. “As the sun went down, you were expected to leave. You could come in to visit a while and date some of our girls, but we didn’t even like that too much.”
Belmont, he said, always took care of its own. But if Belmont is no longer Belmont, then who will take care of the people left behind?
Tommy Williams points to the bricking over of Main Street as the first major change to Belmont’s way of life. Before 1976, living there meant living close to the factory; with the construction of the Downtown Mall, it meant living close to the boutique. It took his generation a long time to adjust to this change in status. For them, success had always meant being able to leave Belmont. As adults, many of them moved to what they thought of as better neighborhoods, only to find that they couldn’t afford to go back to the place they’d escaped from.
It can be hard these days for the modern, white, liberal-type person like me to find a place to live that lets me live with myself. We all want to be able to walk to the farmer’s market, where we can purchase the pedigreed vegetables we like to chop with our Wüsthof knives. And as we walk, we want to wave and smile at people who, despite having lived different lives, live in the same place. But what if our arrival is what’s forcing those neighbors to leave?
We want to live in a gentrified neighborhood, but we hate the thought that we might be part of some malevolent force, a tool of class warfare.
Maybe gentrification doesn’t work that way. Lance Freeman, an associate professor of urban planning at Columbia University, conducted a study in 2003 that attempted to quantify the effects of gentrification in two traditionally black and low-income neighborhoods in New York. What he found was that “poor residents and those without a college education were actually less likely to move if they resided in gentrifying neighborhoods.”
What we have ignored, Freeman said, is that “the neighborhood changes associated with gentrification might be appreciated by the prior residents.” Yes, taxes might get worse as assessments rise, but no one wants to live in a neighborhood with neglected yards and boarded up houses. No one, black or white, rich or poor, wants to live with crime.
Sonny Mawyer is 77 now. Despite all that’s happened over the years, to his eyes, Belmont has largely stayed the same. “There’s been a few things added,” he said, but “very little torn out. What you see today is pretty much what was here back in the 40s. Even back in the 30s.”
Belmont is still home to the working class, some of them just perform a different class of work. What matters is that Belmont is once again a neighborhood made up of families, people proud of their homes and of their community, still possessing a surprisingly strong sense of identity.
In 2008 I went ahead and joined the party, buying a house in the somewhat more affordable, if less fashionable, Hogwaller area of Belmont. I joined the party way too late, of course, as the whole world’s economy went off the rails while the ink was drying. I won’t be selling my house for $400,000 anytime soon. Assessments in Belmont started dropping for the first time in 2010, and my house, like many peoples’, is valued at less than what I paid for it.
But I didn’t buy it to flip it. I bought it because I wanted to live close to Downtown. I wasn’t especially attached to Belmont, I have to admit. Truthfully, I’m not much of a neighborhood person, not a joiner when it comes to my community.
My favorite thing about Belmont is how easy it is to get lost exploring its labyrinth of roads, some still gravel, some that seem to go nowhere. It’s a large and mysterious place, with many hidden corners, as much defined by dirt and trees as by buildings and pavement. Sometimes, walking home past houses I’ve seen built and families I’ve watched grow, I will admit to myself that I like being a part of that process, and when the moon is huge, hanging right over the road, the summer air reeking of honeysuckle, and the fireflies lighting up on either side of the sidewalk, the place seems to welcome me home.
Tommy Williams has since moved out of Charlottesville, but his son still lives in Belmont. When he comes to town for a visit, Williams usually drives straight down Avon, but recently he took a detour around Belmont Park, remembering the lawn parties, the baseball games, how back in 1948 or ’49 it was where he saw his first movie flicker into life, and met the first girl he ever kissed. He was 16, met her at the park, and asked her for a date. Walked to her house on Sixth Street, then up Avon and across the old wooden bridge to Arthur’s Grill on Main Street for burgers, down to the Paramount to watch a movie, then all the way back to her house, where they sat on her front porch swing until he had to go home. It was the end of summer, almost time for school to start.
So many memories. Later that night, he logged onto Facebook and messaged a friend in Atlanta who grew up in a house right on the park.
“I passed your house,” he said. “And then I passed Mrs. Bessy’s house, and then the Maupins’, and Richard Shifflett’s …”
“I’m so jealous,” came her reply. “I just want to cry. I just want to be there.”