Loss adds to housing surplus: Area must absorb homes of Wachovia Securities staff bound for St. Louis

Aug 17, 2008 (Richmond Times-Dispatch - McClatchy-Tribune News Service via COMTEX) -- WB | Quote | Chart | News | PowerRating -- Aug. 17--When companies such as Wachovia Securities pack up and leave town, the move affects more than employees. It creates ripples in the economy, most notably the housing market.

About 630 people, mostly from the Richmond area, are transferring with Wachovia Securities to St. Louis.

It's unknown how many houses are on the market as a result of the move.

What's more, the houses didn't hit the market all at once, avoiding a flood of homes for sales on the market.

Even so, hundreds of extra houses have been put up for sale in an already slow real estate market, adding to inventory levels and pushing prices down. Most are houses that wouldn't have been sold if not for the corporate move.

"We're spoiled a little bit, because we haven't had many corporations move out," said Bill White, president of Joyner Fine Properties and former president of the Richmond Association of Realtors.

Wachovia Securities' move has put a dent in the market, he said. "It's a blip -- no question about that. But it's not a major wave."

These houses have come on the market since Wachovia's purchase of A.G. Edwards last fall and its ongoing move to that company's base in St. Louis.

About 330 employees have transferred, and 300 more are in the process of moving.

Wachovia Securities is guaranteeing house sales, offering buyouts to employees if they can't sell their houses. The perk was offered to a wide section of employees, not just executives.

Houses for sale by Wachovia employees range from the $200,000s to more than $1 million, agents said.

The company is aggressive about pricing and moving houses, sending relocation specialists to meet with homeowners and requiring price reductions periodically.

If a house doesn't sell within 120 days, the company will buy it back at a predetermined price and try to move it as fast as possible.

Some real estate agents claim corporate sales in neighborhoods such as Wyndham in western Henrico County and Hampton Park in Chesterfield County are pushing down values.

"It's nice to know you have that safety net," said Chris Minakais, a paralegal with Wachovia Securities who is moving to St. Louis this month. "I'm grateful I have a job. I am grateful Wachovia made the offer."

Her house, on West Franklin Street in Henrico, was listed for $299,500. It's now on the market for $289,500.

Offering buyouts is not unusual, even in a soft housing market, said David H. Downs, director of the Kornblau Institute of real estate at Virginia Commonwealth University.

Companies offer incentives to retain expertise, given the tight labor market, Downs said.

Moving benefits could include "financial assistance but not the buyout and all things in-between," said Jim Napier, president of Napier Realtors ERA.

Assistance could be, for example, moving expenses or closing costs, he said. "It all differs depending on the culture of the company."

While reassuring for people considering a major life change, buyouts can be pricey propositions, experts said.

One house in Wachovia's corporate inventory, at 6104 Warbler Way in Wyndham, was listed in mid-March for $725,000.

"I thought it was a competitive price when we put it on the market," said Will Hamnett, an agent with Prudential Slater James River who listed the property.

The buyout -- what the owner received -- was $674,500.

The corporate-owned house is on the market now for $595,000.

It's unknown how many houses Wachovia Securities has in corporate inventory that didn't sell in the first go-around. The company works through Hewitt Associates, a third-party company that is listed as the corporate owner on the Multiple Listing Service.

"There could be as many as 50," Hamnett said.

Linda Hunt, corporate relocation director for Wachovia Corp., said she did not know the exact number. "Very few are coming into inventory," she said. Most are selling in the 120-day time period.

The Richmond area has been hurt, like the rest of the country, by the real estate slowdown and home prices that swung a little too high, Hunt said.

"When we started on this venture, obviously we knew the market was changing and Richmond was impacted," she said.

Selling in a challenging market can be tricky, she said.

"The first 30 days are the most important. The longer a house is on the market, the less it's worth," Hunt said.

The company pays for stagers to work with homeowners so houses can be primed for showing.

"It's not about spending money," Hunt said. "It's about taking all of the refrigerator magnets down and making sure there are no cobwebs at the front door."

Throughout the process, Wachovia brings in appraisers and seeks broker price opinions on what a house is worth, the value of which can change quickly depending on how many houses are for sale in any given neighborhood.

"It's an unbiased eye to the market -- exactly what the market is telling us," said Adrienne Chappell with Napier Realtors ERA.

Chappell is the agent on four corporate-owned properties, primarily in the West End.

"You go by facts and figures, pure data on what a house would sell for," she said.

Prudential Slater, Joyner Fine Properties and Long & Foster are working with Wachovia Securities to sell employee-owned houses.

"Wachovia seems to have a done a very good job counseling homeowners and getting those properties sold," said Earl Jackson, president of Prudential Slater.

Napier Realtors ERA handles houses that aren't sold by employees and become corporate properties.

Suzanne Saunders, associate broker at Napier Realtors, said much of the corporate inventory is in the River Road corridor from Henrico to Goochland counties.

"As soon as a transferee vacates a property, we come in with a crew to neutralize the house and do everything possible to make the house win the beauty contest.

"It's a price war and a beauty contest."

Contact Carol Hazard at (804) 775-8023 or chazard@timesdispatch.com.

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