Date Archives August 2012

Charlottesville Bubble Bloggers’ Take on the Current State of the Market

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It’s not often that I say something is a “must read”, but the Charlottesville Bubble Bloggers’ “Carpe Diem” Trumps “Caveat Emptor” As “Bottom” and “Recovery” Chatter Increase in the Charlottesville Real Estate Market Mid 2012 is such a post.

Broadly-sourced, logically articulated, they debunk a lot of the myths and stories underlying the Charlottesville real estate market – from shadow inventory to Charlottesville’s “protected” nature, to reduced inventories, home prices and more. I highly recommend reading it.

Their closing echoes much of what I have been saying here and in conversations with clients for months:

But for those who have been waiting to buy and waiting to sell, there’s more clarity than ever. The 30 year fixed rate mortgage is currently at 3.6% (Aug. 15). Buyers who have waited for years and are well-cushioned financially aren’t looking at a house as an investment but as a home. For those with stable jobs and a 7-10 year event horizon plus a capacity to absorb price wobbles, buying looks attractive. And there are many equity sellers getting off the fence, realizing that they’ll never get that dream of the missed bubble price: but acknowledging that moving on or moving up and getting things settled has a value greater than money.

If you’re going to buy a home in Charlottesville, understand that now is normal, or as an agent said to me several years ago: “It doesn’t matter whether the real estate market is ‘good’ or ‘bad’ – it is.

And so it is.

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Big Data and Civil Rights and Questions about Data’s Intended Uses

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Big data is all the rage right now and it is going to affect virtually everything we do on and off-line.

big data

It is illegal for me to as a Realtor to tell my clients (or anybody) that all the “x race live here;” but would it be illegal for one of the new “lifestyle real estate” search engines to make the same recommendation?

Think about it.

You decide what data is about the moment you define its schema.

With the new, data-is-abundant model, we collect first and ask questions later. The schema comes after the collection. Indeed, big data success stories like Splunk, Palantir, and others are prized because of their ability to make sense of content well after it’s been collected — sometimes called a schema-less query. This means we collect information long before we decide what it’s for.

And this is a dangerous thing.

When bank managers tried to restrict loans to residents of certain areas (known as redlining) Congress stepped in to stop it (with the Fair Housing Act of 1968). They were able to legislate against discrimination, making it illegal to change loan policy based on someone’s race.

“Personalization” is another word for discrimination. We’re not discriminating if we tailor things to you based on what we know about you — right? That’s just better service.

O’Reilly Radar

If one wanted to, one could mashup (I assume, I’m no coder, but I assume anything can be done) the census block data with a real estate search engine and allow consumers to really target where they wanted to live … and next to what kind of person.

One of the most common search queries bringing people to RealCentralVA is “best neighborhoods in Charlottesville” … what does “best neighborhood in Charlottesville” mean to you? Data might probably will be able to answer this … but humans are prohibited from doing so.

Which brings us to this:

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How Much Research do Buyers do On Adjacent Properties?

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As I was pursuing the new listings in the Charlottesville MLS this morning and remarked on Twitter:

I see homes coming on the market and I wonder if buyers will know about adjacent developments coming that will affect them.

Three quick examples to make this point:

1: The Redfields neighborhood on the south east part of Charlottesville.

Redfields may be growing. Or not. But a Wegmans and Costco are coming nearby.

2: Montgomery Ridge in the northern part of Charlottesville.

Monticello United has just gained approval from Albemarle County to build a few soccer fields along Polo Grounds Road; this is great news for soccer players and families and perhaps not great news for those already suffer through long waits at the 29/Polo Ground stoplight.

3. Rio Heights, along the Rio Road

Lochlyn Hill on Rio Road, which looks like a cool neighborhood, is going to change the dynamics for the adjacent neighborhoods.

Three easy examples of forthcoming changes that buyers of homes in those areas need to be aware of … whose responsibility is it to inform the buyers so they can make educated, informed decisions about how they will want to live in five to ten years? Or what their neighborhood might look like to the next buyer?

Ultimately, a buyer needs to do his own due diligence; when working with my buyer clients, I tell them that I try my very best to know what’s happening and what might happen, but realistically, if they don’t own the land around them, it’s going to change.

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The First Seven Months of 2012 – Charlottesville Real Estate Market Update

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The Questions:

– Can I sell my house in Charlottesville (area) right now?

– Should I buy a house in Charlottesville (area) right now?

Answer to both: It depends.

Buyers: If you need to live somewhere and know you’re going to be somewhere for at least 5-7 years, now might be a great time to buy … ** interest rates remain extremely low. But … there is a dearth of quality inventory on the market right now. I’m finding that buyers are searching for (much) longer timeframes, so that when the right house does come on the market, they are prepared. Start early; do your research and be prepared to move quickly when the right house comes on the market.

Sellers: If you need/want to sell, understand that buyers are still looking for quality and value … and that selling a home is work. (It’s hard work; I task my seller clients with loads of prep work) , but know this: unless your home is one that is priced and conditioned to sell in two weeks, be prepared to be patient. And to defend your price with data and facts, not emotions and expectations — neither buyers nor appraisers care about what you need/want to make or how much the house is worth to you.

Year over year:

(Inventory level = # of homes on the market)

Charlottesville – Inventory level is down nearly 20%, median price is up slightly to $255k – up about 7% (but still way below 2010)

Albemarle – Inventory level is down a bit, median price is up about 5%

Fluvanna – Inventory is down about 8%, as is the median price.

Greene – Inventory is down a little and the median price is up significantly – about 30% … keep in mind that this increase was based on 11 closed sales this July versus 19 the previous July.

Louisa – Inventory down about 23% while the median price down nearly 20%

Nelson – Always an inconsistent market due to the variety of product mix there … Inventory is down about 12% while median price is down 24%.

The takeaways from this month’s look at “what’s happening in the Charlottesville real estate market”:

1 – In some segments of the Charlottesville – Albemarle MSA (Metropolitan Statistical Area), the buyers’ market looks like it’s over. Good houses that are priced well are moving … sometimes in a matter of days and occasionally with multiple offers. Inventory is down, some prices are up. (Low Inventory isn’t necessarily a sign of recovery though)

2 – Foreclosures and short sales are still out there, and are seemingly comprising a smaller portion of the market than we’ve seen over the past few years. But there are anecdotes everywhere – I almost showed a short sale in Albemarle in which the asking price is $450k … down from the initial asking price was $1.19 million … in 2008.

3 – I don’t feel like a complete fool saying that the recovery is near. I don’t know when “near” is, but I do know that “normal” is a moving and shifting target. “New normal” is an absurd term; today is normal. So is tomorrow. So is yesterday.

4 – Product mix shift – anecdotally, we’ve seen this coming, but we’re seeing more and more buyers are opting for single family detached homes as opposed to attached homes. Condo volume seems to be stabilizing … the condo buyer of today is more interested in the condo lifestyle (location, no maintenance or yard work) than we saw in the previous market*. What we’re also seeing is a demand for the condo lifestyle in single family homes; that solution doesn’t really exist yet, but there’s a market for it!

5 – Real estate market Data is but part of the conversation and analysis – experience and conversations with other experienced real estate agents matters tremendously. It might sound silly to in-lookers, but being able to tell that a property is great and will sell soon is crucial. Example: I showed a house on Saturday and told my buyer clients that I expected it to sell in the “next couple days” … then I heard Monday that the sellers got three offers. That insight comes from experience, not just looking at data. … and educating my buyers so that they are able to discern a well-priced, well-marketed home is one of my favorite things.

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The Challenges of Growth and Rural Areas – In Glenmore

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Residents of the Glenmore neighborhood aren’t fond of the sounds from the shooting range nearby. Looking in the Charlottesville MLS, the oldest home I can find in the Glenmore neighborhood was built in 1993; the shooting range has been there for 40 or 50 years … what’s the solution? If Glenmore wants to pay for sound dampening, I can imagine the range would entertain that offer.

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Stonefield’s Altering of the 29 Landscape

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29 is changing … faster than you think. It seems that just a few months ago they were merely moving dirt. Now they’re probably scheduling cleaning crews in anticipation of the opening of Trader Joe’s.

Remember the 7-11 on 29? The Blockbuster?

Stonefield is certainly changing the landscape of one of the busiest intersections/stretches of 29. If you don’t live in Charlottesville and are curious what all the hubbub is about (Trader Joe’s is coming in November, Blue Ridge Mountain Sports is moving from Barracks Road, an IMAX theater, a Café Caturra, and presumably lots of other chains.

As as aside, the grocery store wars are upon us, with Trader Joe’s poised to open, Wegmans coming to 5th Street Extended and Fresh Market on 29 North (where the Circuit City used to be)

As a further aside, 29 is going to be a disaster.

Update 7 August 2012: The homogenization of Charlottesville continues … #NotThatTheresAnythingWrongWithThat …

The Shops at Stonefield is a highly curated mix of retailers and restaurants chosen specifically to reflect local interests as well as bring a unique experience to the community. As part of the development, EDENS will welcome new, premier retailers to the Charlottesville area including Williams-Sonoma, Pottery Barn, Langford Market and Trader Joe’s. EDENS is also working with local favorite Blue Ridge Mountain Sports on a new flagship store. Additionally, The Shops at Stonefield will have quality restaurants like Travinia Italian Kitchen and Burtons Grill, allowing visitors to enjoy dinner and a movie at the new Regal Cinema. Regal features the area’s first IMAX experience and 14 auditoriums with stadium seating.

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