December 2024 Monthly Note - Recapping 2024 Charlottesville market, HOAs, Negotiating, Finding Value, & Freedom

This month: quick market roundup, value, negotiations with clients and/or children, finding market equilibrium, Reddit AMA, and true transportation freedom.

To those of you who read most of my notes, thank you. To those who read and share, thank you too. I truly appreciate the reading, the sharing, the feedback, and the clients who read me well before contacting, and well after we work together.

In a word, thank you.

2024 Recap of the Charlottesville real estate market

Holy cow, that median price increase. I asked two friends to check those numbers to make sure I didn’t make a mistake. $369K to $499K is bonkers.
This year started fast and slowed as rates ticked up.
Buyers’ anchors with respect to interest rates are starting to shift — their anchors are more in the 6% – 7% range rather than 4% to 5%. The lock-in effect may be starting to ease.
I’m seeing more inventory coming to market, and conversations with other agents makes me think that Spring could be a busy one.
I’m going to do a longer piece on the market for RealCentralVA, breaking down % of attached vs detached homes, price comparisons. Good market data needs context, and I don’t have the room here. 🙂

Predictions

I don’t know. I have said and written that sentence countless times in my life and career. 2025 is the year for which we are unprepared and no one knows what will happen.

At the end of the day, I want to believe that the real estate market in Charlottesville will be fine. People need shelter. I suspect the next months and years may be hard. Tariffs, chaos, and uncertainty make for a challenging environment. I’d like to think we’ve got this.

That preface aside, predictions:

The resale market prices and volume will be helped by the increasing prices of the new construction market.
People will continue to want to move to the Charlottesville area, whether for jobs, semi- or full-retirement (read: grandkids), or as a destination for work from home. See: Migration trends.
The government/intelligence and UVA sectors should be fine (“should” carries a lot of weight here).
The first-time homebuyer market will be hard.
Volume: about the same as this year.
Prices: between 3% and 5% increase.
Interest rates: between 7% and 8%.
We will have more sellers next year than we have had this year.

Hopes:

More density in the City of Charlottesville.More transportation, land use, housing planning, and collaboration by UVA, Charlottesville City, and Albemarle County.
Fewer, and more competent Realtors; this career is hard. and fulfilling. See: Walk a mile in my real estate agent shoes, from 2013.
Interest rates: between 5.75% and 6.5%.
More people communicate with their local representatives about issues, rather than waiting until the last minute to learn about things affecting their backyards.
For people to be nicer to each other, recognize that we are in this together, and that harming others does not mean success.
Share

On HOAs

One of the questions in my buyer survey is “Do you care if there is a HOA?” A lot of people don’t like the idea of HOAs, and I get it. But:

You are going to be hard-pressed to buy a house in Charlottesville or Albemarle without a HOA that has been built in a neighborhood in the past 25-30 years.
They’re really not that bad.

A client recently said, “I think people hate HOAs for the wrong reasons. People seem to think the HOA will restrict their freedoms, when in fact they are largely toothless and the real problem is to get them to do what you’re paying them to do in the first place.”

When I was on the board of my HOA, we had a neighbor who stopped paying HOA dues, and let his house fall into disrepair; harming its livability and property values in the neighborhood. It took a few years, but we were able to put a lien on the property and send contractors to fix the house. Years.

HOAs can do good things.

Do your research and due diligence, as there are some HOAs that are absurdly stringent.

Negotiation 201

Some negotiations are akin to negotiating with four-year-olds: Wants and feelings are powerful motivators and can get in the way of the objective, which that a buyer wants to buy a house and a seller wants to sell. Focusing on “winning” or “beating” the other side can end up in a loss for both parties.

Kids are great negotiators and not to be underestimated. I was negotiating with my younger one when she was 3 or 4. The currency was M&Ms. We haggled back and forth for a while. I don’t even remember what we were negotiating about. I vividly remember that when we concluded the negotiations and the deal was done, she said, “That’s not a very good deal Daddy.”

Many good negotiations end with both sides a little bit unhappy.

Not knowing value or price without competition

Q: How much is this house worth?

A: It depends.

It’s relatively easy to figure out the price — but not necessarily the value — in a competitive situation. When you have two or more competing offers, we can get to the “best price” efficiently. What about when a house has been on the market for two weeks or two months? When a home sits quietly, waiting, its true value becomes a more complex conversation that requires looking beyond the comps to understand the genuine worth. “What is it worth to me?” becomes more relevant.

The house I’m thinking of? Still on the market.

A reminder of something I wrote in February 2022:

Price Matters

Or, the two weekends of disappointment theory.

If you’re not under contract after the first two weekends, you might be overpriced. In other words, if you’re not under contract after the first two weekends, a price reduction might be in order, because today’s buyers are watching the market in their specific market segment like proverbial hawks. They know the market.

Additionally, as many of you have read and perhaps experienced, the market will not find equilibrium until offers of compensation/concessions from sellers, whether explicit or not, are out of the conversation. More on this in January.

Bikes Give the Freedom that Cars Promised

A recent story from a client:

Her kid (9) just recently discovered bicycles. He now wants to ride everywhere and she’s giving him the freedom to do so. To the library, to ice cream, to playgrounds, to friends’ houses.

I’m teaching my grandson that we don’t have to get in a car to do a three-mile round trip to the grocery store to get bananas and milk. If you look closely at the photo above, you can see him and his little feet and helmet sitting on his saddle in front of me.

Our communities have lost so very much by focusing on moving cars and ginormous trucks over moving people and connecting them to their communities.

I have stopped to talk to neighbors and clients countless times when I’m walking or riding a bicycle, but I rarely do so when driving my car.