Proof that Gas Prices are affecting buyers in Charlottesville area
Getting feedback from Buyer’s Agents is one of the most persistent challenges a listing agent faces, yet good feedback is absolutely crucial to understanding buyers’ mindsets to help best advise sellers. Note this feedback received yesterday on one of my listings:
Shows much better than all the competition. My clients liked it the best of any they saw (here - about 15 minutes/10 miles to the City). They bought in (town) however. He will be at the JAG school and easy commute and gas prices made them choose in close.
The trouble is, when showing forty plus houses a week, it’s that more challenging to elicit feedback from Buyers Agents …
As a recap, If You Don’t Think Gas Price Are Affecting Buyers … You’re not paying attention.
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Are Green Homes the new “Trophy” Homes?
That’s the question posed by the New York Times a little while ago.
There may be some truth to that presumption (and is that necessarily a “bad thing”?) Peer pressure works. There is truth to the trend and perception that more homebuyers are asking questions about the green bona fides of homes in today’s market. Taking the politics of the debate out of the equation, let’s focus on the diffusion of this new-fangled “green” technology -
- Will Ferrell was driving a concept BMW last year; Honda is nearing the release of a production hydrogen car. Take a look at the search volume for the Prius.
- Three years ago, I would have been hard-pressed to find a LEED or Earthcraft home in the MLS; now there are at least fifty.
- Consumer Reports now has a Green Home Improvement Guide.
I’d argue that when looking at the five classes of technology adopters - Innovators, Early Adopters, Early Majority, Late Majority and Laggards, we’re probably in or on the cusp of the Early Majority phase. Is it because celebrities have “trophy homes”? Doubtful. There is a significant benefit to “going green” that goes beyond political capital or chest-thumping.
It’s the market, stupid. Innovation is spurred by necessity.
Water is increasing by about 5%, the cost of electricity in the Charlottesville area is going to increase by at least 18%, fuel prices are at record levels (duh), and those buying houses today tend to be planning to stay for at least five to seven years (ancedotally). More buyers are asking to go green.
The Blue Ridge Eco Shop didn’t exist a couple of years ago, neither did Cville Enviro or the Better World Betty site. These places came to existence because the market demanded their services.
The market is moving beyond individual green products and into the realm of green developments - because the market is demanding LEED-certified Neighborhood Developments (although I’d argue that LEED-ND has not yet reached mainstream vernacular)
Courtesy of the National Association of Realtors’ On Common Ground magazine* -
Experts interviewed for this article were unanimous on one point: collecting green-certified houses into a conventional subdivision on a former farm fi eld at the edge of the metro area would not a green neighborhood make. Beyond that, there was little unanimity.
Some argue that the criteria for a green neighborhood are fairly well satisfi ed by building according to the principles of smart growth. That means conserving land, focusing development first in areas that are already developed, providing transportation options other than cars, and creating mixed-use development that makes neighborhoods compact and walkable. Others say that smart growth, as it is typically discussed, does not quite touch all the bases of sustainability.
Others suggest that building green neighborhoods means following the old environmental mantra: Reduce. Reuse. Recycle. Reduce the land consumed, the miles traveled by car and the consumption of energy. Reuse the buildings and infrastructure of existing neighborhoods, use waste as a source of energy, and reuse “gray” water to maintain landscaping. Recycle building materials, and even the land itself—the post-industrial brownfi elds and fallow parking-lot “grayfi elds” around defunct shopping centers.
For proof that “Smart” Growth is mainstream, check out this partnership that defies presumptions about Realtors always wanting to build, build, build at all costs -
Those are some of the results of the 2007 Growth and Transportation survey sponsored by the NATIONAL ASSOCIATION OF REALTORS® and Smart Growth America.
My prediction - in five years (or sooner) Earthcraft will be the de facto standard for building quality. That, and the Charlottesville/Central Virginia region needs to work on building transit infrastructure now.
Interesting related article - The Green Housing Boom, courtesy of Fast Company
* I requested a few extra copies of this publication because I thought it was such a great issue. If you’re in Charlottesville and would like a copy, please let me know. Otherwise you can download the entire issue here.
Search for homes in Belvedere.
Are homebuyers and sellers the only ones who need transportation?
It would appear that Gov. Kaine thinks so. (thanks to Richmond Sunlight for pointing out this article)
Kaine is proposing a statewide 25-cent increase in the grantors tax, which is now 10 cents per $100 of assessed value, that owners pay on the sale of a house.
First, the grantor’s tax is paid based on the sales price of the house, not the assessed value.
Nuts and bolts - currently the median price in the Charlottesville area is about $275,000. Thus, the grantor’s tax paid by the seller on that particular transaction would be about $275 - and that’s a lot of money! If the tax is increased to 25 cents $687.50. Note also that this tax is paid only when a property sells (which is happening less and less frequently).
Make no mistake - Virginia’s (and the localities’) transportation systems need help; they need maintenance and they need new infrastructure - roads, bike paths, rail lines - but taxing only one segment of the population that uses the system is wrong. It is difficult to get hard, accurate data on what percentage of people in this area own their homes, but let’s assume it’s anywhere from sixty to seventy percent. Thirty to forty percent of people in the area won’t pay this tax, yet they will still use our roads, buses, etc. This is not a question of fair, but one of whether this is a reasonable proposal.
One reason that the grantor’s tax is proposed is because it is a bit of a hidden tax - it’s just another one of those fees that gets thrown together on the HUD-1 at closing. In the hot market, no one questioned the tax; now every nickel counts.
Why not a broad-based tax that everyone would pay (gas tax), other than lack of political and intestinal will and fortitude?
To target one segment of the population for a tax that needs to be focused on the entire population, regardless of the state of the housing market, is not right.
The best prediction from the Washington Post article goes to lobbyist Charlie Davis -
“At the end of the day, maybe putting a ‘lockbox’ on transportation funds, maybe a local taxing authority, but that is it. Give Kaine credit for pushing for something. The Republicans can be tagged as obstructionists but . . . Kaine came back with almost the identical plan that was shot down last year, so which is more foolhardy? But the session will provide ample opportunity for a lot of social interaction to discuss the presidential campaign and enjoy some wonderful cuisine at the Capitol snack bar.”
And he’s probably right.
Related posts -
Too funny not to post - Copy of the Republican Transportation Plan
Update 06/24/2008: C-Ville has a good article about the state of the transportation debate, including this:
In the event that Kaine’s latest bill goes through unscathed (which is about as likely as UVA winning this year’s NCAA football championship), we the people of Virginia would have the pleasure of paying: 1 percent more when we buy a car; $10 more for annually registering our cars; and, when we sell our homes, a 250 percent higher “grantor’s tax,” which would go from 10 to 35 cents per $100 of assessed value. Most of the $1 billion generated annually would go to highway maintenance, but the revenue from the grantor’s tax increase—about $150 million annually—would go toward mass transit.
Where Will the Urban Cores Be? And why this Matters NOW
Get out your best Magic 8 Ball -
He also observed the largest wave of Generation Y home purchasing begins in 2012, after experts think the housing market will have turned around. Although what qualifies as an “urban core area” may vary widely to different people, it seems a safe bet to expect considerable variety in tastes in the housing market.
Hmmm … I seem to recall writing a related post a short while ago …
Also related -
How Many Towncenters do we need in CharlAlbemarle?
WalkScore and Zillow sitting in a tree
Proximity to rail increases property values?
Could this be part of the future of transportation?
If you don’t think gas prices are affecting buyers
You’re just not paying attention.
Also -
A lifestyle shift - riding a bike
I rode from my office to a listing I am marketing the other day - all told it took me about forty five minutes, round trip - and added about 15 minutes to my traveling time. Was it worth it? Absolutely. I saved gas, burned a few calories and hopefully led by example a little bit. Biking around Charlottesville has provided a very different perspective to the one I had before - different sights and smells - I noticed the relatively large number of backyard gardens in Belmont for one.
While biking certainly isn’t feasible for all of my trips - showing property for example - my new bike rig (above below) does allow me to cut down on a few miles almost every day - and that’s not too bad.
Seth Godin’s post, Times a Million, was a seminal post for me, and I have referred to it often since he wrote it.
Notice the lack of “times a million” math.
If we figure that the average driver in the US does 20,000 miles a year, I’m going to use about 400 gallons of gas. A car getting 20 mpg is going to use closer to a thousand gallons. Figure that there are about 100 million actively driven cars in the US, which means that the net difference if “everybody did it” has the potential to save 60 billion gallons (600 times 100 million) of gas. A year.
No, this isn’t a pitch to switch. It’s a pitch to describe how amazingly difficult it is to market that story.
The guy above who’s not going to switch from his Explorer to an Edge because it will only save him $300 a year is clearly not going to be interested (never mind moved) in the thought experiment above. It’s too distant. Too far away.
A lot has changed in the year since he wrote that post - gas has increased a bit - and buyers and sellers have become more cognizant and aware of what things cost.
Think about it - what if we all went car-free one day a week, or rode a bike to the coffee shop or did something without driving - even once a week?
Neil at the Free Enterprise Forum asks - $4.00+ Gasoline - High Enough to Make You Move?
I think that for some and perhaps many, the answer increasingly is going to be - absolutely.
There are plenty of discussions ongoing right now - one of which is whether a streetcar could be part of the solution. On this, Dave Norris is on point -
Mayor Dave Norris and Councilor Julian Taliaferro both said they want to hold off on the study and wrap it into the larger examination of how to remake transit in the area. The city and county are hoping to get the General Assembly’s permission next year to form a regional transit authority.
“I’m intrigued by the idea but I think it is a very expensive proposition,” Norris said. “So we have to make sure it is financially feasible and see how it will fit into the broader transportation network.” (bolding mine)
We need regional solutions - and as people look to bike and walk places - Realtors, planners, politicians and the rest need to recognize this.
Update 06-18-2008: Joe at Sellsius points to this site - Ride the City - which shows the best routes to get around NYC. Come to Charlottesville, guys! Either way, I subscribed to their blog.
Walk Score and Zillow sitting in a tree
And the results are fantastic.
The data is a hair out-dated, but you can still get a very good feel for the walkability of a location.
A sincere thank you to Zillow for making their neighborhood boundaries open source, and to Walk Score for their site … might “Bike Score” be in the works?
Note also this story from today’s Daily Progress about making fourteen areas of Albemarle County more pedestrian friendly. The last paragraph of the story expresses exactly what I have been saying all along - for most people, “going green” is a secondary byproduct of saving money.
“With the gas prices going up, it would be nice to take a walk to where we need to go,” Totschek said. “We could help save the Earth while we’re at it.”
Update 06-14-2008: Hopefully there will be good discussion at cvillenews about the drive to make CharlAlbemarle more pedestrian-friendly.
Transportation Town Hall on Monday
If you would like more bike lanes or rail service or other transportation concerns, take the time to tell some of the people whose voices matter (not that ours don’t - they just have bigger and better targeted microphones).
Town meeting on transportation with Delegate David Toscano and Senator Creigh Deeds
Monday, June 16 at 7 PM
Albemarle County Office Building - Room A.
Update 06-19-2008: Charlottesville Tomorrow has a podcast and a very detailed (as usual) report.
Subscribe!
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