Tag Archives: 22901
Lumosity data scientist Daniel Sternberg explains the prominence of college towns this way:
College towns tend to do well because education is correlated with cognitive performance. We’ve seen in our other research that those with advanced degrees tend to perform better cognitively throughout the lifespan. When we looked at some trends based on American Community Survey data, we found that the percentage of individuals within a metro area with advanced degrees, and the percentage of individuals within a CBSA pursuing advanced degrees were both strong predictors of the cognitive performance score for that metro area.
Not bad. The ancillary effects of the University of Virginia are well known, but this is the first time I’ve seen the Charlottesville area as being noted for the under-35 demographic – I’ll take that as a very good thing for the future of our area, should it be a reasonably accurate conclusion.
I’ve been a real estate agent in Charlottesville since 2001 and I’ve never seen this volume of pocket listings. Is it due to the ubiquity of the internet, the sellers’ market (for some segments) or both?* As a consumer, how does this matter to you?
Pocket listing: pocket |ˈpäkət| listing |ˈlistiNG|
A listing for a property that is held by an agent in his or her pocket, marketed quietly (but not surreptitiously), usually within his sphere or brokerage.
A brief look at inventory levels and sales in the City of Charlottesville and County of Albemarle, year-over-year -
Some insight into what I’m seeing with respect to pocket listings in Charlottesville:
- I get at least one email every other day either marketing a pocket listing or seeking a specific home type for sale from an agent within my firm or from an agent from another brokerage
- I pitch a short-term pocket listing process to many of my seller clients when we deem it appropriate
- More and more, pocket listings – at least for a short period of time – make sense. In other words, they’re working.
Advantages to pocket listings that I tell my clients:
- Sellers can test the market – as in, if you put the house on the pocket market for $450,000 and initial feedback reveals that $425,000 is where the price should be, then we’re able to list the house in the MLS for $425k and the wider market doesn’t see that price reduction.
- Often, the seller doesn’t have to have the full “list of things that need to be done” completely finished – a room or two can be left unpainted or in-process – as the listing agent can vet and prep the agents showing the house during the pocket listing period.
- Don’t have to go through the full invasive experience of having your house shown. (selling a house usually sucks; it’s invasive, sellers need to keep the house spotless and it alters schedules remarkably). In other words, how does one quantify sanity and quality of life through the home sale process? I can see some sellers valuing not having to their home open to the public, as it were, at $10k, others $50k, some notsomuch. There is rarely a one-size-fits all answer.
- For the seller – this is an opportunity to test drive the selling process.
- For the buyer – they get access to a property that other buyers don’t.
- Seller doesn’t get full exposure to the market by not listing in the MLS. By not exposing the house to the entire market, the seller might realize a lower sales price.
- The MLS is a less accurate thing if the sales aren’t entered into the MLS – less accurate for searching for homes for sale as well as researching prices for comps and sold homes.
- This practice could be a means by which cooperative compensation’s usefulness is minimized.
- The risk for single agent dual agency may be greater. (only one party benefits in this situation – it’s not the client)
- Buyers – may pay a higher than market value as the market is so small and the demand is (artificially(?)) higher.
- More closed markets – some neighborhoods and price points seem to be more amenable to the pocket listing route – with seemingly few agents who have access to what’s going on in this sub-market.
So … what’s a consumer to do?
- Buyer or seller – Understand the inefficiency of the market.
- When interviewing your buyer’s agent (you do that, right?) – ask how tapped into the quiet market they are.
- If you’re a seller – have the conversation with your prospective representative about single agent dual agency, and discuss what happens if the agent procures a buyer. (my answer: I’d either have the buyer be unrepresented or have send them to another competent agent)
- If you’re a buyer – determine what it is that you’re looking for. “I’m looking for a four bedroom home in Crozet or Brownsville between $450k and $500k on less than an acre” is a better email to send to agents than “I need a house in Albemarle that my clients will like”
What do you think?
I think there’s a real, untapped market for modern homes in Charlottesville. Latitude 38′s homes tend to look great and sell very well, for example.
The very first RoehrSchmitt Architecture creation, the Wall House is a 2,000 square foot urban infill home that was a great collaboration between the owners, architect and builder. The budget was tight and the expectations high, but working closely together the team was able to achieve the owners’ objectives in a crisp, modern package for less than $150 per square foot. The design is efficient and easily adaptable to other sites and contexts. We see it as a prototype for an affordable modern house on a typical urban lot – a loft with a yard.
As my research has evolved, I’ve finally found a reason to use Pinterest. Really. I’m saving my favorites both in Pinterest and Evernote, but Pinterest just offers a simple, efficient, clean way to save and display these homes.
I’m thinking a modern home like this would be more desirable …
… than something like this (although I am sure that this type of home would sell here – to the right buyer)
YOUR market will vary.
Even though this is what we believe to be an extremely accurate market report, it’s still a broad-brush report.
Mill Creek will have different inventory levels and absorption rates than will Old Trail, or the Gleason condos. As will different price points. i.e. – low absorption rate at $1 million + , high absorption rate in the $300k – $400k price point.
Dig in, get educated, ask questions, either in the comments below or email or call me anytime.
This is an example of how saying “sales are up” or “sales are down” doesn’t tell the whole picture.
For all residential sales year to date in the Charlottesville MSA:
Very broad takeaways -
- Inventory levels across the MSA are up, sales are down.
- Quality inventory is anecdotally way down
- In some market segments, multiple offers are common place.
- New construction is going to be a huge market segment – for better or worse.
- Being prepared to act fast – whether as a buyer or seller – is crucial.
The full report is embedded below, or download it here.
Goodbye, Charlottesville Bubble Bloggers. Today marks their final post . Thanks for the insight, the forced introspection and for bringing some life to the Charlottesville real estate conversation. Please don’t let your blog become yet another abandoned internet place feeding dead links.*
Mid-2008 brought the advent of the Charlottesville Bubble Bloggers. Much consternation followed in the Charlottesville real estate agent community. They brought candor, some snark, brutal analysis and anonymity to the Charlottesville real estate conversation.
I, for one, welcomed them – engaged them thoughtfully and I’d like to think earned their respect (and they mine).
And then in 2011 they interviewed some of the Charlottesville real estate agents who had engaged them** on their blog (as an aside, that image remains one of my all-time favorites).
And so now, they are moving on … and have been so kind as to answer a few of my questions.
1 – Who are you? (don’t worry, we won’t tell anyone)
In the beginning “we” were several people who were interested in/shocked by prices/obsessed with real estate in Charlottesville and Albemarle. Though in ’08 and ’09 there was lot of blog snark (which was true across the Internets), we actually did and *do* love Charlottesville. It’s a fantastic place to live, and it’s too bad the secret is out. This makes the traffic truly awful; sometimes it seems very crowded; and RE prices are up, for good. (More on how that is true, and not true, in the final post on the C’ville Bubble Blog).
2009 and 2010 were awful years for the American Economy, home owners, savers, and millions of workers. Our belief system turned to Econogeddon and Prepper, and we became hand-wringers over the control Too Big to Jail Banks had and have over the US Government and political parties, property-owners, and potential buyers. We chronicled this in terms of the local and national.
It remains a fact that many people will never recover their standard of living and neither would have the rest of us w/out the kick-the-can-down-the-road heroics of money-printing Fed Chair Ben Bernanke and Treasury Sec Tim Geithner.
Along the way, through life-changes and the improving economy, “we” morphed into “I”…around the time the blog took to Twitter. Tweeting is a lot more efficient than blogging, though certainly not less time-consuming. 2011 was a busy year of blogging–but mostly because there was a lot going on.
There were signs that housing was entering a new phase by early 2012, with the National Fraudclosure Settlement, though it ultimately was to provide not much relief for home owners. There was a New Year’s resolution to wrap up the blog…which got derailed. But the last blogger standing did manage to generate 80% less content than previous years :0).
2a. Okayfine. Could you have written as you have had you not been anonymous?
Now that it’s 2013, an anonymous blogger or internet entity might need to be explained. The Internet now is Nice. But back when the blog started, mid-2008, ‘anonymity’ on the web was still a viable, if not preferable, option. Many people still had funny little names as email addresses, and blogged, or commented on blogs, with wacky monikers.
Locally, there was an extremely popular website / gossip extravaganza called The Cvillain, which was up-to-the second, in-the-know, controversial, snarky, anonymous. Nationally, there were a number of housing and econ blogs that were widely read and anonymous: Zero Hedge with lead blogger Tyler Durden; Dr. Housing Bubble; Calculated Risk, who was known as CR (but is now known as Bill McBride), who co-blogged with one of the best writers about mortgages and the bubble, called Tanta, whose identity was only revealed after she died in 2009. There was precedence.
Could we have written the same if we had not been anonymous? Probably not. People would have looked at our current or previous jobs or pursuits or financial status or owner status, rather than the data on the blog.
What’s equally interesting as our own (and my own) anonymity is the kind of people who rejected it or accepted it. There’s one particular TV station in town that wouldn’t have anything to do with the blog, at least publicly. But NBC29 and Daily Progress, The Hook, and C-VILLE reporters were savvy enough to use it as a resource and interact via Twitter.
Too, the blog had long-term private email and Twitter correspondence with a number of area RE agents, home buyers and sellers, finance guys, UVA profs. None of the correspondents spent too much time pondering the anonymous question.
2 – Do you think the bottom is here? The end of 2011, and the Q1 of 2012 was, anecdotally, the bottom of the bust. I believe the City of Charlottesville and Albemarle County have seen their price bottoms, especially in the “First Time Homebuyer” category of under $300k. It’s a question of very low inventory. Here’s a national chart on pricing which confirms pricing ideas.
But the most convincing bit of data for Q4 2011/ Q1 2012 being the bottom is that several of the blog’s long-term commenters / correspondents bought houses: “Serious Buyer,” “Craigger,” “Anonymous,” among them.
These folks tracked the local and nat’l markets closely for years and independently decided to finally buy, deciding if it wasn’t “the” bottom, it was close enough. And with mortgage interest rates solidly under 4%, they were all happy.
In short – there’s lots of new construction in Charlottesville and Albemarle.
It’s been said that 2013 is the year of the return of the spec house; we’re seeing more new construction than we’ve seen in years. Buyers have more options, sellers have more competition.
Four important and relevant stories before we get started:
- Why take a Buyer’s Agent to new construction?
- Buying new construction without a Realtor? Read this first! (note: this builder is now no longer doing business in Charlottesville, but we have two national (and maybe a third on its way) builders now and many builders use their own contracts – caveat emptor – or: hire competent buyer representation!)
- Charlottesville – A Healthy Housing Market (for New Construction) – With some Context
The evolution of the new construction market in Charlottesville* has been one where there were once dozens of homebuilders and now there are a handful. And that handful are building. A lot.
The ramifications of all of this construction are many. A few to start:
- Increased competition for existing homes
- Denuding of the landscape
- More choice for homebuyers
- The opportunity for homebuilders to differentiate themselves is more challenging than ever … if everyone offers granite and everyone offers hardiplank and everyone offers an open floor plan …
- Those seeking to purchase homes now with resale in mind (that should be all of you) need to keep at least two things in mind:
1) The siting of the house matters (location, location, location)
2) You’re likely to be competing against new construction for quite some time.
- Some of the neighborhoods on the map have 5-10 homes to be built (Evangeline for example), some have 10-50 (Dunlora Forest) and some have 100+ (Old Trail)
View New construction in Charlottesville in a larger map
Real estate is local – and I’m thinking that our area may be leading the charge in a return to new construction.
Mike Simonsen from Altos Research writes (read the whole post – he describes a lot of important topics and segments of the real estate recovery):
Since 2007, new housing starts have been anemic. The long-term average construction rates are about 1.5MM homes per year. In the last six years, we’ve averaged well under 1MM. And since 2009, the average is closer to 500,000. Meanwhile population and household formation keeps on trucking. The over-construction that happened in the bubble is a distant memory. See the chart to the right. Construction volume under the orange line are “undersupplied” conditions. The homebuilders imploded so profoundly after the bubble, that we haven’t had this few new homes being built since 1959.
I’m often told that the information provided here is educational. Part of my own education is knowing the right people to whom I both direct my questions and clients. As such, I’ll have a few posts in the next couple weeks from lenders whom I trust. First up is Matt Hodges discussing how FHA loans (which require at least 3.5% down payments and comprised about 10% *of the closed transactions in our market** in the past 14 months are becoming far less attractive. Next week’s post should be an interesting one, too.
FHA does not want to be your first choice, period.
Since December, HUD has been anticipating changes to the FHA loan program. On January 31, HUD released a mortgagee letter which changes the program. To read the entire mortgagee letter, click here.
The first change goes into effect on April 1st – no fooling! Here’s what changes:
For loans less than $625,500 (which is everything in our market that uses FHA, as the high limit is $437,000 in the Charlottesville MSA), annual MIP increases 10 basis points (bps). This means that the $200,000 loan now costs $16/month more.
The June 3rd changes:
1. If one puts down 10% on a purchase, mortgage insurance premiums will last at least 11 years, which is up from the current 5 years.
2. If one puts down less than 10%, mortgage insurance premiums are PERMANENT, regardless of future loan to value.
3. 15 year loans with 78% initial loan to value no longer has annual mortgage insurance waived initially – you must pay for 11 years.
The threat of lowered interested party (seller, Realtors, etc) concessions from 6% to 3% of the sales price, has not materialized yet. Our belief is that could prevent the lower priced homes from being able to use the FHA program, which might be discriminatory. It is still being considered, and it might have a ceiling and then tiered percentages below that.
Keep in mind, these changes are for pulling a case number, NOT closing. So, as long as we get the loan application done by March 29th for the first change and May 31st for the second set of changes we will still be using the current standards.
4. MIP = Mortgage Insurance Premium
5. Basis points = percent of the loan amount that you pay the insurance on. For example, 10 basis points on the annual MIP = .1% of the loan or $200,000 x .1% = $200 / 12 months = $16.67 per month.
Basically, talk to a great lender early in the process.
I stopped by Beer Run this afternoon (those not in Charlottesville – it’s more than beer!) to pick up a gift and noticed that the City Walk apartments are well underway. That’s a lot of dirt.
More about City Walk at Charlottesville Tomorrow (including the site plan).