Buying and Selling Real Estate in Central Virginia

That’s the title of Sunday’s “The Wake-up Call with Rick Moore” on WNRN.

One of the beauties of writing a real estate blog (or any blog, for that matter) is the ability to react, expand on conversations and provide context – in this case, yesterday’s show on WNRN, Buying and Selling Real Estate in Central Virginia (no longer available). This time we had better calls and questions from the audience, and a pretty good conversation. Time certainly flies in radio, and the host did a great job of managing the conversation.

From CvillePodcast:

This week on the Sunday Morning Wake-Up Call with Rick Moore, two guests from the real estate industry talk about tips and myths of the business, and deal with the recent accusations by the NAACP that Charlottesville has a racial bias in lending rates. Do the quick turnover “Fix This House” schemes really work? And why has Charlottesville been accused of racial bias? Is the Central Virginia market collapsing? Find out the answers to all these questions by listening to the podcast!

A few thoughts on the show

1) The last caller, Rich, nailed me. No two ways about it … But … my reluctance to call our market a “declining market” in light of the great rise in inventory and longer days on market is simple, yet complex. First, the simple part of the answer – I am mindful of the self-fulfilling prophesy that can come about by not reading beyond headlines. Second, there are many different factors contributing to our shifting market – not least the huge amount of new construction and condo-conversion inventory that do skew the data. About 18% of all residential properties on the market in our MSA are flagged as new construction. In Charlottesville/Albemarle – that number rises to 20%. In Charlottesville/Albemarle, 12% of the active residential inventory are non-new construction condos. The answer to whether we are in a declining market is longer than “yes” or “no.” It may be a case of semantics to some, but I think that the shifting perspectives is an important factor. We need to look outside of the past five year window to gain perspective.

2) I firmly believe that we track the real estate market too closely. Real estate should be a long-term investment – at least three to five years. Tracking mortgage applications on a weekly basis (no longer available), housing numbers on a monthly basis, is a bit too much analysis. If you think that today’s interest rates are high – get some perspective.

3) Much more careful analysis is required in today’s market – smart purchases can absolutely be found, but finding those takes more analysis, negotiation and experience.

4) On the subprime market and the NAACP’s suit, note this one disclaimer from the NCRC’s study (PDF) (no longer available):

The disparities discussed in this report reflect a number of factors including income, wealth, credit rating, and many others. Discrimination, of course, remains a significant factor. Several studies discussed below have found that even controlling on credit-related factors, disparities persist. The disparities in this report do not necessarily reveal levels of discrimination in the marketplace; but they do reveal the presence of ongoing barriers associated with socioeconomic factors.

There are problems (as noted when the story first broke), but to attribute them entirely to race is irresponsible.

Doing radio is fun, having the opportunity to followup is crucial.

Some of the issues we touched on

Excellent story on the NCRC’s/NAACP’s lawsuit
Piedmont Housing Alliance
Compass Home Loans/Matt Hodges (archived: 2016)
How to protect your home equity in a falling market (archived: 2011)
Market Statistics section of this blog
Limits on Fannie/Freddie could be lifted next year
I’m actually a Realtor with Century 21 Manley Associates (archived: 2018), not “Jim Duncan realty” 🙂 2018 update: I’ve been with Nest since 2007. 🙂

This article is directed primarily at the anonymous caller:

One source of difficulty arises from a basic fact of real estate economics: about half of home purchases are by people moving within a metropolitan area. If sellers can’t sell their houses because they want too much for them, they also can’t become buyers of new homes.

“The buyers and the sellers are the same people in this market,” Professor Mayer said. “So if the sellers price so high that they, effectively, put themselves out of the market, it shows up on the buying side, too.”

Thanks to Rick and WNRN for the opportunity and CvillePodcast for posting the podcast.