Date Archives June 2012

Primer for 1st Half 2012 Real Estate Market Update

30-year fixed-rate mortgage - Wolfram|Alpha

I’m going to be running numbers next week – give some time for realtors to enter the closings in the Charlottesville MLS and for the delayed (there are so many*) closings to finally close.

This is just a primer for what is likely to be a long and comprehensive post next week.

Contracts written 5/1/11 – 6/28/11:

Single Family Homes in Charlottesville and Albemarle : 213

Attached homes in Charlottesville and Albemarle: 70

Condos in Charlottesville and Albemarle: 51

Contracts written 5/1/12 – 6/28/12:

Single Family Homes in Charlottesville and Albemarle : 255 (up 16%)

Attached homes in Charlottesville and Albemarle: 70

Condos in Charlottesville and Albemarle: 32 (down 37%)

Looking at the above data, a quick conclusion could be reached that more buyers are shifting towards purchasing single family homes as home prices have dropped. Next week, I’ll separate the City from the County, product mixes, and the rest of the Charlottesville MSA.


These numbers are likely representative, but not an entirely accurate picture of the Charlottesville real estate market because most closings tend to happen at the end of the month … come back next week.

Closed sales 5/1/11 – 6/28/11:

Single Family Homes in Charlottesville and Albemarle : 230

Attached homes in Charlottesville and Albemarle: 74

Condos in Charlottesville and Albemarle: 41

Closed sales 5/1/12 – 6/28/12:

Single Family Homes in Charlottesville and Albemarle : 229

Attached homes in Charlottesville and Albemarle: 60

Condos in Charlottesville and Albemarle: 36


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Dense Neighborhoods Are Good for Single Family House Values

Yet another study demonstrates that dense neighborhoods – close to neighbors and close to stuff (coffee, parks, grocery, library, schools – you know, stuff) is valuable.

They learned that pedestrian aids, such as sidewalks and shorter street blocks, as well as a mix of retail, commercial and residential properties significantly contributed to increases in multifamily rental property values.

The researchers found that not only did the value of single-family residential properties increase with density of surrounding development, but that the quality of neighborhoods, as defined by access to other land uses, including parks, increased with density as well.

In December 2010, a similar story was published, and I wrote about it then – Walkability = Happiness – And why Does this Matter to Charlottesville Real Estate?

The 2010 study noted:

A walkable community provides residents with easy access to post offices, town parks and playgrounds, coffee shops, restaurants, barbershops and club meeting venues. The ability to walk to these important locations in one’s home neighborhood has been linked to a higher quality of life.

Social capital, a measure of an individual’s or group’s networks, personal connections, and community involvement, brings benefits such as reduced isolation, career connections, and neighborhood safety. What Rogers and her team’s work suggests is that it is these benefits — facilitated by living in a walkable community — that enhance an individual’s quality of life.

The answer remains the same – home buyers, renters, people – want to be close to stuff.

Warning: slight tangent follows …

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Real Estate Representation (Finally) Evolves in Virginia

July 1 2012 will be a day that many buyers, sellers (and real estate agents, I’d wager) learn that the current world of real estate representation is (supposed to be) about representing clients’ best interests – not merely selling a home. That’s the day that the new real estate Agency law will take effect. While single agent dual agency isn’t outlawed, real estate agents are now legally bound to explain to potential clients the pitfalls of single agent dual agency – whereby the same agent “represents” both parties in a real estate transaction. And those pitfalls now how to be clearly spelled out so that most buyers and sellers will likely look at the agent advocating for getting both sides of a transaction with a raised eyebrow (at the least).

Long-time readers know that I have advocated for true client representation for years. Simply put: if you were getting a divorce (or some other potentially traumatic legal matter) – would you hire the same attorney to represent both parties? No. Same with buying a home; usually everything goes well and smoothly, but when it doesn’t – representation is more crucial than ever before. (bolding mine)

1. That following the commencement of dual agency or representation, the licensee cannot advise either party as to the terms to offer or accept in any offer or counteroffer; however, the licensee may have advised one party as to such terms prior to the commencement of dual agency or representation;

2. That the licensee cannot advise the buyer client as to the suitability of the property, its condition (other than to make any disclosures as required by law of any licensee representing a seller), and cannot advise either party as to what repairs of the property to make or request;

3. That the licensee cannot advise either party in any dispute that arises relating to the transaction;

4. That licensee may be acting without knowledge of the client’s needs, client’s knowledge of the market, or client’s capabilities in dealing with the intricacies of real estate transactions; and

5. That either party may engage another licensee at additional cost to represent their respective interests.

Put more succinctly, if a buyer and seller enter into a dual agency relationship:

1 – The agent can’t tell you about price, terms, etc, but may have already (and probably has) advised the opposing party
2 – The agent can’t tell you anything about the property that’s useful or isn’t something you don’t already know.
3 – The agent is an impartial advisor (rather than an advocate for one party)
4 – The agent doesn’t and can’t know anything about the clients wants or needs.
5 – Get another agent to get actual representation.

Single agent dual agency sounds really awesome, right?

Presented anecdotally:

Real estate transactions require septic inspections. If I’m asked if a buyer should open up a septic system and actually inspect the system, my answers are going to be, respectively:

Representing the buyer: Yes, absolutely.

Representing the seller: No, absolutely not.

“Representing” both parties: I don’t know; you should probably figure that out for yourself.

What are the benefits of using a buyer broker agreement?

I tend to use buyer broker agreements with all of my buyer clients fairly early on in our buyer client realtor relationships and this reason is this: first and foremost it lays out my fiduciary duties to my buyer clients. It’s three and a half or four pages of how I work with my clients. It also lays out my buyer clients’ responsibilities to me. We are making a contractual agreement to work with each other. It professionalizes the relationship as well. It lays out exactly how we’re going to work together.

The Richmond Association of Realtors is doing a pretty good job conveying this change (note to CAAR: Wordpress makes great websites) – What is a Buyer Broker Agreement?

They even have sample dual agency forms you can download.


I’m happy to talk about this stuff extensively, offline – I have so many examples I could share of how dual agency is bad, how I’ve handled situations where I’ve had to separate myself from long-time clients and concede many thousands of dollars – because it was the right thing to do – and detail many of the ways in which a single agent in a dual agency situation is working for herself and not the clients.

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Dominion Power’s Water Line Replacement Program – What is It?

This came to my email inbox last week from a client/homeowner in the City of Charlottesville:

About 2 weeks ago, our little cul-de-sac began getting letters from Dominion (Power) regarding the water line running from our houses to the street. The gist goes something like this: “beneath your yard could be a $4,000 problem waiting to happen” but, “we” could take care of that for you for $3.99/month. Essentially they’re declaring that any water line failure from our house to the street is our problem (may be the case) but they (the power company) can fix it all for ~$4.00 a month. Piece of mind – enroll online. “you can’t afford to be without the Water Line Replacement Program”

So I have a couple of questions : are you familiar with this? if so, why is Dominion involved and not the city? Has there been an increase in these incidents recently to prompt such a scare campaign? $4000 seems a bit high considering where I am and the distance from house to road – what of that? What of home values and this water line replacement fad?

Turns out Dominion Power does have a Water Line Replacement Program.

Our Sewer Line Repair Program provides financial protection for the underground sewer line that runs from the foundation of your home to the main sewer line or septic tank. If you experience a clog or find a sinkhole over your sewer line caused by tree roots, collapsed pipe, heavy usage or normal wear and tear, Dominion Products and Services, Inc. will take the necessary steps to unclog a covered condition.*

Quick information from me

1) Yes, the line from the house to the street is your responsibility.
2) Yes, it does usually cost a couple thousand dollars to fix – from my experience (I’m not a plumber) $2,000 – $4,000 seems a reasonable estimate.
3) You’ll probably know that you have a leak when your ~$50/month water bill skyrockets to several hundred or a couple thousand dollars.
4) A lot of plumbing in the City of Charlottesville is old – terra cotta, orangeburg, and galvanized pipes – and these do deteriorate and go bad.
4b) Roots are bad. They damage plumbing.
5) I’d be inclined to take that $4/month and stash it away. (however, if this program works as advertised, I might be inclined to not spend the ~$300 for the inspection, and hedge my bets)
6) Other than, because they have the equipment and know-how and want to make money, I can’t think of a reason why Dominion would be offering this program.  I’m less cynical now. 🙂

The Dominion sewer line program seems a bit like cell phone insurance, but you’re probably much more likely to make a claim for a busted iPhone. The Charlottesville (and American) infrastructure is old. And falling apart. If you’re in the City of Charlottesville, the chances of your water line being old are pretty darn good.

Additionally, I have recommended (based on experienced horror stories) that buyers have plumbers scope these lines as part of the inspection process – it’s not a bad idea. Trust me. (Update December 2016 – I’m recommending these consistently for homes in the City of Charlottesville, particularly those built before the mid-1980’s)

So – if you’re thinking about putting your home on the market, be aware that this is an issue that might come up. If you’re a homeowner, pay attention to your water bill and build your emergency fund. If you’re a renter, don’t worry about it.

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What if Charlottesville had Only 29 Restaurants?

Charlottesville 29 is a fantastic new blog asking (and answering) the question – If there were just 29 restaurants in Charlottesville, what would be the ideal 29?

I found this blog when it was shared by a friend on some social network. I remember that he pointed out what is possibly the most comprehensive, definitive depiction of the Charlottesville institution known as Bodo’s. It’s a fascinating read.

When you are in Charlottesville, going to Bodo’s is just something you do. Bodo’s is so embedded in our culture that it has become a Charlottesville institution tocall Bodo’s a “Charlottesville institution.” In a city of 43,000 people, Bodo’s has a Facebook page with 15,000 “Likes.”

Still not convinced? Consider this. Combined, Bodo’s three locations feed close to 6,000 people per day. That’s nearly 500 per hour that they are open. Or, seven per minute.

I’m looking forward to reading more in my now-pared-down daily reading.

* I wonder how many of those 43k “likes” are from the City. 🙂

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Western Bypass Contract Awarded – 29 to Get more Interesting

Western Bypass rendering Western Bypass rendering, courtesy Charlottesville Tomorrow

 


It seems that the Western Bypass may actually be built.

Charlottesville Tomorrow reports that the contract to build the Western Bypass has been awarded.

Is this the right road? Probably not. It needs to go farther up 29 North rather than dump into the middle of the growth area – you know, to actually bypass the mess – but it won’t, because of our region’s collective inability to do anything with infrastructure efficiency.

So, we’ll get a sort-of-bypass.

Lynchburg has been advocating for the Bypass for decades, but their representative fairly well sums up the state of affairs:

Lynchburg’s representative on the CTB said it was time to move forward with the contract. “This is the plan, this is as good as we got, [and] this is as good as it’s going to get,” said Mark Peake. “This is far from being a road to nowhere. This is a road from North Carolina to Washington, D.C.”

And so we move. Forward?

For background, see Charlottesville Tomorrow’s incomparable coverage:

Charlottesville Tomorrow’s Western Bypass section.

The Western Bypass on Cvillepedia

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