I’m going to be posting my previously-written monthly notes. Since starting these in early 2013, the only thing that I’ve lamented about the notes is the lack of search- and link-ability. I’ve written before that the blog is my pensieve, and, simply, I want to be able to link to these stories for my clients (and for me).
So, apologies for the cluttering of your feeds for the next few days (fixing formatting from the notes to the blog is time-consuming). This one is from February 2013.
This month: A quick recap of the Charlottesville area market, anecdotes about home inspectors and a builder, life after the Board and one of the most controversial things in the Realtor world, Agent Match. Yeah, I know, this is my longest note yet – nearly 2000 words – and I’ll return to 1500 or less in 2014. It’s longer due primarily to two factors: 1) It’s the end of the year and 2) Agent Match.
The first half of 2013 was pretty awesome. Multiple offers, homes selling in hours and days instead of weeks and months, sellers gaining confidence and buyers getting fearful of being priced out of the market. The exuberance was palpable. Times have changed. In the first 11 months of 2012, 2,481 homes sold in the Charlottesville MSA. In that timeframe this year, 2,687 homes have sold. In Charlottesville + Albemarle, 1,758 have sold this year versus 1,662in the first 11 months of 2012. Take a look at this chart: things are changing.
Just for Charlottesville and Albemarle:
Single Family Homes – 77 sold in November 2013, versus 94 in November 2012 – a 19% decline.
Attached homes – 12 sold in November 2013 versus 18 in November 2012 – nearly a third fewer homes sold.
Condos – 13 sold in November 2013 versus 21 in November 2012 – about 40% fewer condos sold. Interestingly, when I dug into this data set, there was no one set of condos (like a new neighborhood as I’d initially thought) to which the 8 more condos sold last year could be tied – there were just more condos sold last November than this November.
Another interesting data point – what percentage of home sales in the Charlottesville area are cash? We hear about “cash buyers” all the time, but how many are there?
I’d run these recently for the Charlottesville market in August but was curious, so I re-ran numbers for 1 January to 1 December of this year. For sold transactions in the Charlottesville MLS:
City of Charlottesville: 54% conventional/fixed | 28% cashCounty of Albemarle: 53% conventional/fixed | 23% cash
For perspective, from 2012 –
City of Charlottesville: 46% conventional/fixed | 33% cashCounty of Albemarle: 49% conventional/fixed | 25% cash
Look, folks – local matters. The National Association of Realtors says that inventory is tight, prices are going up and and the median home price is $199,500. For Charlottesville and Albemarle – inventory is up, year over year and the median price for homes closed in November was $361,225.
Home inspectors can (and usually do) provide, as I tell my clients, perhaps the best education and insight you will ever get into your home. Really good ones provide knowledge, a candid evaluation of the home and its systems – andcontext. Context as far as “while this is a deficiency, it’s normal to see in a home of this age” or “I have to call this out, but it’s really not an issue that should make it on your priority list of things to fix” to “this is a serious matter that you should have addressed prior to closing.” Good ones provide this information in a way that neither minimizes the issues nor terrifies the buyer (or seller).
Example of how to not serve a buyer or seller well: a home inspector on a report I saw this year called out a missing screw from a receptacle as a deficiency. Really. And the home seemingly got worse from there. I see this and immediately question the merit of the rest of the report. And the seller discounts the entire report, invalidating the valid findings. A missing screw is not a deficiency.
One of the roles I fill in my representative capacity is evaluating people and professionals and conveying trust. Calling out missing screws (along with many other insignificant “deficiencies”) means to me that this person is not someone I will recommend to my clients – not only does tearing down the house benefit neither the buyer nor seller, it serves to reduce the credibility of the overall report, and the credibility of those who rely on him. It also harms negotiations. And what we really all want – buyers, sellers, agents – is a good, reasonable inspection.
One of the things I use to evaluate builders is whether they’re local and whether they care about their products and their reputations. I’m not going to share the builder’s name in this anecdote, but I’ll note that this is a local builder. A seller was selling his home that he’d bought new more than five years ago. The home inspection revealed a few defects that had developed over the years as things do. Curious as to whether any of these were originally code defects, he called the builder. The builder sent a guy who fixed nearly everything on the list. Simply put, this is way above the call of duty, but I’ll never forget this and I’ll tell this story (with the builder’s name) to every one of my buyer clients who is considering new construction.
Post-Realtor Board life.
I’ve served on the Charlottesville Area Association of Realtors Board of Directors for about 8 years – more than half the time I’ve been a Realtor. This was an enlightening and a great, albeit frequently frustrating experience. If nothing else, I gained insight into how the Board works and what the battle for maintaining the status quo looks like. I’ve learned again and again that speaking out bluntly and undiplomatically has consequences – particularly as I typically filled the role of sole dissenter – I was one who challenged the status quo, and this is a significant reason why I was never selected for “leadership.” But I always felt that the opinions I expressed, the information and insight I provided, merited discussion and debate rather than a dismissive, usually unanimous vote against my positions. I firmly believe (and wouldn’t have argued had I not) that my opinions and positions were the right ones and for the benefit of theprofessional membership. It was a good eight years. Part of me is looking forward to returning to the outsider position, while the other part is a bit fearful of the future. If anyone has suggestions on groups at NAR, I’m open. 🙂
Lots of buts, which is normal for a product evolving in public.
Here we go. Inevitability is upon us. Again. (Isn’t it always?) For outsiders, Agent Match is a beta program – in only two markets right now – that seeks to succinctly display Realtors’ productivity for potential sellers to evaluate. Think Yelp for Realtors, sort of. They’re going to use agents’ current # of homes for sale, average list to sold price, # of homes the agent sold and the average Days on Market for the preceding 6 months. These are good data points – which should absolutely be part of the evaluative process when choosing whom to hire. But. This program will provide a leg up for productive Realtors and serve as a hindrance to newer and less productive Realtors. Remember baseball cards showing a player’s stats? Kinda like that.
This is going to happen, whether by Realtor.com or some competitor. The real estate community, despite being surprisingly populated by technological early adopters, is remarkably, head-bashingly averse to publicizing data – any data, really, but agent stats have touched a mighty raw and inflamed nerve. That said, this is a good start. How they ultimately define, display and explain the involved nuances (is the listing agent who sold the home the first or the third agent? What was the original listing price? Was single agent dual agency involved?
So far, the Agent Match folks have done a fairly poor job of outreach and selling the idea to the Realtor community. Again, but. That they’ve done outreach at all is remarkable – they don’t have to. The National Association of Realtors neither owns nor controls Realtor.com, which is owned and operated by Move, a publicly traded company. (Someone please correct me if I’m wrong here) This arrangement leads to justifiable consternation and confusion when Realtors who pay dues to the NAR are told by the NAR that NAR doesn’t control Realtor.com, but “realtor.com® is the official site of the National Association of REALTORS® and is operated by Move, Inc.” – Confusion all around.
I’m curious (and asked the Agent Match folks) how they’ll evaluate buyers’ agents. They say that for now, they’re “focused on the selling experience (owners) as of now.“
If you’re interested in some deeper thoughts I wrote about “what does “best” mean to you?” there are two stories I have written within the past three years: My “best” is likely different than your best. What makes one real estate agent “better” than the other?
I remain convinced that the single best way to accurately evaluate an agent’s professionalism, ethics and abilities is through honest, candid peer reviews. Respectfully, consumers who buy or sell a home every 5-10 years aren’t as qualified to evaluate an agent as are those competent professionals who do practice the craft. This will never happen.
And a flash update just before sending – one of the Agent Match advisory board members has resigned, having lost confidence in the product. Interesting.
From the blogs –
RealCentralVA – 13 posts in November. The Albemarle County Board of Supervisors underwent a significant shift, I discussed a few things to consider about whether to act now or wait until the spring, the student housing complexes on West Main are growing and the West Main we remember from last year is never to be seen again, I found a new butcher in Charlottesville (and have been back several times), I provided insight into what’s “Usual and Customary” in Charlottesville’s real estate practices and contributed to some great tips for (first time) homebuyers.
RealCrozetVA – 14 posts in November. Lots of change in Crozet, 180 Crozet kids are on the Angel Tree needing help this Christmas, Exterior renovations on the shops housing Crozet Pizza and Over the Moon Bookstore were completed, the community did an awesome job live-tweeting the CCAC meeting and bureaucracy again delays new sidewalks.
Two more things:
1 – I’m testing a pop-up thing on my blog. I’m curious to see what impact it has on driving folks to subscribe to this monthly note.
2 – This is one reason I’m not totally sold on the housing “recovery” (this too)- I know it’s extreme, but reality is somewhere between the extremes.
How ’bout that? I’m going to chalk writing this monthly note as one of the best things I’ve done this year. Since the first note in February, I’ve written well over 15,000 words here, the number of subscribers has increased about 6x from the first note, I’ve received some amazing and insightful replies from you and perhaps most importantly (and selfishly) this note has provided a much-needed outlet and rejuvenation of my love of writing. Thank you. Sincerely and humbly for reading every month, and for sharing this note with your friends. Really.