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This encounter has stuck with me. In early January I was returning a gift, and tried to get it put back on my wife’s credit card, which I didn’t have. The young girl working at the counter tried to make it work, but could not. She sought out the manager, who tried as well, went back to try something else, while the girl at the counter kept valiantly attempting to process the return. They were understaffed and overworked, and they were exasperated, but kept trying.
We’re at about the 15 minute mark of them trying to make this right, and had determined that issuing a gift card would be the best path. The manager went to the back.
The original girl looked at me, and with somewhat pained candor said, “thank you for being kind about this.” Someone thanking me for not losing my mind over them trying to do more than they needed?
Being nice isn’t hard. It’s quite simple. We would all do well to be nice more often.
I wrote in March that I would be writing about “closing gaps” this month. I regret to inform you that I have no idea what I meant.
I’m Glad I Survived the Crash/The Market
I’m glad I went through a crash; I’m better attuned to possible signs of a coming correction.
- Increasing interest rates
- Prices surging
- Slowing buyer traffic
- New construction selling at remarkable rate and prices
I remember in the time after the crash when a new construction agent told me, “I knew there was something wrong when we were writing contracts with an 18 month delivery.” We’re not there yet –
The market. It might be slowing. What does the data say? What about the anecdotes?
Anecdotally, the market seems to be slowing a bit. Houses that I’d have expected to go under contract in less than 2 days are taking 7-15 days to go. Houses that should be moving aren’t. Buyer activity seems a touch lower. Maybe it’s the seemingly-soaring prices. Maybe it’s new construction’s impact on the market. Maybe it’s rising interest rates. Pricing right is critical, which is harder to do in this market.
For some fun top-level data, here are a few reports for you.
We might be in the eye of the storm, waiting for the other shoe to drop. This could be just a lull in the market. Interestingly, I showed a short sale last weekend; the seller purchased about 15 months ago. This is the first short sale I’ve shown in some time.
A few points
- In Charlottesville + Albemarle, from 1 April to 18 April 2018, 172 resale homes went under contract. In that timeframe in 2017, that number was 135.
- In 2018, 1,072 homes came on the market from 1 January to 18 April; 1,008 came on in that time in 2017. In 2018, (per MLS) 20% more new construction homes came on the market than that timeframe in 2017.
- Quality inventory remains low. While there are 844 homes on the market in Charlottesville + Albemarle, there remains a dearth of good inventory for a lot of people. Digging in:
I’ve not seen a better representation of the importance of focusing on your micro market than this example:
In Charlottesville + Albemarle, there are currently 592 resale homes on the market. The average price is $825K. (Not a typo) Median is $525K.
- Under $1M – 486
- Under $750K – 425
- Under $600K – 361
- Under $500K – 286
- Under $400K – 206
What I’m seeing
New construction is a force in our market. Buyers who target $450K find themselves lacking the $30K – $75K that houses in that price point “need.” (There’s “need” as in “there’s a hole in the roof” and there’s “need” as in, these counters and floors, while perfectly functional, are functionally market-obsolete.)
Often, these buyers choose to then spend >$100K more to get that new home, with new systems, new smell, new features. When choosing this path, my advice is to aim for quality over square footage.
Interest rates are going to affect buyers’ ability to afford homes, and their perception of what they can afford and this is going to affect pricing. If you’re a buyer in a position to buy, I’d be inclined to nudge you to be more efficient in your decision making process. If you’re a seller, maybe be a touch more aggressive in your pricing strategy.
Self-Care – Value of missing riding a bicycle, plus joy.
The value of having something – almost anything – that is exercise related, prior to allowing the world in, is inThe value of having something – almost anything – that is exercise -related, prior to allowing the world in, is incalculable.
I hurt my back. Slowly, quietly, until riding my bicycle was impossible. I’m making my way back (apparently you’re supposed to stretch at least once every couple years) and I’m at the fever stage of recovery. You know when your kids get sick, their fever breaks, they start running around again, and you have to make them stop and rest? That’s where I am – mindful, patient bicycle riding.
Missing it, though – the routine, the friends, the speed, the quiet, and the scenery, not to mention the stress relief. I’m glad to be getting back. (Get it?) The joy of riding a bicycle is something that I missed and I’ve found myself enjoying the rides more, the simple freedom of being outside is something I value more now.
I highly recommend listening to this podcast – The Lonely American Man; riding bicycles with friends is about more than physical fitness.
One of the best and most powerful things my clients say to me is “I trust you.”
More on this next month (the note is running long)
Stories I tell Clients During First Showings + Day One
I don’t know that a buyer client has ever purchased one of the houses they have seen on Day One. Day One is the day we start figuring each other out, whether we like each other, start determining if their needs/wants/expectations are going to align with the market and their options. I talk a lot. I listen more. When a seller’s agent asks me if my clients are interested, I usually start with “It was Day One… ” and they get it.
The first showing with buyers is the second step in the home buying education process. The first is us meeting in the first place.
I have been telling the same stories for years, and adding to the mix here and there.
Some of my “first time out” stories
– Quest – It’s bad.
– Masonite – It can be, too.
– Carpet – It’s gross.
– Fair housing – I don’t discriminate; it’s neither nice, profitable, nor legal.
– Roosters – Want to live near cockfighting?
– Lead paint – It’s bad.
– Left turns – Know them; figure them out.
– Wallpaper – 1) It can be hard to take down. 2) I tell one of my favorite stories about putting my foot in my mouth. Bonus: I was right in the end… it just took four years.
Every buyer has a Day One. Every seller has been one. You have to start somewhere.
What I’m Reading
- Why American Collapse is Only Just Beginning (Not Ending)
- The Brain-Changing Effects of Exercise
- Amazon and Google Are Back to Feuding, This Time Over Smart Homes and Nest
- Welcome to the Age of Climate Migration
- Developer wants to build homes in Virginia Beach area that floods; city leaders worried – so, so stupid. I mean, stupid.
- Jeff Bezos’ shareholder letter
- Nowhere to go but up? How increasing mortgage rates could affect housing
- In Britain’s Playgrounds, ‘Bringing in Risk’ to Build Resilience
- To buy or to rent: The great homeownership debate
Thank you for reading!
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Jim Duncan, Nest Realty, 126 Garrett Street Suite D, Charlottesville, VA 22902. Licensed real estate agent in Commonwealth of VA.