A short one, too – about 18 minutes.
- Market updates, micro-markets, choosing the right lot when you buy, and considering resale
- 3D printed homes, how they are likely to change the real estate market, new construction, change new construction labor, piss off NIMBYs, and the amazing New Story charity. (and yes, I just donated a little bit)
- Macbooks vs Chromebooks
*Unedited for the most part. If there’s a confusing part, read it aloud. 🙂
Jim Duncan: Hey there, it’s Jim Duncan with Nest Realty, this is Real Pod VA, sitting here with Dave and Bart.
Bart Isley: I’m Bart Isley with Scrimmage Play.
Dave Stipe: And I’ve Dave Stipe with Rockfish Music.
Jim Duncan: Alright in this week, I think we’ll talk about selling your home, your resale home in a market with tons of new construction, and I’ll do a quick market update.
Jim Duncan: Just put out our first half of 2018 Nest Report, and there are a couple top line numbers that I will preface with. For the most part, top line numbers are completely and totally meaningless. Because I can say, I can look at the Charlottesville MSA, which is our region. And there are almost three months of inventory. It’ll take three months to burn through what’s on the market. Total sales are up 10% and median sales price is 310. Sounds pretty good. Good luck finding a great house in the city of Charlottesville for 310.
Jim Duncan: City of Charlottesville, the average sales price, is 387,000. Average sales price in Albemarle County is $450,000. Fluvanna’s 244. Green is 272.
Bart Isley: Did you say the average is $450?
Jim Duncan: Yep.
Bart Isley: Yeah, that’s not gonna work.
Jim Duncan: So, a lot of that is predicated on the fact that we have so much new construction that’s selling right now, and you can’t, for the most part, it’s extremely difficult to find a home, new home, for sale, or that sells for in Albemarle County for under 450, 500. Generally, if I’m looking at new construction-
Bart Isley: But they are selling?
Jim Duncan: They are selling, a lot of them are selling. There’s a ton, you know I rode my bike this morning up to the back part of Westhall and Foothill Crossing. Have you been back there recently?
Bart Isley: Yeah.
Jim Duncan: Holy moly.
Bart Isley: It’s crazy.
Jim Duncan: It is astonishing. So, there’s a ton of new construction that’s going on right now. So, these numbers when you say that, yeah at median sales prices is 310. That sounds really good, but then you actually start looking into, what as I call is the micro-market, your specific band of the market, it’s gonna be very, very different than any top line number you see. And frankly, as much as I love our Nest Report, or any of the media reports, or any of that stuff, because it’s all soundbites. Figuring out what you are comfortable paying on a monthly basis is a whole lot more than a three or 10 page market report that might touch on your mini, micro segment for half a second.
Bart Isley: Correct.
Jim Duncan: But broadly, right now, what’s today, mid-July 2018? Pockets of the market are doing exceptionally well. I showed a house in the city last night that had three offers. But it was a house for around 300. There’s a lot of people who wanna buy a house in the city of Charlottesville for around $300,000. So, but you’re also seeing some segments are, you know some segments are dead. Just dead, dead, no traffic whatsoever. And some are doing much better. So, I think it’s something that we watch, when we look at the market analyses, it’s good to know that Fluvanna County has contracts that were written, up about a half a percent year over year. It’s good to know this stuff as a top line, but digging in, I think that for, if you’re looking for a house in Spring Creek in Louisa County, city of Charlottesville numbers or county of Albemarle numbers are completely and totally meaningless.
Jim Duncan: So, transitioning quickly to putting a house on the market when it’s a resale. I was showing houses last week, recently, to some folks and one of the neighborhoods in the county of Albemarle that is new construction, two lots left, and the last two lots were abysmal. Just, they sucked. And so, when I look at a house like that, I selfishly put myself in the position of, okay when these guys call me in seven or 10 years, what am I gonna tell them?
Bart Isley: Right.
Jim Duncan: I’m gonna say, I really wish you hadn’t bought that house. Because that house is very similar to all the other houses on the street, and your lot sucks. And so, if you buy it, and I’m making these numbers up, you buy it for 450 on a street of 450 homes, and I go and put that house on the market in seven years, that’s gonna be a hell of a discount.
Bart Isley: Talk to me about what makes a bad lot when you’re looking at something like that?
Jim Duncan: So, I define for the bulk of the market, unless you’re looking for 70 acres, 100 acres, or two acres, or whatever, but the bulk of the market, and I ran these numbers a few months, most of the market in Charlottesville and Albemarle are on lots that are less than half an acre. So, presume that a half an acre lot is, or under, is what we’re looking at.
Jim Duncan: I define a good and functional lot as a lot for which you can throw a ball for a kid or a dog. And through my lens, plant some tomatoes, let the dog out to go to the bathroom at three o’clock in the morning. That’s the kinda lot that most people want. But a bad lot is one where it drops off. You open your back door, there’s a three by three square patio, and a foot and a half later, you’re going off a cliff. You know that’s a bad lot. Or, you walk out four foot and you’re facing a retaining wall, which I’ve seen a lot of those. Or, you looking straight up a hill.
Jim Duncan: You’re trying to look at today, I advise my clients to not get caught up in the “only two lots left.”
Jim Duncan: Talk to me in eight years when you can’t sell it.
Jim Duncan: So, a bad lot is something that, well, I was showing a house two years ago, urban ring of Albemarle county. It was, it had been snowing, at some point, and we walk out, the deck was about 20 foot up. So, we go down to the basement and we walk out the basement, and the house is sited on the lot, and in about five foot, six foot, it just drops, fifteen, twenty degrees.
Jim Duncan: My clients, their first-time home buyers. And they were frustrated with the market at the time, and they were trying to talk through the “this’ll be fine. This is gonna be great, alright you know we don’t have kids yet, but when we have kids, they could run 100 foot down to the bottom of the hill and they’ll play.” Would your kids go out and run down a fenced yard, to 100 foot down and chase a ball? No, mine wouldn’t.
Bart Isley: I mean, you said it had snowed. Was is sledable?
Jim Duncan: It was sledable until you smash into the fence.
Dave Stipe: Sledable until you hit the retaining wall.
Jim Duncan: Sledable once.
Bart Isley: Some know. And by the way, buying a house for a sledable hill in Central Virginia, bad idea.
Dave Stipe: You’re gonna get sledable snow twice in five years.
Bart Isley: It’s gonna be a fun two days. But that’s it.
Jim Duncan: But no, so we’re standing up there, and they’re like “oh, we can do, you know kids’ll do this,” and I’m thinking and shaking my head subtly, no they won’t. But then I look around, and I see that we’re standing like a five foot radius, at the foot of the deck, and I look down and I see dog poop, six foot radius, everywhere.
Jim Duncan: And I looked at it, and I said, guys, the dog’s not going to the bottom of the hill. Do you really think your kids will?
Jim Duncan: They did not buy that house. In large part, because the yard was miserable. It’s something that I am very aware of, is resale value. So, when I go and sell the house in seven or 10 years, I wanna make sure that I’ve helped my guys make a good decision, but I also make sure that that, I’ve learned this, that resale it not the main focus. It’s something that I have to be very aware that there’s intrinsic value, and it’s not necessarily an investment. It’s a place to put holes in the wall, and tear up the carpet, and spill coffee.
Bart Isley: And when there’s so much new construction out there, you know, when a person can say “I can walk in and have a house that is brand new,” and especially if you can get it, get a contract before it’s being finished, you can put the final details to be exactly what you want them to be, and I mean that’s an appealing thing for buyers.
Jim Duncan: Yeah, new home smell is a thing. I mean people, people will go for a house that is $600,000, brand new, versus one that is two years old for 550. Which, I think as an objective person is somewhat absurd. But people like new. They like to know that they are gonna have seven to 12 years of maintenance-free living, and no one’s going to the bathroom in the house, and even though I’d be happy to tell them that contractors go to the bathroom in the house.
Dave Stipe: When we bought our new construction townhouse in Westhall, a friend of mine, Frank from Delaware, made sure that he ran into the house first, so that he could use our bathroom before I did, and he never let me forget about it. Bart knows Frank, Bart gets this.
Bart Isley: That’s not a good friend, that’s a great friend.
Dave Stipe: I agree.
Bart Isley: This is Bart Isley with Scrimmage Play. I was going to write an old school radio jingle for this, something slick with a catchy chorus of people just singing our name over and over again, but we have zero musical talent on staff.
Bart Isley: What we do have, and that is one slick transition there, is a passion for talking about, writing about, and shooting video of high school sports in Central Virginia. For almost a decade, we’ve been the top source for high school sports coverage in this area. We’ve also got a podcast that’s not part of the Central network. If you love high school sports, give us a listen, and if you like what we’re doing, check out the support link in each episode description and support the work we’re doing. In the meantime, we’ll keep working on that jingle.
Bart Isley: I mean, I’m literally like, everything that you’ve said, I mean going back to last week’s episode when we were talking about arms are at 50%. We were talking about housing prices that are just inflating, and inflating, and inflating. Tons of new construction. I’m sitting there going, this is, we’re on repeat.
Jim: We’ve done it before, yeah.
Bart Isley: We’re on repeat right now.
Bart Isley: And I’m so glad that we got our refinance done and out of the way now.
Jim: Oh man I’m not gonna move, I don’t wanna move.
Bart Isley: Because I don’t intend on moving out of this house, possibly ever.
Jim: I’m good with knocking my house down and rebuilding a 900 square foot house. And when I pay my house off, I’ll knock it down, I’ll 3-D print a house for $7,000 and be good. Because in 10 years, 3-D printing is gonna be that viable.
Bart Isley: Really?
Jim: Oh yeah. 3-D printing is coming. There’s New Story, I’ll put a link in the show notes.
Bart Isley: 3-D printing a 1000 square foot home?
Jim: I’m touching on this in my monthly note a little bit. Let me find it. There’s a charity called New Story, okay? Looking at their site now, I met the founder a couple, well actually I met him two years ago, and I saw him again a couple weeks ago. They can 3-D print a house in 12 to 24 hours for $4,000.
Speaker 5: Yes. Where do I sign up?
Bart Isley: Like I have a thousand questions, I mean, plumbing, electrical.
Jim: I mean, it’s for the dry in. It’s to get the structure of the house done, but then you need to do the plumbing-
Bart Isley: What’s the material?
Jim: It’s a concrete type, product.
Speaker 5: A bunker. I’ve always wanted a bunker.
Bart Isley: Cheshire Cat grin from a guy who just wants a bomb shelter in his backyard.
Speaker 5: That’s what I’m looking for. Can they put this product underground?
Bart Isley: Filled with Spam.
Jim: Yeah so in 10 years, I will bulldoze my house and 3-D print a house for me, my bikes, my wife, maybe a new dog.
Bart Isley: Does your wife get input on this? Is she into this?
Jim: No, I just decided. I just concluded that I’m gonna spend 10 grand on a new house, and it’ll be fine. No, but 3-D printing gonna-
Bart Isley: Hey honey, I got a great idea, here’s what we’re gonna do.
Speaker 5: Who is not gonna be down with this?
Bart Isley: We’re gonna burn our $400,000 house to the ground, so we can build a $10,000, 900 square foot, concrete bomb shelter for us and my bike. For you, me and my bike.
Jim: It’s not necessarily an investment, it’s an investment in your quality of life.
Bart Isley: Whose quality of life?
Speaker 5: For a long time, we were buying MacBooks all the time, alright? But some us have evolved, and now we’re buying Chromebooks. So, you pay $200. You use the Chromebook for two years, then you dump that Chromebook. You pay $10,000 for a house, and then you dump that house, b
Bart Isley: And an environmental disaster.
Speaker 5: It is, that’s how it works, the Chromebook. It’s the Chromebook of houses.
Bart Isley: (Laughing) It’s the Chromebook of houses. Oh, I can’t breathe.
Speaker 5: It’s the future of your industry Jim.
Jim: There’s no doubt, and it’s gonna be fewer contractors, fewer builders, more on-site, bringing this ginormous printer. And they’re building a community in El Salvador this year, it’s gonna be the first 3-D printed community of homes.
Bart Isley: Automation is gonna (bleep) everything.
Jim: Oh yeah, without a doubt. I probably wouldn’t use that on the podcast, but yeah you’re right.
Bart Isley: I’m gonna beep the F.
Jim: It’s gonna be a world shift in how homes are built. If you come in, and you clear cut 20 acres. You can come in and 3-D print a neighborhood in a couple weeks.
Bart Isley: In a week.
Jim: And then you have the contractors come in, doing the plumbing, the electrical, and all that stuff.
Bart Isley: That takes two more weeks.
Jim: So, it’s gonna shift a whole lotta stuff. It’s really gonna, the new construction economy is gonna be vastly different, but I also think that it’s something that, it’s gonna be interesting to see that if the shift happens, and people start demanding this, and they start 3-D printing, or the construction community says, or there’s gonna be one builder that takes the lead. He comes in, or she comes in and says, “I’m 3-D printing houses, who wants one?” and if they take off, it’ll shift everything.
Bart Isley: And, I mean, let’s just consider once you get in all the materials for like cabinetry, and plumbing, and all of the amenity décor stuff. If it’s only $10,000 to put up a house-
Bart Isley: 40, 45k for a home? As part of a major ranch for this podcast now that’s been going on for six plus months, I mean, low income housing, has been a major thing that we’ve discussed here.
Jim: Well it’s not even low income. I mean, it’s affordable.
Bart Isley: That’s true right, not low income, I’m sorry.
Jim: You know it’s affordable.
Bart Isley: Affordable housing, where we’re not building $450,000 homes as a median for Albemarle County.
Jim: No, but I mean this is where I will specifically using the term NIMBY as a pejorative. I mean, the nimbies are gonna say “we don’t want those concrete houses. We don’t want those kinds of people living next to us.”
Bart Isley: I mean, we did a pod just a couple weeks ago called “Housing is a Luxury Item.”
Jim: So, this is gonna be-
Bart Isley: Like I’m skeptical as all get out from this 3-D printing of a home, but if it is legitimate, I mean it does resolve a major, major housing affordability and getting a home out of a luxury item, as opposed to a practicality item again.
Jim: There’s a, I’ll put this in the show notes also, a colleague of mine saw the 3-D printed house in Austin and said it was amazing.
Bart Isley: Really?
Jim: Yeah, so I mean again-
Bart Isley: You know people don’t need, I wanna start doing some Google searches for 3-D printing houses.
Jim: Most of my clients, do not need 2,500 square feet. They need 1,200, 1,300.
Bart Isley: And that’s part of what the tiny home boom has been about too.
Jim: Yeah. So tiny homes, I’ve talked to clients who say that they want a tiny home.
Bart Isley: I typed in the Google search, I typed in “3-D,” the first thing that came up was “3-D printed house.” Now, either that is a popular search, or Google is just listening to us talk about it as we record this podcast.
Jim: Was listening to you and they said “oh, okay.”
Bart Isley: (Laughing) Get out of my head Google.
Jim: But yeah, it’s gonna change, it’s something that I think is gonna shift when it takes off, and it will because fundamental economics are gonna demand it. It’s gonna change everything. I’ll let yo Google search.
Bart Isley: A pretty cool home for $4,000. This the new world for Airbnbs is what happens.
Jim: Yeah, we gotta keep those Airbnbs out of here. Nobody wants no Airbnbs.
Bart Isley: Mr. anti-Airbnb. No think about it, you could put up an entire little, you don’t want it to takeover the neighborhoods that are already existing, but you could build up neighboring neighborhoods, and just be like here’s a whole network of neighborhoods that can be Airbnb’d.
Jim: Good luck with the nimbies.
Bart Isley: With the what?
Jim: Nimby? Not in my backyard.
Bart Isley: Oh well yeah.
Jim: Yeah then it’ll never get done. But no, say it’s, I’ll be like New Story charity is phenomenal. They’ve build a couple thousand homes now so far.
Bart Isley: That’s incredible.
Jim: And they’re doing it in Third World countries, and they’re extraordinary, and it’s really amazing what-
Bart Isley: I don’t know why my first instinct was skeptical about this because the more I’m actually letting the wheels turn in my head, it makes a lotta sense. That’s unbelievable.
Jim: Yeah, I mean they just bring in, it’s not “just,” but they bring in a machine and they 3-D print the house on-site. Think about that. Almost Star Trek-y.
Bart Isley: Can you put this link up? Because, it’s a whole video showing how the thing gets printed and that’s pretty awesome.
Jim: Yeah, so I’ll put that in the show notes and I’ll send it to you.
(gentle country music)