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As the Market Turns?
Signs are everywhere, but discerning meaning and relevance is hard to do.
- Offering a Cruise for 2 with an accepted offer received by June 30, 2018*(broker approval required). Nope. Nope. Nope. If I, as a buyer agent, were to encourage my clients to make an offer on an house so that can get a cruise? Nope. NB: We haven’t seen this type of thing since the last downturn.
- Buyer Agent Bonus! (of $5K)
- Email flood. I don’t know if real estate companies rediscovered email in the past few months, but I get more emails about new listings, open houses, and broker open houses than ever before.
We’re seeing a few more rentals popping up.
- In conversation with a colleague this week, her comment about a particular neighborhood was that it feels like we’re watching it implode. It’ll come back, but it’s going to take some time.
- I saw a buyer broker bonus of $10K. $10K bonus for me to convince a buyer client to buy a house! What?
This could be the point where we look back and say, “There it was!”
Every time I write one of these, I think about the absurdity of market reports. Market reports reflect market activity in the past, attempt to figure out what just happened, and aren’t so good at projecting the future.
What is it that buyers and sellers want to know?
- Can I/should I buy a home now, or should I wait?
- Can I/should I sell my home now, or should I wait?
- If I’m able to sell, where will I go?
No broad-based market analysis can answer the above questions if you’re in one of those two positions. Give me two price points and I’ll give you two different analyses and opinions.
With that preface …
Days on market are down. Sales volume is up. Prices are up. Inventory is down. Sellers are getting nearly 100% of their asking prices.* (I can’t stop myself; here’s the asterisk – that number is complete BS)
But … Affordability is way down.
– If you’re buying new construction in an area with a lot of new construction, I hope you’re prepared to be there for at least 7 to 10 years.
– If you are a seller with a home that is competing with new construction, you may be faced with realizing less return than you had thought or hoped for.
– Homes within 3 miles of downtown Charlottesville, particularly those that are highly walkable or bikeable should be fine for the foreseeable future.
– It would be irresponsible to say, “The market is X!”
I’m consistent (from 2017).
I’m not saying that we’re going to see a bubble and burst in the same form or fashion as we did in 2004 – 2009, but I am advising caution. Caution meaning: Don’t jump just because you think this is the only house on the market that you’re ever going to live in/love. There is always another one.
Make sure that as a buyer, you have the life/work/play confidence that this is the place you want to be and live for at least 5 years. The real estate market has been bad; it likely will be again. Choose your home wisely.
I’m doing something I’ve not yet done here; I’m shorting the analysis here and inviting you to call or email me if you’re interested in talking about the market. Let’s have coffee, beer, peanuts and chat. Deciding to buy or sell can be a complex conversation that necessitates more than a “prices are X” conversation.
It was a conference unlike any other. Actually, it wasn’t a conference, it was a show. Topics ranged from:
– green urban planning (amazing)
– to gentrification (remarkable parallels to what’s happening in Charlottesville)
– to a violin player
– to 3D printing homes
– to the language of film (I will feel manipulated forever now when watching movies)
– to the inspirational founder of Finger Bang, a fancy nail company
– to a professional poker player who talked about living life with the hand we are dealt.
– to the Yo Ching, and a whole lot more.
Real estate folks talked as well, but they were maybe 10% of the show. They were amazing, too.
Each person gave me — and presumably each attendee — something to think about. There were no takeaways (“Do this and you’ll sell more houses!”); the takeaways were more ethereal and more profound. One that I will share is in part:
If you’re reading this note, I’m going to assume that you’re pretty lucky. We all are. It’s our responsibility to recognize this. I’d wager that we all have our bad days, but our bad days are infinitely better than the bad days of much of our world. Prior to the show, I was very much aware of this fact. After the show, I’m committing to sharing this more.
Not sure I’ve ever written about this, but for every closing (and for my kids’ Christmas and Thanksgiving presents), I give to the Blue Ridge Area Food Bank. I’m privileged and lucky to be able to do so. If you’re reading this note, I’d wager you’re lucky as well. If you’re ever so inclined, there are an awful lot of hungry people out there; your food bank could probably use your money.
Lessons Learned Waiting Tables
Everyone should do it. Humility. Patience. Low pay. Pay that’snot commensurate with effort. Life isn’t fair. People can be wonderful, appreciative, and empathetic.
I had great times when waiting tables a couple lifetimes ago. Great hours, fewer responsibilities, and lessons learned on the floor and in the back of the house that couldn’t be learned better anywhere else. Many of those lessons and experiences transition nicely to practicing real estate.
- Think before you speak; an upset (and wrong and mean) customer is the one who’s going to be tipping you. How best to defuse, ameliorate, and satisfy the customer? Even if it requires losing face.
- Learn how to pitch in. I was never trained to be a line cook or a dishwasher or a host, but I figured out how to do each pretty well (in short spurts).
- Breathe. I’ve never seen a chicken run around with its head cut off, but I can imagine how they feel.
- Look out for your friends. If they’re in trouble, offer a hand, especially when they don’t know they need it.
- Always be nice to the cooks. When you need something “on the fly” because you may or may not have forgotten it, you need the cooks to have your back. (But not every damn night; then you need to find a new job)
Does the Consumer Disappoint You?
A question posed to the head of one of the most prominent real estate companies in the country at Turn On: Does the consumer disappoint you?
My answer: Yes. Absolutely. When a consumer hires a family member because they feel familial obligation or hires a listing agent who takes photos of the house from the car using their flip phone or chooses an agent to “represent” them when the agent does not have lockbox access to the geographical region in which the buyer is searching.
Yes, when the consumer enables and encourages part-time, uncommitted, treat-this-like-a-hobby Realtors, they disappoint me. The consumer disappoints me when they choose highly unethical representation.
However, my clients amaze me more than I can ever express. Their patience, persistence, willingness to embrace introspectiveness, ability to see reality, and balance that with their dreams and goals, and their ability to listen to me, and to each other … that’s what I choose to focus on. There are always going to be things that challenge and disappoint. Mediocrity will never cease. Best to avoid it.
The Contract of Purchase we use calls for the seller to provide a clean water test. In practice – seller has a test for bacteria and coliforms. Usually the test passes the first time. Sometimes it doesn’t. When a well test fails, the seller hires (usually) the same person who did the first test to come back and bleach the well. They drop a bunch of bleach in, run it through the system, and let it sit overnight. They come back the next day, run the bleach out, and do a new test … that usually passes (There are always exceptions. Maybe more on that another time).
What I’m Reading
- How to 3D Print a House in a Single Day – this could change everything.
- A new proposed law would turn drone journalism into a swarm of lawsuits and make it easy to sue over news photography – huh.
- Thermostats, Locks and Lights: Digital Tools of Domestic Abuse – nothing wrong with analog.
- U.S. Housing Bubble Enters Stage 2: Suddenly-Motivated Sellers
- What your smart devices know (and share) about you
- Health Insurers Are Vacuuming Up Details About You — And It Could Raise Your Rates
- “Without any public scrutiny, insurers and data brokers are predicting your health costs based on data about things like race, marital status, how much TV you watch, whether you pay your bills on time or even buy plus-size clothing.”
- Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs
- The titling is fun; newest episode is “The One Where Jim Talks about ARMs and Dave Panics about the Future.” We are still working on the rhythm of publishing, but so far, I (and we) like how this pod is developing. I do hope you listen, and like it.
- 2nd Quarter 2018 Charlottesville Area Market Report
- Reddit Questions about Moving to Charlottesville
- There were a few good stories, but I’ll post just this one about the fireworks; it’s truly one of my favorite days in Crozet.
Nest is now offering franchises. This note is explicitly not for real estate folks, but I know a few of you read this note anyway. If you’re reading, and you’re interested in talking about a Nest franchise, or want to suggest a location, please reach out.
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Jim Duncan, Nest Realty, 126 Garrett Street Suite D, Charlottesville, VA 22902. Licensed real estate agent in Commonwealth of VA.