CAAR Blog

One of the distinct privileges I have in this community is working with the Save the Fireworks Foundation.  This all-volunteer group is responsible for the Annual 4th of July Festival in McIntire Park, including raising the funds and planning the event.  Actually, to call the group “all-volunteer” is a misnomer.  We have professional working the event if you count the Parks staff, the bus drivers, the fire and rescue personnel, the police, and of course the pyrotechnics crew.  The all-volunteer part is the multiple planning sessions that we hold to make sure everything is in order.  At those meetings, all these professionals show up and essentially volunteer their time with the only pay coming in the form of Papa John’s Pizza and a Coke. 

I think I can speak for the entire planning committee when I say that this project is a labor of love.  Personally, I feel a debt to our founding fathers and patriots who created this free country.  They certainly put forth a much greater effort than we do and they didn’t even get Papa John’s Pizza and a Coke. 

A few years ago, the Annual Festival was in danger of going away, but we saved the Fireworks - at least for now - by uniting the entire community around the event.  We now have what I call the 4 pillars of our core community on the same team to make sure we always celebrate the Independence Day in the home town of the man who drafted the very Declaration that began our existence as a country.  The four pillars are the City of Charlottesville, the County of Albemarle, the University of Virginia, and Dave Matthews Band.  For those of you who might be surprised by DMB being included in that list, you should know that the Band, through the Bama Works fund, is the largest supporter of not only the Fireworks, but many other wonderful programs that make this community special.  DMB is a great friend to this community and we are luck to have them as neighbors and supporters. 

Have a safe and happy 4th!

Many sellers have struggled with accepting the realities of this market. Home prices are NOT what they use to be in 2005-6. This is a completely different market than 2005-6 when inventory levels were less than half of the current numbers of homes for sale. As we have said often on this Blog, pricing is the key to selling a home. If you price your property correctly (based on current market conditions) it will sell quickly. By quickly, we mean in 90 days or less.

To illustrate this point, I searched the MLS for a property that had been on the market for a while and finally sold after the price was reduced. I will withhold the property address because my intent is not to embarrass anyone or draw attention to a particular home. My intent is to show the change of events related to pricing that took place on this actual property to show how a home gets from original list price to SOLD in this market.

Our subject property came on the market in March of 2007 for $347,500. Five months later, the price was dropped to $340,900 and then shortly afterwards dropped again to $319,900. Historically, it is important to note that August of 07 was when the market hit the skids due to fears of the credit crisis.

In December of 07 the property was taken off the market and was re-listed in February 08 for $315,900. In March 08, the price dropped to $294,900 and sold in a few days for $293,000.

That’s a year on the market and a price change of a bit over $50,000. Now, here’s the point - the market determines the price and the market changes over time. Sometimes the market moves quickly like in 2005 when prices soared, or in 2007 when they declined frantically. Sometimes it moves slower, but it is always moving and changing based on the economy, the demand for housing, and the supply of homes for sale.

So what would have happened if the example property I used in this post was originally priced at $310,000? Would it have sold quickly in the March 07 market and netted the sellers $17,000 more and saved them a year? Would it have sold just as quickly if it was priced at $320,000? We’ll never know, but properly pricing a home – based on CURRENT market conditions - is critical to success.

Of the 1128 homes that have sold this year (thru May), 272 sold in 30 days or less. Let’s say these homes were priced “aggressively.� 223 of the homes that sold this year were on the market between 31 and 90 days. Let’s say these homes were “realistically� priced. 112 of the sold properties were on the market from 91 to 120 – call them “wishfully� priced. Finally, 521 properties took longer than 120 days to be absorbed into the market – let’s say “unrealistically� priced (at least originally).

Every property, no matter what condition or location, has a price at which it will sell. Okay, maybe there is a home somewhere that has severe termite damage and has been condemned by the EPA that would not sell at any price, but most have a magic price. You can think of the sale of a home as a three-legged stool. The legs are price, condition, and location. For you math majors, how about an equation such as condition + location = price. If your home is not selling, maybe your stool is lopsided or your equation doesn’t add up. Since it is not realistic to change the location, you either need to change the condition, or the price. Talk to your REALTOR® and listen to his/her advice no matter how hard it is to swallow.

As we have repeated said all year, price your house to sell based on today’s realities, or do us all a favor and take it off the market.

CAAR has a partnership with NBC29.com to work together to add helpful content to the Homeplace section on the NBC site. Here are the two latest podcast about credit scores and downpayment assistance. In addition, the Real Estate Weekly articles are on Homeplace every week. We have been in this partnership for about a year. NBC promotes CAAR and the Real Estate Weekly on-air in various promotions and supports many CAAR events like the Workforce Housing Concert and the Affordable Again campaign. Great people make great partners and we are very fortunate to work with the fine folks at NBC.

Here is a sample of the Podcasts we have recorded:

Good Credit Podcast

Downpayment Assistance Podcast

POST NOTE:  Congrats to NBC29.com for winning the News Station Web Site of the Year.  Rob Davis is the MAN!!!!

It may surprise many folks to see the chart below.  I’m sure anyone who listens to the national media or reads a bubble blog believes that sellers are being forced to take 20% less than their offering price.  True, the number is down, but sellers are still getting over 94% of what they are asking.

Sellers, before you jump for joy, you should understand that this chart only reflects properties that SOLD.  This does not mean that sellers can expect to get 94% of what the property is currently listed for.  If you have had trouble selling, or if all you’ve gotten is a lowball offer, it is probably time to talk with your REALTOR® about a price reduction.  Every property is different, so be careful not to get caught in the one-size-fits-all thinking trap.  This chart may not have any relevance to your property or your price.  The market is complicated, so make sure you listen to your REALTOR’S® advice.

The easy answer is “depends.� No, not the adult diapers…rather, it depends on the deal you get and how easy it will be to rent the property. Before I explore the issue, let’s define what I mean by “invest.� By invest, I mean purchase a property that you plan to rent to tenants. Ideally, the rent paid by the tenants would cover the mortgage and provide a little bit of extra to cover maintenance and improvement. Here’s a good article current issues in the real estate investment paradigm.

There are some good deals in the local market, but not every property is being offered at a good price. During the super heated market of just a few years ago, investors did not care about getting a good deal because the mistakenly believed prices would continue to go up 20% a year. They paid top dollar and the rental income did NOT even cover the mortgage. Yikes! Call me old fashion, or simply chicken, but I would not have the guts to “invest� in real estate with a negative cash flow.

I did buy an investment property in 2003 (before the boom) that offered a positive cash flow. The good news is I sold it in 2006 at the top of the market. Before you conclude I am some sort of a genius that knows how to time the market, I must confess; it was in another market (which I knew little about) and I only sold because my daughter (one of the tenants) graduated and moved away. I was dumb lucky with timing the market, but I was smart about the original investment.

Investing in the Charlottesville market is easy to understand, but hard to execute. Finding a “good deal� on the right property is difficult, but possible. Renting the property is also tricky in this market, but can be done. It would be wise to consult a REALTOR® who specializes in rentals to understand that part of the market before you purchase. Knowing what locations and property sizes are in demand for renters can help you make a better buying decision.

All markets have opportunities and the current market actually has many “good deals.� Unfortunately, the bargain properties are hidden among a sea of inventory, many of which are over-priced. Investors do not have it easy right now, but with discipline and a good REALTOR®, you can find solid investment properties in our area. Right now, that beats sinking money in the stock market.

Little help, please!  I’m working on an article documenting the top 50 things we enjoy about living in the Hook.  This will not be a scientific process – more of a benevolent dictatorship – but I will be looking for things that are unique to our area.  Here’s what I have so far, so please leave a comment with other ideas…

1. Monticello
2. Bodo’s
3. The Corner
4. Downtown Mall
5. Fridays After Five
6. UVA Sports
7. Carter’s Mountain
8. The Book Festival
9. Bama Works
10. Local Celebrities (Grisham, Long, Matthews, etc.)
11. Skyline Drive
12. Paramount Theater, JPJ and the Pavilion
13. Great local musical talent
14. Charlottesville Tomorrow
15. MACCA’s Men Who Cook
16. Piedmont Housing Alliance
17. The Lawn and the Rotunda
18. Charlottesville Airport (CHO)
19. Spudnuts
20. Star Hill Brewery
21. Crozet Pizza
22. Pegasus
23. Hot Air Balloons
24. Ash Lawn
25. The White Spot (Home of the Gus Burger)
26. Foxfield Races
27. 4^th of July In McIntire Park
28. Dogwood Festival
29. Local Winery Tours
30. Charlottesville Albemarle Community Foundation
31. NGIC – National Ground Intelligence Center
32. Rivanna Trails
33. CARS – Charlottesville Albemarle Rescue Squad
34. Arch’s
35. Christian’s Pizza
36. The Charlottesville Radio Group

Okay, that is the low-hanging fruit I came up with off the top of my head, but I’ve only been here 10 years.  I know I’m missing some good stuff, so please help.

Last night I attended a transportation forum sponsored by Delegate David Toscano.  I was hoping to hear something new in the never-ending debate on transportation funding.  Instead, all I heard was the same old song and dance that we have heard for years.  Here’s a quick summary:

VDOT Representative – We are changing our ways, but there is no money…
Trip Pollard, III from the Southern Environmental Law Center – We can’t pave our way out of this mess.
Dennis Rooker, Albemarle Supervisor – The state is cutting our funds, so we can’t afford new roads.
Harrison Rue, TJPDC – we just need to do a few more expensive studies and hire more consultants to figure this out – okay, he did not really say that.  What he really said was the answer is connecting roads through neighborhoods, but he left out the part about the neighborhoods really hating this idea.
Meredith Richards – Commuter trains are cheaper than roads.

The funny thing is that all of these statements were as true last night as they were 5 years ago.  Nothing has changed and we are spiraling down a deep hole that will be increasingly hard to dig out of the farther we descend.  Will it take a bridge falling down and killing a bunch of folks before we start taking better care of our infrastructure?  Will it take total gridlock before we fund more new road building?  Will gas have to go to $12 a gallon before we decide to carpool or take the bus? 

What I did not hear last night was what the general assembly is going to do about this mess.  They control the purse-strings, both locally and statewide, so they are the ones who have allowed us to get into this mess.  I must confess that I came late and left early, so I may have missed Delegate Toscano’s ideas.  David is not the problem here and I actually appreciate his efforts to pull this forum together.  Unfortunately, I saw no value in the time I spent attending. 

I do not care how this issue is fixed, but the “solution� the Assembly came up with last year was a joke and was intended as a sound bite for the elections.  We need a real solution and we need it yesterday.  I have very little faith in the Assembly coming up with a fix or even adopting the Governor’s plan.  The politics are too tough on this issue to expect real results.

Oh well.  At least I will have plenty to write (read “whine�) about for many years to come.  Here are some past classic rants on transportation that stand the test of time.

Parkway Opponents Cost Us BIG $$
Girlymen Don’t Raise Taxes
NIMBY’s on Parade

Here are a couple of great articles form Bloodhoundblog.com on national real estate web sites that are good reading for both REALTORS and the public.

Horizonal Home Searching

Why National Real Estate Listing Sites Suck

Sorry about the harsh title, but the article is very good.

CAAR’s Technology Group is debating this very issue right now and trying to decide what the best course of action is for distribution of listing data.  It is a complicated issue, so stay tuned.

Is this really a Blog if it does not allow comments?  I’m thinking “no,” or at least it is not credible if the writer(s) is not willing to open the issues up for debate.  With that said, I still like this site - http://realcville.blogspot.com - because it raises a lot of good questions about homes, ah…I mean… “houses” that need to be discussed.  Unfortunately a one-sided conversation is too easily drawn into propaganda.

Here is an example of a post that quotes my article in the latest issue of the Real Estate Weekly that I posted in advance on this Blog.  Since I could not respond to this post on the proper Blog, I’ll post my comment here.

Comment:

You raise some very good points and have a fresh perspective that we should all hear.  From a casual glance at the property you picture in this post, I would agree that it would be a struggle to pay $189,000 for it.  I have not visited this property, but I did notice that it has a third of an acre of land.  That is actually a large lot for the city.  If this land is in a good location, it could be a property someone would buy, tear the existing building down, and build a large home.  This is a trend that is really big in major metro areas and places like Fairfax are actually reforming their building codes to limit the size of the property based on the amount of land.  There has been a highly publicized case here in the Hook about this type of situation.  People want to live in the city and there are few lots available.  I’m sure the house you picture is not worth that price, but the land under it could be worth between $100,000 and $150,000. 

As to the use of the word “home” instead of “house,” you are probably correct.  But in today’s market, you should be a buyer if you are looking for a home and maybe NOT if you are looking for a house.  In other words, this is a great time to buy if your life is telling you it is time to buy a new home (upgrade, downsize, etc.).  This is NOT a great time to buy if you are looking at a property as a commodity.  Unless you are planning to stay put for 3 to 5 years (minimum), this may not be the best time to buy.

Welcome to Charlottesville’s Blogisphere and thanks for adding to the conversation. 

I travel Interstate 64 between Charlottesville and Richmond at least once a month.  It is a fairly lightly traveled highway (compared to 95 and 81), so it is justifiably only two lanes wide in either direction.  It is also a fairly boring drive because the scenery does not change for 50 miles.  The road is straight, flat, and requires a stop at Starbucks before you brave the monotony. 
The lack of interesting scenery or road challenges allows my mind to wander and think up Blog posts like this one.  On a recent trek back from Richmond, I experienced a common source of frustration – a legitimate pet peeve of mine – when I found myself going 5 miles UNDER the speed limit while driving in the “fast lane.�  As you can guess, there was an otherwise “normal� person merrily cruising down the left lane and ignoring the signs that say “Slower Traffic Keep Right.�  Cars had stacked up behind this slowpoke as they attempted to negotiate passing the vehicle on the right.