February 2021- Micro Heated Growing Intangibles
It's Winter; The Charlottesville Market Has Heated Up
The weather has been so icy and snowy that I have no outdoor riding pictures. And no one wants to see pictures from the trainer.
The Charlottesville - Albemarle market in a nutshell.
Keep in mind that this is for a large part of the market, and your micro market will vary.
I showed three houses last weekend; those sellers received 8, 11, 8 offers respectively.
A buyer client didn’t get to see a house that was supposed to be available for showings in three days because a buyer made an offer (IMHO, unwisely) sight unseen, over asking, waiving the inspection contingency.
We went from low inventory and high demand to very low inventory and very high demand.
Paraphrasing one of my clients who made an offer more than 10% over asking (and still lost because of an intangible), “Where is the line between a competitive offer and an absurd one?”
This podcast we did for Nest’s Sweat the Details, is a must-listen to learn more about the housing crisis. (This is one of the best ones we’ve done)
From a personal/professional note - it is exhausting to write offers for buyers who desperately want to buy homes, who should be able to afford homes, only to be one of a half dozen offers. This market will shift, and in about 18 months I’ll be able to accurately answer the questions, “How’s the 2021 market?”
Keep in mind that people continue to move to the Charlottesville area and we’re not yet able to build sufficient homes to accommodate that demand. New home prices are through the roof due to material and labor costs, as well as simple supply and demand. Thus, those homes under $500K will continue to appreciate (probably) so long as the economy stays strong, and interest rates are low.
Below are two houses that recently under contract; the first probably went for closer to $500K and the second went for over asking.
I asked an agent I respect greatly who’s been around for a lot longer than I have if he’s seen anything like this, and he said, “no; never like this.” I had an agent ask me if 2005-2006 was like this, and my answer was that this market is exponentially worse (from a buyer’s perspective) than then.
Next month: is this market driven by fundamentals, or a bubble? I’m already halfway through this segment for the March Note; there is so much going on, and so much to say.
Micro Markets - Which One?
I’m skipping this segment this month because the velocity of our market will render any analysis irrelevant. That said, I’m open to suggestions if you want me to analyze a particular market segment or neighborhood next month.
A client texted me the photo below asking if I recommended luxury vinyl tile. Short answer: Absolutely.
The picture is from when the Quest (polybutylene) plumbing blew. Luckily, we talked about it when they bought the home several years ago. When I offered my apologies, she responded, “It’s all good- I knew it was bound to happen sooner or later - just glad I was home and caught it within 2 minutes.”
2 minutes. I bring up Quest whenever I see it in a house, and now I have another horror story to share with my clients. I also have a replumber who will replumb the house for ~$6K; ask me if you’re interested.
I’m looking forward to warmer weather so we can get back out on the trails, and so I can get off the trainer and onto the roads!
The Story About the Agent Who Didn’t Like the Buyer and Took Another Offer
Lifetimes ago, I represented a seller who was fortunate enough to receive multiple offers on his property. Somehow, one of the buyers communicated to me that she wanted me to convey to my client who she was, in an attempt to create a personal connection to make her offer more enticing.
We had multiple offers. In evaluating each one with my client, I mentioned that that buyer knew him and she wanted me to let him know. I’ll never forget how he said, “Oh, she’s the buyer? I can’t stand her.” And proceeded to take an offer for less money.
Jim, You Growed us Up!
One of the joys I get when representing buyers is helping them make consequential life decisions.
I love working with first time-homebuyers. Helping them to start a new path together is fun and rewarding. There’s a lot to learn and a lot to decide together.
At the final walk-through once, one of my clients jokingly and happily said, “Jim, you growed us up!” And she meant it. They’re still there, and still happy in their home.
Answering the “What are the Best Schools” Question
What are the “best” schools? THat isa question that I don’tanswer and my clients all understand this.
My answer has evolved to a combination of what I used to say, which is that “best” depends on what that means to you, your family, and your kid. Now, I explicitly address race, saying that my profession was instrumental in segregation and that we no longer want to be part of perpetuating homogenous schools.
My kids’ best is going to be different than your kids’ best, which is different than someone else’s best.
What I’m Reading
Regrets after rushing to buy a house during Covid. (I saved a PDF; if this link doesn’t work, ask me and I’ll send it to you.)
A dog and a bone; our real estate market can be like this.
What I’m Listening - (Suggestions Welcomed)
Jim Duncan, Nest Realty, 126 Garrett Street Suite D, Charlottesville, VA 22902. Licensed real estate agent in Commonwealth of VA.