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Ginter Park and Ginter Place

March 28, 2013 By Rick Jarvis

ginter condo_optI really have become a fan of Ginter Park.

In April of 2012, we were asked to take over the lead sales of the Ginter Place project (the old Richmond Memorial Hospital Complex) along Westwood Avenue.  The hospital complex abuts both the Laburnum House and the Baptist Theological Seminary Campus at the corner of Westwood Avenue and Brook Road.  The Union Theological Seminary is also within sight of the east side of the condo tower which really helps frame the views…especially from the upper floors.

GP logo{ Click Here for Condos For Sale at Ginter Place }

In 2003 (or so), a group of investors purchased the entire site when Richmond Memorial moved to Midlothian.  It was a large undertaking, to say the least.

GP Overhead

After a rather contentious period of negotiations with the Ginter Park Neighborhood Association, the first phase of the project, the condominiums in the old hospital complex, went live in early 2008.  As history has shown, 2008 was not kind to ANY housing project, much less an upscale condo project targeting downsizing buyers.  Needless to say, it fell flat.  While the reasons are many, it is safe to assume that even the best conceived and executed projects brought to market in 2008 would have experienced similar outcomes.

ginter street scape
Ginter Park’s pedestrian-friendly nature means a casual stroll may not lead to anywhere in particular but enjoyment along the way.

Fast forward to 2013 and the environment has changed.  Lending, sales, inventory and overall public perception of the market has turned from thoroughly negative to fairly positive and the real strengths of both the project and the neighborhood are emerging.  The condos are large and well appointed with an excess of both features and finishes in excess of all competitive products.

They have begun to sell quite well.

I find it interesting that while Ginter Place has begun to experience the sales success that it should have experienced had 2008-2012 not occurred, it is still under most of the Realtor’s (and their client’s) radar.  I think that Ginter Park, and to much the same extent, Bellevue, are still largely misunderstood by much of Richmond…and that is truly unfortunate.  Despite some of the most powerful architecture of the era and with a diversity in design unseen in Richmond, the homes of Ginter Park and Bellevue trade at a discount to many other comparable neighborhoods.  While the reasons for the value bias are as diverse as the design of the homes there, probably the biggest reason is that the large majority of the market does not truly understand the area.  The many neighborhoods that comprise North Richmond are misunderstood mostly because the subtleties that drive values are not apparent to those not engaged in figuring them out.

{ Click Here for Homes for Sale in Ginter Park and Bellevue }

ginter park
The homes along Seminary Avenue rival those along any stretch in Richmond.

Without a doubt, my favorite part of Ginter Park is the architecture.  While the interior layouts of the homes can be a little antiquated with smaller closets and less ‘open concept,’ the exterior presence of the homes in Ginter Park are as striking as any in Richmond.  Despite a relatively tight time period for construction, the diversity of architecture is stunning.  Cottages, Bungalows, ‘Four Squares,’ Arts and Crafts and Tudors with brick, stucco and different sidings all can be found.  Even the relatively benign colonial designs are more engaging due to side porches and larger, manicured yards.  For those that wish to see some of Richmond’s finest homes, a leisurely drive up Seminary Avenue will result in some jaw-dropping residential design unrivaled in the Metro.

Ginter Park deserves to be understood better than it currently is and we hope that the brokerage community invests the time required to truly understand the power of the neighborhood.

 

 

What Does A Buyer’s Agent Do?

March 22, 2013 By Rick Jarvis

representA buyer’s agent works for YOU when you buy a home.

When we say ‘works for YOU‘ we mean that it is YOUR interests that are the primary focus. While all agents are supposed to be on their best behavior when it comes to no lying, cheating or stealing, the difference between a BUYER’S Agent and a SELLER’S Agent is whose pocketbook is being looked after.

A BUYER’S Agent’s sworn goal is to help you pay as little for a home as possible. A SELLER’S Agent is trying to get you to pay as much for the home as possible (to the benefit of the seller, obviously.)

But how can this be so? A house is worth what a house is worth, correct?

It really depends.

The comparable sales that are shown to buyers and/or interpreted for them can be made to illustrate vastly different values. Comparing a home to others which have varying degrees of applicability can yield radically different (yet TOTALLY believable) results and it is the job of your advocate to understand this.

I would rather save the commission…

Doesn’t really work that way.  The listing agreement is between the seller and their agent, not between you and the agent.  Odds are, you are getting no representation and the agent is getting the entire commission.  They would LOVE to help you, obviously.

I don’t want to tie myself to any one agent…

Then in essence you are tying yourself to every other agent you meet.  If the LISTING Agent thinks you are not working with a BUYER’S Agent, then you will get their full force sales pitch on both why their home is best and why you should use them as the agent.  Once they know you have chosen a BUYER’S Agent, the dynamic changes as they know they are dealing with an informed consumer that has an advocate.  Facts are forthcoming and the constant sales pitch ends.

Don’t Trulia and Zillow show sales?

Trulia and Zillow can be described as ‘helpful’ at best and ‘wrong’ at worst. In effect, a computer located in San Francisco and/or Seattle is telling you the value of property in Richmond.

Would I use them IN my analysis?  Sure.
Would I use them AS my analysis?  No.

By their own admission, only 90% of the value estimates fall with 10% of the actual value.  Stated differently, only about 90% of the time, these sites can tell you that a $400,000 home is worth between $360,000 and $440,000…and 10% of the time, they cannot even get that close.  And it sure would be nice if they told you which ones were the really bad estimates…

But I get an appraisal, right?

Sure, but the appraiser knows the sales price going in and in most cases, the goal is simply to justify the sales price to the lender. If the appraiser had no idea as to the contract price prior to the appraisal, it would have more value and thanks to the Dodd-Frank legislation, lenders have little control over who is doing the appraisal.  Do you really think it is a good practice to have a Goochland Appraiser valuing properties in Church Hill?  It happens all of the time.

So you are telling me that Realtors determine price?

Far from it.

Realtors, much in the same way as appraisers, look to the comparable sales to help EVALUATE the price of a potential home, but ultimately, the market sets the price and it is the agents job to help you interpret all of the data.  Where an appraiser is trying to justify the value of a home at a specific point in time, they have no obligation to communicate to you the factors at work that can impact values in the future.  Understand that your agent has seen the same inventory and seen your reaction to it.  They understand your motivations (or at least they should) and they know your goals.  Most importantly, a good agent will help you to understand the things that drive value in your marketplace.

So how do we find a good Buyer’s Agent?

The key to understanding a GOOD Buyer’s Agent is to interview them. Ask about their background and how they help interpret values. Find out how they see the world and if their style matches yours.

  • Can they compute an absorption rate?
  • Can they band $/SF?
  • Do they recognize different builder’s signature styles?
  • Do they understand development momentum?
  • Do they know inventory levels?
  • Can they communicate the underlying market dynamics?

Invest a few minutes in an interview and see just how capable your agent is. Compare them to others and see if the advocate you have is the right one for you.

 

Flipping Houses in a Static Market

March 13, 2013 By Rick Jarvis

flippingAs we find 2010/11 a smaller and smaller object in the rear view mirror, the real estate world appears to be returning to some sort of normalcy.  The number of foreclosed properties is down as is the number of short sales. As you can see below, the number of REO Properties (Bank Owned), while still available in numbers above the levels before the adjustment, are still down considerably from darkest days of 2010 and 11.

The impact of this is twofold.

First, the opportunity to find cheap homes is far lower now than even 2 years ago.  Foreclosed properties (a list can be found here) have always provided the ‘flipping’ community with ample numbers of homes to purchase, at discounts, to be fixed up and resold.  While several lending rules were put in place to discourage the abuse of the system (which in reality, was another poor policy that prolonged the slump), there were still those that found homes cheaply enough to purchase and renovate despite a still declining market.

The number of cheap homes (and by cheap, I mean priced artificially low for quick sale) in the market are largely gone.  As we move into 2013, the collective inventory of homes for sale, both REO and non-REO, are approaching critically low levels.  Many neighborhoods, especially those mature urban neighborhoods with higher values, are off by 70-80% of their traditional available supplies (see the chart below of inventory levels in 23221 zip code)

 

Secondly, the removal of the large swath of foreclosures from the marketplace means that we should begin to see some slight improvement to the collective market values of homes across the US.  These slight increases will be stronger in some places than others (see the Back to the Future Series) as the the lack of available inventory drives prices higher.  Any market whose property values are increasing is obviously a great thing for ‘Flippers’ as the assets they own are increasing in value during their hold period.

So what does this mean?

It means that prices are heading higher until we size supply correctly and that it will be harder to find homes to flip.  It also means that the community of ‘Flippers’ will need to look elsewhere for opportunity.  Homes with unfinished spaces that can be completed for a reasonable cost and are located within neighborhoods that support the additional value will be an avenue to find opportunity.  The other will be to find homes in need of additions.  The 3 bedroom 1 bath colonials or cape cod styled homes in many of the neighborhoods built during the 1920-1940’s are one area.  Smaller Fan and Museum District homes are also good targets.

The days of the easy ‘Flip’ are somewhat over and in order to continue to make money as a ‘Flipper’ one must become increasingly skilled as a contractor.

Back to the Future – Midlothian

March 3, 2013 By Rick Jarvis

back to the futureA few weeks back, one of the agents in our office called me during negotiations on a home in the West End. The owner of the property had purchased the home in 2006 and the question was asked, ‘How do we stand compared to 2006?’

It spawned this totally informal study.

This is the second installment in the series on pricing levels throughout Richmond.  This article will focus on Midlothian (the first installment discussed The Fan District pricing.)

So here goes…

Where Do Midlothian Property Values Stand in 2013?

For this exercise, we are using more of an ‘Old School’ definition of Midlothian by using a combination of Zone 64 and Zip 23113 to form the boundaries in the study. The newer definition of Midlothian encompasses much of the area between Midlothian Turnpike and Hull Street (MLS Zone 62.)  We will examine that area in a future installment as the number of new homes there is greater than almost any other area of Richmond.

The area being discussed in this analysis is comprised of many of Chesterfield’s most valuable residential areas.  Neighborhoods such as Salisbury, Tarrington, Founder’s Bridge, Oak Park and the neighborhoods along Cherokee/Old Gun are also a part of the data.  Charter Colony, Hallsley, The Grove and neighborhoods south of Route 60 are not part of the data.

So what does Case Shiller say?case shiller

 

The chart above is the gold standard for home pricing.  The Case Shiller Index measures both the Top 10 and Top 20 largest metro markets in the US and tracks both the prices of the homes as well as the appreciation rates in each market. It should be noted that Richmond is NOT one of the cities in the index (the two geographically closest markets that are measured are Washington DC and Charlotte NC, in case you were wondering…) It is also worth noting that the CS Index measures home pricing and not the Price Per SF.  When the market soared, many large homes were built that skewed the appreciation and depreciation within each market.  Secondarily, some of the largest price increases occurred in markets that became the most overbuilt, also skewing down the average.

According to Case Shiller’s latest press release, as of December 2012, the pricing for homes nationally had returned to 2003/4 levels.

According to CVRMLS (our Multiple Listing Service), the Midlothian area (as defined at MLS 64/23113) yielded the following ‘Per Foot’ pricing in 12 month increments beginning in 2005.

  • 2005 – $143/SF
  • 2006 – $154/SF
  • 2007 – $154/SF
  • 2008 – $141/SF
  • 2009 – $135/SF
  • 2010 – $127/SF
  • 2011 – $124/SF
  • 2012 – $122/SF

The data suggests that the pricing in the NW Quadrant of Chesterfield is probably consistent with the national average.  While the peaks and valleys in the Midlo market mirror the national peaks valleys in terms of time, the level of decline was not as severe (by 5-7%).

Midlothian, compared to The Fan, is lagging.  However, the Fan District is less seasonal than the suburban marketplace.  With the spring market around the corner, the 2013 market in places like Midlo, with its top notch public schools, strategic Chesterfield location and relatively smaller number of new homes and lots to be absorbed, should be in for some level of recovery as we move through the year.  The number of homes sold in 2012 was greater than both 2011 and 2010, which is a positive sign and the inventory levels are also as low as in recent memory.

Midlothian is still in stuck 2003, but expect a 2-3 year jump forward soon.

Next up, Ginter Park and Bellevue…

Is It the Right Time to SELL a Home?

February 21, 2013 By Rick Jarvis

sell
While selling housing is not the same as trading frozen orange juice, if you have a quality property, it can almost feel this way.

Google shows almost 14 Billion* results for the following search “Is it a good time to buy a house 2013”

Google shows only 2.6 Billion* results for the following search “Is it a good time to SELL a house 2013”

Really?

Is it 6x better to buy than sell?  Doubtful.

Is there 6x the selection available?  Hardly.

Is the interest rate 6x lower than it used to be?  Not really…we were around 6.5 to 7 before the market went ‘boom’ in 2008.

[ For a list of the markets that are most undersupplied, click here, here, here, here, here and here ] 

Why are there 6 times more articles about buying than selling?

I think it can be framed in this manner – it is far harder to sell than it is to buy and the messages that you have to deliver to the sellers are far harder than the ones you have to deliver to the buyers so agents continue to offer advice to the buyers of the world…it is just easier.

Here is what the sellers are up against:

  • Sellers, in many cases, are still fighting the collective leverage (mortgage debt) placed against properties as late at 2007
  • Sellers, in many cases, are reluctant to lock in losses (human nature)
  • Sellers, in many cases, are left with no down payment after payment of commissions and other expenses
  • Sellers, in many cases, are the ones who bear appraisal risk (and this is a significant issue)
  • Sellers, in many cases, are the ones who bear the timing (OMG!  Where am I going to go if I sell quickly???)

These are all legitimate and powerful concerns but they can be navigated.

To the sellers of the world, I offer the following advice – you are not in the position that CNN and Yahoo tell you that you are or that agents want you to believe.

  • The fact that Realtors are screaming 6 times as much about buying than they are about selling is driving people to your door step
  • The fact that inventory in the good markets has declined by 60-70% in many cases means you have far more leverage than you think you do
  • The fact that the last 4 deals I have personally been involved in have resulted in multiple offers means you have options

The same factors that drove the market to dizzying heights and unfathomable lows within a 36 months has largely played out and the market is within 5-7% of its pre-bubble trend line.  Our path from 1990 to 2003 with minor adjustments for economic factors puts us on a value path that is not too far from where we are now.

What does that mean?  We are in a normal market.

Here are the basic scenarios:

  • If you are a seller of a quality property in an undersupplied mature neighborhood, you are fine.  Price with ‘reasonable aggression’ but be mindful of comparable sales if you are likely to be purchased by a debt buyer.  Use the higher comps in your market and/or the PENDING properties as the best pricing guide.
  • If you are a seller of a quality property in a balanced neighborhood, then spend some time on the absorption rate (ask your real estate professional with help on this) to get a feel for timing.  Balanced markets with good school districts will largely follow statistical trends in terms of Days on Market and Ask/Sold price ratios.  Comparable sales are important in your analysis.  Use comparable SALES as the guide.
  • If you are a seller of a challenged property or in an oversupplied market, it could take a while.  Be very conservative in your pricing and price near the comparable lows in your market.

If you are thinking about selling but are unsure, then seek competent advice.

Obviously, we would be happy to help…

(* the numbers of searches that match the terms may bounce around a bit for a variety of factors)

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I am Kendall C. Kendall, Client Care Coordinator for the team. I am a licensed Realtor and it is my job to answer questions and schedule showings for the properties shown on our sites. Here's our call policy.

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Assessments, Appraisals and Zestimates

Why is the assessment so high (or low)? Why does Zillow say my house is worth so little (or so much)? Is that the same as my home's Market Value? And why is the appraisal different from the assessment? It can be confusing to say the least. Agents are asked a version of this question with …

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