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One South

Sharing as a Strategy

October 31, 2015 By Rick Jarvis

2015 was a really great year for us.

From Humble Beginnings

When One South opened our doors in 2008, we were a mere 5 agents, supported by 1 dedicated staff member, in a orange -ish colored building on the edge of VCU (we decided it was the color of Velveeta.)  We were nothing more than equal parts blind ambition, blissful naivety and a cool logo.

1435 W Main St
The original One South World HQ located at 1435 W Main Street on the western edge of VCU … love that color!

We Are Growing Up in a Hurry

Fast forward today and we are 60 agents and staff in our new historic office renovation and with a satellite office at the Chesapeake Bay. In the last 2 years alone, we have nearly doubled in both size and volume. Imagine the little marks you make on a door frame to mark you child’s growth … and seeing them double in 24 months! Well, that is pretty much what we did.

But while sales statistics are neat, they are simply the measurement of getting more things right than you get wrong. And several years ago we decided to adopt a stance that I feel has been the main reason we have been not only able to grow, but to grow the right way with a great group of people.

Sharing as a Strategy

About 5 years ago, we made a decision to become a company that shares.

For as long as I could remember, Realtors (and their brokerages) hoarded information. MLS, our own database, was effectively behind a locked door and only the agents held the key. We doled out information, piecemeal, in order to protect our own existence. As long as we governed access, we would be in need, or so said the prevailing wisdom.

But this little invention called the internet changed the game for everyone involved – buyers, sellers AND agents. What we had for years, seen as proprietary information, Trulia and Zillow began to offer completely for free. Needless to say, it has changed the public’s relationship with us and our relationship with them. This disruption forced everyone in our industry to find another way to add value to the process short of acting as taxi service and opening doors. We had to step up our game and really make a difference.

Write It Down

So what did we elect to do? We simply decided to write down everything we knew. We wrote about neighborhoods. We wrote about valuation. We wrote about pitfalls and best practices and we wrote about techniques. We wrote about local issues and we wrote about national ones.  We decided that offering what we knew to the public allowed them to research us and see who we were, what we knew and most importantly, how we could help them make a better decision. We made the conscious decision to place our collective knowledge in the public domain for all to see. And you know what, we are glad we did.

You see, having information and knowing what it means are two different things. When you can demonstrate the value you bring to the process through offering your analysis, education and interpretation publicly, people recognize the important role you play. Hoarding information and keeping your analysis to yourself may have worked in 1990 … but it not a winning strategy any more.

2016 and Beyond

Know that as we close out 2015 and head into 2016, we plan on doing more of the same. We will continue to write short bits, philosophical articles and some extremely long exploratory looks at some of the complex topics that require a great deal of effort to break down properly.

Thanks for somehow being connected to One South. We hope to continue to serve you for quite some time.

Renewing Old Urbanism

September 25, 2015 By Rick Jarvis

Walking is a foundation of new urbanism. But you know what, walking has always been the foundation of old urbanism.

Urban Renewal and Richmond

As the development momentum of Richmond gained steam in the late 1990’s and into the 2000’s, the planners at City Hall began to mandate that the developers adopt a mixed-use model for their projects. Dedicating spaces along the street for commercial uses (instead of residential ones) became the requirement. It was not exactly embraced by the development community as commercial office and retail was harder to lease than the residential spaces.

decatur living room
The Decatur project in Manchester is about as amazing of a space as there is in Richmond. The project consists of three residential condos and one commercial one.

Why? Demand for residential space far exceeded the demand for urban commercial spaces, especially during the years following the crash of 2008. For several years, vacancy in the street level commercial spaces was extremely high and developers fought to build a little as possible as it was not only hard to lease but hard to keep leased.

The Impact of Mixed-Use Today

Was street-level commercial the correct development model for Richmond? While the mandate to build commercial spaces during the recession was met with resistance, it seems to now be paying dividends. Far more start-ups, pop-ups, cafes, restaurants and galleries have begun to fill these spaces and is creating the vibrant street life that RVA lacked for decades.

Given time and a better economy, mixed-use seems to have been the right path.

The Quirk Hotel, opened in September of 2015, is yet another transformative project in Richmond's historic Downtown.
The stunning Quirk Hotel, opened in September of 2015 by Ted and Katie Ukrop, is yet another transformative project helping redefine Richmond’s historic Broad Street corridor.

So Why Mixed-Use?

In theory, placing commerce spaces in proximity to living spaces reduces the need for automobiles and fosters a neighborhood’s micro-economy. When done right, neighborhoods to develop their own ecosystem and move towards a harmonious balance of live-work. So when there’s a deli downstairs, right next to the dry cleaner and down the block from a wine store, people don’t have to jump into the car so much to get stuff done … and the idea of supporting the local shopkeeper is, on its own, a cool thing, too.

So is it Time to Lease or Buy?

And yes, we are still in recovery from the crisis of 2008-11, but it is far better than the darkest days. There’s still an excess of retail space in some zones, but nearly not at the same levels as just a few years prior.

Huntt's Row is a series of 8 townhouses in the Fan District that will be coming on line in the late Spring of 2016
Huntt’s Row is a series of 8 townhouses in the Fan District that will be coming on line in the late Spring of 2016. Click the image to learn more.

Potential office/retail lessees/purchasers are still in a pretty good position right now, but free rent and below market build-outs are far less common than before. And where tenants of 2010 used to find 10 -15 great options, tenants today now only find a handful. Same with the buyers.

One South's new office was built in the bones of a historic warehouse in the Fan District. Did I mention we won an award for it?
One South’s new office was built in the bones of a historic warehouse in the Fan District. Did I mention we won an award for it?

Residentially, from the Fan and Museum District to Jackson Ward, Shockoe, and Manchester, many areas are again seeing pricing at or above the 2007 peak … and if 2016’s spring is anything like the last two, it will go even higher. Inventory is still down and rates are still at or near historic lows.

Downtown and Bikes

Personally, I loved the energy from the bike race.

bike race
This photo was taken from in front of Lift Cafe along Broad Street. The level of energy and life brought by the race from Richmonder’s and non-Richmonders alike was unlike anything I had ever experienced.

While different perspectives exist as to its importance and its impact, there is no doubt that the UCI Championships gave incredible exposure to the city and placed it in an extremely positive light. Hopefully, not just the international community walked away with a positive feeling about Richmond, but so did many of Richmond’s own non-believers.  The Downtown that many remember as ignored, blighted and lifeless is now quite the opposite. I think the 600k people that attended can attest to that fact.

A Great Environment

Give the idea of investing in Richmond, either residentially or commercially (or BOTH!), serious consideration.

These prime conditions should help illuminate an oft-ignored consideration in the purchase decision matrix: investing in interesting space in a vibrant and emerging neighborhood helps attract and retain talent for the business you’re starting or expanding. And better personnel translates into a fatter bottom line.

Most understand the value of owing housing but don’t ignore the possibility of owning your own business space. You’ve already taken the leap of starting a business. Doubling down with real estate might be the best bet you could make.

A Chef, A Greenskeeper and a Realtor Walk into a Bar …

September 14, 2015 By Rick Jarvis

‘Why do we need a Realtor?’

In my early years, I used to get offended by that question. Probably the main reason was that I didn’t really have a good answer. Uhhh … contract … MLS …. Lockbox … you need us!

 

But as I have aged in this industry, I actually have come to enjoy being asked the question. Why? Because it gives me a chance to educate the clients as to our role and the value we add.

I can cook, but I am no chef…

Sometime in the late 1990’s, as a thank you gift from a client, a personal chef came to our house and cooked a meal for us. It was the first time I met Ellie Basch.

The fig an Prosciutto salad rocks. And her seared tuna is always worth the price of admission.
Ellie’s fig and Prosciutto salad rocks. And her seared tuna is always worth the price of admission.

Now, for those who have ever been on the receiving end of a Jarvis-prepared feast, we are pretty good cooks. I am not saying we are ready to compete on any cooking shows, but you will not feel cheated if you get to eat at Chez Jarvis. My wife’s tenderloin is restaurant quality and I am pretty adept anything grill related. So, as competitive as I am, I could not wait to see if the personal chef (Ellie) was that much better than we were.

Long story short, she was.

Ellie not only made us an absolutely awesome meal (and it was so awesome that we still use her for the One South holiday party some 10+ years later,) it was how she went about making it that was equally impressive. She made it in a stranger’s kitchen, wasted no food, created about 1/10 of the mess we would have and brought it all together at not only the exact same instant, but at the perfect temperature. Lastly, she did what would have taken us several hours and did it 30 minutes, tops.

In all honesty, it was not only fun to watch, it was a great life lesson about being an amateur and being a pro.

You can putt on my lawn, but it won’t be any fun…

I have another good friend who is the superintendent at an upscale golf course. Now, as he will readily admit, growing grass is perhaps the simplest form of agriculture imaginable. Everyone, at some level, can grow grass – seed + water + dirt + waiting – it is not that hard.

Golf, anyone?
Golf, anyone?

But just know this – golf courses, when at their best, are being pushed to their limits of health in order to create conditions most desirable to the golfing community. In key parts of the season, particularly the summer months, it his job to take the grass to the edge without killing it.

So imagine managing 200 acres to its limits each and every day, with multiple types of grasses growing in varied soils, varied shade conditions, highly varied air circulation conditions and varied moisture conditions all while trying to anticipate Virginia’s schizophrenic climate. If the National Weather Service gets it wrong by 5 degrees, especially during the peak summertime, you can kill an entire golf course.

Talk about pressure …

The short version is that my friend is equal parts scientist and artist.  He takes what are an infinite number of variables (nature) and makes sense of them all. He not only has to answer to himself, he answers to those who only see the results but rarely understand the constraints. His work is so good it is considered elite not just here locally, but at a national level.

And you know what else? He makes it look easy.

But real estate is easy …

For anyone who has even been through a real estate transaction, it can appear easy, especially if the agent you are working with is an accomplished pro.  Realize that the biggest part of the reason the transaction is easy is the advice they are providing and the work they are doing that you never see.

Doctors, mechanics, accountants, stylists, PR people, architects, graphic artists … and yes, chefs, golf superintendents and Realtors … we all do things that the public rarely sees and consequently doesn’t fully appreciate.  Yet thanks to HGTV, Zillow, Trulia, Houzz and Pinterest, the myth that real estate is a D-I-Y endeavor is perpetuated.

It is unfortunate because it is just not that easy.

So you can be your own Realtor, but should you?

It didn’t take Ellie 30 minutes to make my meal, it took her 10 years and 30 minutes to make my meal.

It didn’t take my golf buddy a few hours to lay out the protocol for maintaining green speeds on 97 degree days, it took him 15 years and few hours to lay out that protocol.

And guess what else, despite how it sometimes seems, it didn’t take me (or any other Realtor) a few hours to sell your home or find you the perfect home – it took us far longer.

The information and knowledge that we convey to our clients each and every day may seem like we just went to MLS and pushed the ‘meaningful statistic’ button … we didn’t.  Odds are the analysis we did was pulled from the latest market data and created exclusively for you.

While getting a real estate license is relatively easy, becoming a true pro is not. A good pro agent has a feel for values, trends, appraisals, incentives, geography, contract structure, marketing, data, analysis, competition, human nature, staging, design, construction, schools, zoning, finance, rental rates, law and negotiations (and yes, this is an abbreviated list.) We also have to keep up with changes in technology, continuing education, both local and national development and what goes on in Washington, DC.  It is not easy.

When a good agent makes a recommendation, it is based on far more than you can find on one of the thousands of websites dedicate to D-I-Y real estate.

Hire a pro. You will be happy.

Making Sense of the Numbers

August 17, 2015 By Rick Jarvis

We got one of these a week for my first several years in the business. As thick as a phone book .... amazing.
We got one of these a week for my first several years in the business. As thick as a phone book …. amazing.

It used to be simple(er).

When I first became licensed (1993), things were far different than they are today.  Back then, if you wanted to know what homes were available for sale, you used to have to wait for the Richmond Association of Realtors to deliver the ‘MLS Book.’ Each Friday, our local Multiple Listing Service would deliver us a stack of MLS books, approximately the size of phone books (I am not making this up) every Friday afternoon to each and every office in the Metro. As an agent, you would thumb through the pages and make copies and fax them to people or (GASP!) hop on the landline phone and call clients to tell them about the latest and greatest property for sale.

No text. No e mail. No cloud. No Authentisign. No DropBox. Just a phone book in black and white with a picture of the front of the house. That is all you got to go on. Good luck.

You know what?  We got it done.

Access.  Access.  Access.

Fast forward to today and I now have access to MLS via desktop, laptop, smartphone or tablet. I also have online access to the City and County tax records for assessments, past sales or other searches. From MLS, I can download bunches of records and export them to a spreadsheet to help with analysis, or I can also use one of the numerous functions inside of MLS to see trends and find neighborhood highs and lows.  If I am too lazy to analyze my own info, I can have it spoon fed to me by a myriad of statistical services that can slice, dice, merge and layer sales and demographic data into neat little charts and graphs.

Outside of MLS, I can look at Zillow’s estimates of value (as well as about 20 other automated value estimates) and gobs of research from Case Shiller or the NAR. And all of this info is available to me BEFORE I ever type anything into the Google bar and see what I can find out there floating in the web, on blogs or in research papers.

On one hand, it makes wonder how we ever did our job before all of this information was available. And on the other hand, it makes me wonder what is coming next … but that is another post for another day.

Easy as 1, 2, 3 … 4, 5, 6, 9, 37, 142, 359 … Wait, this is Hard!

The relative ease at which we can all access information is, in my opinion, the signature development in the last decade.  So it would stand to reason that with all of this access, being an agent, buyer or seller should be easier than ever … but is it?

I don’t think so.

Simply put, with access to an almost unlimited amount of information, it is getting incredibly difficult to tell what data is meaningful, what data matters and most importantly, what it all means.

Look at the chart above … does it really tell you anything?

As a buyer, should I care that the 2nd Quarter’s sales of 1,800 – 2,000 SF homes in 23832 is 11.1% above the same quarter last year? Or down 35.2% from the previous quarter? What do I do with these facts?  Should it change my strategy?  Does it make my offer lower??  Should I rent???  Should I pay cash???? Should I move to Canada?????  Or should I just paint my house mauve and fuchsia and stay put …

What Do I Do Differently?

As an agent, it now takes me about 3 times as long to explain my role than it did in 1993 … that’s all that has really changed. I still do the same basic things, it just takes me far longer to explain it than it used to and thus I have about 20 new speeches to help people make sense of the process.

Here are a sample of my new speeches –

  • ‘Why isn’t this house for sale in MLS when I see it on Trulia?’  (Answer –  Trulia is not MLS)
  • ‘Why is the house for sale on Trulia but not in MLS?’ (Answer, Again, Trulia is not MLS)
  • ‘Why is some other agent’s picture next to my home on Yahoo Real Estate when it is your listing?’ (Answer – because Yahoo isn’t MLS, either)
  • ‘Why can I get a 3.9% mortgage from USAA when the lender you recommended is at 4.25%?’ (Answer – because closing dates don’t mean anything to them)
  • ‘Why does Zillow say my house is worth $375,000 when I just paid $400,000 last year?’ speech (Answer – Because it is a computer generated estimate)
  • ‘What do you mean we aren’t closing Friday?!?’ (Answer – Because Dodd-Frank/TRID just mandated a 3 day wait period for changes to closing statements)

And many more.

My Job is Still the Same

The bottom line is that all of the changes in the past decade haven’t really changed what I do, it has only changed how many things I have to cover with my clients before they understand the process.

And guess what – the public is more confused than ever before.

A recent study showed that the number of people using agents has actually increased in the past 5 years. So despite the relative ubiquity of information with blogs and message boards explaining the home buying (or selling) process in great detail, the public is entrusting their real estate transactions to Realtors at increasing levels.  I find this trend both fascinating and refreshing.

At the end of the day, having information and knowing what it means are two different things.  A good agent knows the difference and can help you make sense of an increasingly complex and complicated process.

Its our job to make sense of it all. Use us.

 

Our Algorithm

August 16, 2015 By Rick Jarvis

If you ask 10 Realtors what their job is, you will get at least 11 different answers.

You would get answers like:

  • ‘We make dreams come true’
  • ‘We take the mystery out of buying or selling a home’
  • ‘We facilitate transactions’
  • ‘We market properties’

While all of those answers are true to some degree, we think they miss the most important and fundamental service Realtors can provide to our clients – accurately valuing property.

At the end of the day, helping clients understand where they stand in the market means impacting their financial health in the greatest of ways.  How you market your listings matters … the same way understanding deeds, inspections, RESPA, Fair Housing, construction materials and zoning matters. But if you don’t understand the underlying value of what you are buying and selling, then the rest of it matters far less (and if you read any of our blog posts with any regularity, you know we spend a lot of time talking about values and valuation methods.)

Why do we feel this way?

Because if we can help you understand the reasons why properties are valued the way they are, then you will make a decision that benefits you both now AND in the future.  In this new market of volatile market swings and conflicting information, helping our clients make sense of a hugely important financial decision is a responsibility we take extremely seriously.

The Rise of the Data

In case you missed it, the internet is having an impact.  How we communicate, how we date, how we shop, how we research our decisions (ok, research each other), how we promote ourselves and how we get our news have all been impacted.  And as the web continues to evolve, search engines, aggregators and analytics companies are becoming increasingly sophisticated in their ability to not only make sense of the mind-boggling amount of data available, but to present it to the user in better and better ways.

Algorithms are Everywhere

How are these companies making sense of the data?  Algorithms, that’s how.

This is Zillow's algorithm to make short term adjustments to its short term pricing predictive model.  Seems simple enough to me...
This is Zillow’s algorithm to make adjustments to their short-term pricing predictive model. Seems simple enough to me…

Algorithms for categorization, algorithms for valuations and algorithms for recommendation are becoming not only more prevalent, but more accurate.  Google is said to take into account over 200 different factors in how it ranks pages.  Zillow says it recalculates its Zestimates on over 1M homes per day.  The city (and counties) collect taxes based on valuing properties they have never been in and have to be able to defend if challenged.  And IBM advertisements claim that they can predict who is going to drop out of college based on how far they live from campus (or something like that.)

But are they getting it right?  If they get the underlying data right, then yes …

Does Zillow capture floor level in their model?  Doubtful ...
Does Zillow capture floor level in their model? Doubtful …

Agent Algorithms

Analyzing ‘housing’ (as an overall market) is one thing, but analyzing an individual house, and the surrounding neighborhood, and the floor plan, decor, color palate and neighbor’s car on blocks in the front yard, is quite another.  And this is where the agent adds value.

Good agents have algorithms, too, and they are very accurate.  Good agents have the ability to look at the data that matters and use it to help their clients make great decisions. And while they may not have the same number of µ’s and Σ’s in them that Zillow’s model does, our models contain one thing that the national predictive models never will – the correct and applicable underlying data set.

  • Do you think Zillow knows the difference in value between Grace Streets north and south sides?  Good agents do.
  • Does Realtor.com know that Woodland Heights recently received its historic designation … and what the impact will be?  Your agent should.
  • Can Google accurately reflect the subtle but important differences between the Ryan Homes and Eagle Construction warranty departments?  Good agents can.
  • Can any computer model tell you where the shrink/swell soils are in Richmond?  An experienced agent can.
  • Can Trulia tell you how another agent negotiates?  Once again, a good agent can.

Our Algorithm

You want to know about our algorithm?  And what makes it better than Zillow’s?

Here’s ours:

  • YOUR Best Decision = YOUR NEEDS + As Much Math as Required + Current Market Conditions + YOUR NEEDS + Schools + What is Available + YOUR NEEDS + Time of Year + Decor + Architect + Parking + Other Agent + Richmond + YOUR NEEDS + Timing + Development + Inspections + Lender + YOUR NEEDS + Builder + Trends + Whatever Else Needs to Go Into the Analysis + YOUR NEEDS

And do you know why our algorithm is better for your situation?  Because we wrote it for you.
And do you know what else?  If your needs change, we will change the algorithm accordingly …

Our algorithm was written for one person – you.  YOUR best decision is about what YOU need and not what we think or what Zillow, Google, your buddy, your boss, your mother, a colleague, or a friend of a friend at a barbecue thinks.

Summary

At the end of the day, good agents are far better at impacting their clients decision about individual houses than any über-computer run by any team of Stanford grads will ever be.  Our algorithms incorporate things that the computer models cannot even fathom and we change them each and every day based on the need of the clients we are working with.

All accomplished agents have advanced algorithms.  We can’t always explain them, but they work extremely well.

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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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From the Blog

Interest Rates 101

When I got my license in 1993, interest rates were 7.5%. By the end of 1994, interest rates were approaching 9.5%. When the market really got rolling in the early 2000's, interest rates were still hovering around 8%. In 2008 (the year the market crash began in earnest,) mortgage interest rates …

[Read More...] about Interest Rates 101

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