Melissa Savenko's Richmond Real Estate Review

Why I Have Been AWOL - And Upcoming Topics - Including Why the GRTC Bus Barn Sale to RRHA Sucks Rotten Eggs

I suck.  I can't believe I haven't posted anything in ELEVEN days, which in the blogosphere might as well be eleven months.  Gotta stay relevant, and prolific.  My excuses:

• I moved, and my life is chaos;
• I have no Internet service;
• I ama Richmond native and therefore genetically incapable of driving in the barest snow flurries, much less this "snowpocalypse," as Mark Brady termed it; AND
• The dog ate my homework.

But seriously, I have been living under a rock.  I didn't even know about the bus barn sale until I read about it six d*mn days after it happened.  [Note to self:  Change RTD subscription to new address.  Or walk to corner market and by a paper, for Lord's sake!].

Soooo...I have a lotta topics that have built-up.  The MOST important of which is the GRTC Bus Barn sale to the Richmond Redevelopment and Housing Authority ("RRHA").  I mean, how in the name of all that is holy does something of that significance get approved without public input, in the middle of December, when people are distracted with the holidays, and with only three (3) people voting?!?!  We gotta get to the bottom of this.

So, following is a list of topics I intend to address sooner, rather than later:

1. GRTC Bus Barn Sale to RRHA - How Did This Happen?
2. The Inaugural Group Meeting for "Richmond Matters" 
3. New Urbanism - Because Fake Traditionalism Just Didn't Sound Good
4. Shouldn't "Venture Richmond" Be Renamed "Venture Downtown/Shockoe Slip/Shockoe Bottom/Manchester"?
5. An Ode to Ukrop's - Oh, How I Will Miss You!
6. Why I Still Think the "Flying Squirrels" Is a Stupid Name
7. Alternatives to the Law Firm Billable Hour - Some Ideas

As always, I welcome suggestions or ideas for additional topics.  For now, signing off to address lack of home Internet.  Enjoy the holiday season, people!

Foreclosure Signs Being Stolen - Why?

I am not sure what this means - one of the seven signs of the Apocalypse? - but it sure seems odd.  I mean, what exactly would one do with a foreclosure sign?

Cool Beans! - A New Coffee Shop in the Fan!

OK, that was an absolutely dreadful pun, I admit.  But a new coffee shop - with by bike coffee delivery service, no less - is being opened at 116 S. Addison Street, south of Main and Cary Streets.  Here are the details.  Sign up for weekly delivery, and never be caffeine-deprived again!

Ding, Dong, The Witch Is DEAD! - The Death of the Billable Hour?

Here is an interesting article from BizSense about the "death" of the billable hour as the main billing structure for law firms.

[For those of you wondering why the heck I'm writing about billable hours and law firms on a supposedly real estate-related blog, I used to be a Big Firm Lawyer.  And so I find this stuff interesting.  And it's my blog.  So there. [;)]

Long and the short is UVA Law School did a survey of 10,500 graduates.  Of the General Counsel of corporations that responded, people responsible for hiring Big Law Firms, 55% indicated they want to move away from the billable hour. 

If that happened, there might be a sigh of relief across the nation.  Billable hours are the bane of the Big Firm associates' existence.  Let's think about it for a minute.  For bigger and bigger law firms, with more and more overhead, the only way to continue to drive profits - in the absence of new business - is (1) to increase rates; and/or (2) to increase the number of billable hours generated.  Raising rates is only sustainable for so long.  At a certain point you hit insanity - like the NYC lawyer on the Land America case who bills out at $995 AN HOUR.  [As one of my dear friends would say, "that's just CRAZY talk!"]

On the increasing the number of billable hours side, law firms run up against a certain law of physics, as much as they would like to ignore it.  Last time I checked, there are only so many hours in a day, and only so many hours you can require out of your people until you start approaching the realm of ridiculousness. 

Let's look at it this way.  Most big firms require a certain number of billable hours out of each associate, the baby lawyers at the bottom of the ladder, trying to work their way up the law firm pyramid. The standard requirement for Big Firms in this area is 2,000 billable hours. Typically it takes eight years of hitting these billable hour targets before an associate is even considered for partner.  So we need 8 years of averaging 2,000 billable hour years.  At the BARE MINIMUM.  Okay, now we get into the basic math.

There are 24 hours in each day.  Let's ASSUME 12 of them will be unavailable due to basic human needs, such as eating, sleeping, stretching, bathroom breaks, perhaps an hour or two of face time with friends or family.  That leaves 12 potentially billable hours each day.  If you are required to bill 2,000 hours each year, that ends up being 40 billable hours a week, 50 weeks a year [I'm giving my associates 4 weeks off, between holidays and vacations].  Now, that's 8 hours a day, 5 days a week, which doesn't sound too dreadful, right?  HOWEVER, that assumes 100% efficiency - meaning I would walk into the office at the stroke of 8 a.m., work until noon (4 billable hours), take an hour for lunch, and bill, bill bill until 5  p.m. (4 more billable hours), then go home, take the dog out, go for a run, have dinner with friends and family, and generally have a lovely life.

WRONG.  No one works at 100% efficiency.  It's just not possible.  Lawyers have to do all kinds of non-billable stuff - pro bono work, continuing legal education, travel to or from client meetings, time keeping - I could go on and on and on.  So let's face the reality that to achieve 8 billable hours in a day, you really have to be there for 10-12 hours, in my humble opinion, if you're being honest.  All of a sudden your 8 a.m.-5 p.m. job went to 8 a.m.-7 p.m., or 8 a.m.-9 p.m.  And that's JUST to achieve the bare minimum of 2,000 billable hours.  Lots of people making partner are doing 2,200 billable hours a year, or 2,400, or 2,600...

I've even heard (apocryphal?) stories of people billing 3,000 hours in a year, but I just don't understand how it's humanly possible.  That would be an AVERAGE of 60 billable hours a week for 50 weeks a year.  That's 12 hour days at 100% efficiency.  At 75% efficiency - which I think is much more reasonable - that would mean a lawyer would need to put in 16 hours 5 days a week for 50 weeks.  That's 16 out of the 24 hours that EXIST.  Unless someone has found a way to warp the time/space continuum that I am unaware of, I just do not see how people could be physically capable of it.  I'd spontaneously combust from stress and/or exhaustion.  [Which is part of the reason why I'm not a Big Firm Lawyer any more. [:)].

So why do law firms resist the movement away from the billable hour?  That will be the topic for another post another day.  I know you can't wait.... 

2010 Predictions for the Real Estate Market

Here are Diana Olick's - a CNBC real estate reporter's - predictions for the 2010 housing market.  She did pretty well in 2009, so it will be interesting to see how on the money she is for next year.

One really interesting prediction, relevant for all you potential sellers out there - Ms. Olick believes the housing market will slump mid-2010, picking up again at the end of the year, as the front-loaded 2010 tax credit incentives come to an end April 30, 2010.

What that means for you sellers - it's back-up for my advice to have your home on the market in early January 2010, to take advantage of the first time and "move up" buyers' rush to buy before the April 30, 2010 deadline for those first time buyer and replacement home buyer tax credits.  The tax credits are $8,000 and $6,500 respectively, which is not chump change.

So, if you want to take advantage of the buyer's market - with excess inventory, distressed properties for home buyers willing to work to add value, an amazing interest rate environment, AND free money from the federal government - but you have a house to sell, NOW is the time to be getting ready to hit the ground running in January 2010.  Call me, I'd be happy to give you a free consultation on how to get your house ready for market, and what your home is worth.  I'm never too busy for new business!  [:)]

More Mixed News on the Economy for the Richmond Region - I'm Sticking with Cautious Optimism

Well, the Federal Reserve's most recent - as in yesterday - pronouncement on the regional economy indicates cautious optimism is still warranted, although the picture remains mixed.   The local Fed's Beige Book contribution, which contains experts' analysis of economic activity, showed marginal increases in retail sales, housing and banking.  That is good news, but the economic recovery remains fragile as we head into the home stretch of the Christmas shopping season.

Let's hope these leading indicators continue to head in the right direction.  MY fingers remain crossed for a better 2010.

New Short Sale Rules - Thank Goodness!

The U.S. Department of Treasury has released new rules for short sale transactions, which should make these deals easier and faster.  The most important provisions cap the amount that subordinate lien holders can demand and require approval or disapproval of a short sale offer within ten (10) days.  Here's an article describing these rules in more detail.  Let's all hope they work.

Great News in the Residential Real Estate World - Existing Home Sales Increase 10%

Sales of existing homes rose 10.1%, due in large part to the first-time home buyer tax credit.  Good news.  'Nuff said.

West Broad Village and the Commentary - Tripower, You Suck

So, I'm reading the commentary on the article about the West Broad Village bailout by this new local private equity fund.  Someone, screen name "j-reb," posts the following, the first comment:

I love the way they [the Developer] tried their darndest to make the project look like actual urban architecture.  Much in the same way that ‘traditional’ shopping malls mimic old-fashioned main streets.  God forbid anyone should go to the real thing, just a few miles to the east.

This is a perfectly legitimate comment, in my opinion.  The developer has tried to mimic traditional architecture.  All along, West Broad Village has been marketed as an excellent example of "new urbanist" development - an oxymoron if ever there was one, in my personal opinion.  

So, I'm merrily reading along, and BOOM!  I hit this response, Comment #5, which has just made my blood BOIL, posted by screen name "tripower":

J-Reb I think the reason people don’t want to go to the “real thing” is they want to be able to find a place to park (for free) and not get mugged.

Seriously?  I mean, SERIOUSLY?  You suggest that shopping in the City requires paid parking and will result in physical violence?  Have you ever even been to Carytown?  Yeah, it's really scary.  All those families, walking around with their kids, supporting unique local businesses rather than the "same old, same old" big box stores, enjoying ice cream cones at Bev's, watching $2 movies at the Byrd Theater, having fun at the Watermelon Festival or any of the other family-friendly festivals....it's freakin' FRIGHTENING!!!

Tripower, you are a douche.  You probably spend next to no time in the City.  You probably live in some cul-de-sac subdivision constructed sometime since 1980, work in Innsbrook, drive a minivan or SUV, and think Applebee's qualifies as fine dining.  I'm sure you supported getting a "Henrico" mailing address.  People like you make me almost happy suburbia exists, so you can live there, and I don't have to ever be around you.

I am stepping away from the keyboard before I really say something I shouldn't.  Deep breaths....

West Broad Village Bailout - A Project Pulled Back from the Brink?

Well, it seems West Broad Village, the "new urbanism" development on West Broad across from the Best Buy, has been "saved" for at least the short term with an infusion of capital from a private equity fund.  It also looks like the management of the project's rejuvenation is going to be led by local developers, partners in the equity fund, who have significant incentive to make this project succeed.

More commentary on this topic to come later....

Housing and Economy Headed for SUSTAINABLE Recovery

According to an article in RISMedia, per the National Association of Realtors' ("NAR") Chief Economist, Lawrence Yun, the housing market specifically and the economy generally are headed for a sustainable recovery. 

I personally think that "sustainable" is the key word.  In housing, Mr. Yun predicts that both interest rates and prices will increase in this 4th quarter and then steadily throughout 2010.

What does that mean practically?  Right now, between mid-November to mid-January 2010, is the best possible time to be a buyer.  It's the traditionally slowest selling period, even in GOOD housing markets, and sellers are willing to negotiate to get a deal done before Spring 2010.  Interest rates are at almost historic lows, prices have stabilized, but there are still deals to be had.

The statistics don't lie.  Inventories are down, the sales "velocity" has picked up, the percentage of closing price to list price is increasing.  If you are waiting for the housing market to continue to drop in the Greater Richmond Metropolitan area, in my opinion that ship has sailed.  So if you planned to buy, now is the time to do it.

Carry on.