Melissa Savenko's Richmond Real Estate Review

Is the Richmond Real Estate Market Picking Up?

[NOTE:  I just figured out this is my 100th post!  Can I get a shout-out?]

Well, if my last two weeks are any indication, I'd say yes.  The basis of my conclusion is absolutely non-scientific, and purely based on my level of activity over the last few weeks.  Here's a brief (and incomplete, because I'm doing this off the top of my head) overview of what I've been doing.

1. Meeting with a new potential buyer client;
2. Re-activating two existing buyer clients, who have been in the "holding" period, where they aren't looking seriously;
3. Following up with several strong prospects from several different Open Houses;
4. Showing two different investor clients multi-family properties;
5. Writing a contract for one investor on one of those multi-family properties (which wasn't accepted, d*mmit);
6. Showing a different investor client a new foreclosure listing, and then writing an offer on that property, which required several rounds of negotiations with the bank (we didn't get that property either, the bank got five offers on the first day);
7. Picking up a new listing, which required (i) a preliminary listing meeting, (ii) preparing a Comparative Market Analysis ("CMA") to provide a list price range; (iii) holding a staging meeting; (iv) coordinating a professional photo and video shoot; (v) ordering and placing the signs ; (vi) drafting the brochures and the MLS listing; and (vii) holding the first Open House; and
8. Covering showings for existing listings.

Phew!  It's been B-U-S-Y!  Nothing has turned into an accepted contract as yet - although we did get another reservation on the Windsor Court Condominiums, woo hoo! - but the pace of activity has completely changed.  Another example:  My colleague held open 2109 Stuart this past Sunday, February 22, 2009, and had thirty people come through in two hours.  That's almost unheard of.  And the weather wasn't even nice - it was alternately raining, snow flurrying, and overcast.

So, what does this mean?  What is causing the uptick in activity?  I have a couple of theories.  In no particular order, they are:

1. This is the beginning of the Spring selling season anyway. People who want to buy tend to come out this time of year.
2. The prices of houses have gotten so good, "value buyers," those people who are just looking for the rock star deal, are getting off the fence also. 
3. The interest rates are still crazy low.  That's making houses more affordable.
4. Investors are out looking to pick up strong income-producing properties at reasonable prices.
5. The $8,000 first time home buyer credit may have been enough to push some potential buyers, into the market. 

[ASIDE:  I personally think the $8,000 tax credit is inadequate, and it's too bad it is limited to first-time home buyers AND has income restrictions. I don't think it will make enough difference.  The $15,000 credit available to ANYONE would have.  But that is a post for another day.]

Now, this is what I have personally observed happening in the Fan and Museum District specifically.  But it has also been true that these areas have been more insulated from the downturn in the local and regional real estate market. I'm not sure if this increase in activity is happening in other Greater Richmond neighborhoods at the same rate or even at all.

BUT....it could be a good sign.  I'm preferring to be an optimist, and see the glass as half full.  If we pull out of this real estate slump sooner rather than later, it will be good for everyone.

Oh, and something totally cool that I learned - this blog was directly responsible for getting me the new listing and the new buyer.  How awesome is that?

806 S. Meadow Street Photo Album is Updated!

Check it out.  These photos are MUCH better and actually do the home justice.  I can't claim any responsibility for these pictures.  But I am glad to have them, so people can see what a great opportunity this is.  And seriously, was I exaggerating about the kitchen?  It is AWESOME.  And brand new (August 2008).  But don't trust me, come see for yourself.  The home is going to be open from 1:00 - 4:00 p.m. today.  If you are in the market, or you know anyone who is, come on by and/or send your friends.  Look forward to seeing you there!

New Listing - 806 S. Meadow Street - Maymont Park Area

Well, I have a new listing that comes on the market tomorrow with an Open House from 1:00 p.m. to 4:00 p.m.  The address is 806 S. Meadow Street, right down the street from Maymont Park and right around the corner from Byrd Park.  It's a charming four bedroom, one bathroom Four Square stucco and slate home, with a full basement and almost 18'x18' garage. 

The highlight of the home is undoubtedly the kitchen, which was renovated in August 2008 with new cabinets, Zodiac quartz counters, stainless steel appliances, a tumbled slate back splash and Italian porcelain floor tiles.  A cut-through was opened up from the kitchen into the living room, and a 2-sided breakfast bar created with the same Zodiac quartz counter.  It allows everyone in the living room to interact with the cook in the kitchen, creating that flow people are looking for when entertaining.

Trust me, my photos do not do this home justice.  No one will ever accuse me of being a professional photographer, or even a skilled amateur.  But I do have better photos coming, hopefully no later than Monday, February 24, 2009.  I'll post an album with my mediocre pictures, and will switch out with the good ones once they are done.

So, stop by and visit tomorrow,especially if you are looking for a home in the $200,000 - $250,000 price range.  This is a great value at $225,000, for the size, the garage, the basement, and the KITCHEN.  Come see for yourself.

Top Five Reasons to Buy a House NOW, and Top Five Reasons to Wait

Wow.  It's been over a week since I posted.  I feel like I did when I turned in homework late at school.  All I can say is, if my last week has been ANY indication, the residential real estate market, at least in the Fan, Museum District, Church Hill, Northside AND Near West End of the City, is picking up steam.  BIG TIME.  More on this later, when I find the time to post specifically on the issue.

But, I did see this article, and since it basically encapsulated what I and other Realtors have been telling our buyer clients, particularly our first-time buyer clients, about why they should buy, I thought I'd post it here.

The five reasons are the same ones I've been repeating ad nauseum to my buyer clients, although probably not as articulately or in the same order.  I'm sure they are tired of hearing it, frankly.  They are:

1. Affordability is the best it's been since the National Association of Realtors started tracking this measure in 1970.
2. Inventory is high.
3. Builders are offering big discounts.  [NOTE:  I never use this one, because I rarely sell new construction].
4. Mortgage rates are at historical lows.
5. First-time home buyers qualify for an $8,000 tax CREDIT - that's take $8,000 off anything you might owe the federal government for your 2009 taxes - if they buy before December 1, 2009.

Now, in the interest of full disclosure, there is a companion article titled "Five Reasons Not to Buy a Home This Year."  Those reasons are:

1. Prices are still dropping.
2. This sale will be on for a while.
3. You may not stay put.
4. Your job may be the next to go.
5. Your cash reserves will be eaten up.

All of these are legitimate reasons not to buy in this environment.  I will say, in the Fan, Museum District and certain near West End neighborhoods, I'm not buying Nos. 1 and 2, at least not much longer.  I don't believe "prices will continue to drop" and "the sale will be on for a while."  What's happening now is buyers are BUYING in these areas, bringing the inventory, i.e. supply, more in line with demand.  Buyers, listen up here:

That means if you want to buy in one of these areas, you will not have as much leverage over sellers as you seem to THINK you will. 

This is basic economics, folks.  As supply and demand come into balance, prices will rise.

Now, I DO strongly believe Nos. 3-5 are legitimate reasons not to buy, although you may be sad later to have missed the major bargains.  But if you think you are likely to move soon, you are concerned abut your job, and/or you have limited financial resources should you lose your job, I think continuing to rent might be the smartest approach.

OR....maybe a lease/purchase would be a good option, locking in today's bargain sales price and giving everyone time to weather this economic storm.  Just a thought.  I'd be happy to help you with one of those.  [;)]

Why Can't Real Estate Follow the CarMax Model with "No Haggle" Pricing?

Well, I think CarMax, the successful child of poor ole bankrupt Circuit City, is still doing pretty good.  For those of you not in the know, CarMax developed the model of "no haggle pricing" for the used car industry.  No annoying salespeople.  No back and forth to "the manager" to see if a deal would work.  Just a sticker in the window that gives the price and other relevant used car information.  So you can walk onto the lot, browse around for what you want, and buy a car without all the crazy annoying process that is part of thee REGULAR used car sales world.

Why can't we do the same thing with houses?

Now, I know houses are not the same as cars, but can't the same principles apply?  In my opinion,there are three main areas that can lead to problems in the typical home sale:

1. Financing;
2. Inspections; and
3. Appraisals

Now, there is a standard way to deal with the financing issue - the issue of whether or not the potential buyers can actually afford to buy the house and get bank financing to do so.  It is standard to require a bank prequalification letter with the offer when it is submitted.  Then, the potential buyers have a certain number of days to nail down their financing, and if that time passes, and their financing falls through, the sellers are entitled to keep the earnest money deposit, the cash they put down on the house when they submitted the offer.

Why not do the something with the other two potential problem areas, inspections and appraisals, to eliminate them as issues?

For example, why not have the house pre-inspected, and either (i) make all suggested repairs, and provide receipts along with the inspection report to any potential buyer; or (ii) provide the inspection report, and discount the list price to include the cost of those repairs?

The appraisal, as I have discussed in a previous post, is the bank's assessment of the "actual value" of the home, based on recent proximate sales, which may be more or less than the buyer has offered to pay in the standard buying scenario.  If the appraisal ends up being less than the contract price, and the buyer is financing the purchase (as opposed to paying cash, in which case you eliminate the appraisal altogether) then the seller has no choice but to (i) lower the price to the appraisal number, or (ii) walk away from the deal.

Both negotiations over inspections and appraisals can make deals go off the rails weeks, or even months, into a transaction.  So why not take those issues off the table and offer essentially no-haggle pricing?

In this model the seller would:

1. Get an inspection, provide the inspection report to any potential buyer and either (i) make all indicated repairs and provide receipts for same; or (ii) discount the price to accommodate the repair costs:
2. Get an appraisal that set a lender's valuation of the house, so there were no last minute surprises if the valuation came in lower than the offer price.

Doesn't this approach make sense from a purely practical standpoint?  Houses would be priced realistically, rather than with some premium that gave the sellers "room to negotiate," you would have some assurances that you could get financing for the list price, because some appraisal firm would have confirmed the value.  People wouldn't waste their time trying to make deals happen that fall apart over the unknowns of inspection or appraisal.

It seems to make sense to me.  But maybe I'm missing something.  It seems to me with this approach, the focus would become finding the right house, and getting the transaction done.  It would be a much more collaborative and pleasant experience, I would expect, because there aren't these hidden issues to derail a deal.

So, shouldn't Realtors be stealing a page from the CarMax play book?

 

Baseball in Richmond - Boulevard vs. Bottom, Times.....

OK, for the record, I am going to admit to what I DO NOT KNOW:

1. I haven't been to one of the developer-organized programs or the "Community Support Meetings" ("CSMs" - love their cute little acronyms) for baseball in Shockoe Bottom; and

2. I haven't seen the developer PowerPoint that explains the developer's position and rationale for baseball in the Bottom (although I have tried).

What I HAVE done is follow the news coverage pretty daggone religiously - since way back when in 2003 when the Richmond Baseball Initiative,or "RBI," was pushing for a new stadium.  [Those that know me well know I have a driving, almost compulsive, need to read the paper every day, along with my morning coffee.]  My father was in fact heavily involved in RBI, and I believe I have been introduced to Brian Bostic once or twice at various events around town.

So, all that is only to say that I do not consider myself the most educated person about the current proposal, nor to I claim to have pored over the financials, but what I do claim to have is basic knowledge about the evolution of this issue.  As I recall, the Braves wanted a new stadium, various members of the business community pushed for same, there was argument and dispute over whether we could renovate the Diamond - some said yes, the Braves said no.  Then there was also dispute over where, if there were to be a new ballpark, it should be put.  The locations I recall being put forth were (i) rebuilding at the Diamond; (ii) building in the Bottom; and (iii) even the site of the former Fulton Gas Works - which was proposed by none other than our former Mayor, Doug Wilder.  [If you want to know why that was a bad idea, just Google "brownfields"].

All of it fell apart.  No one could agree on renovation vs. new.  The counties, Chesterfield and Henrico, wouldn't commit to financially supporting a new ballpark.  The Braves insisted on new, and finally, after much rending of clothes and tearing of hair, they left for Gwinnett County, outside Atlanta.

OK.  So that brings us pretty much to the current day.

Now, where we are is we have NO ball team, but we're fighting over whether the new ball park for the phantom team should be built in Shockoe Bottom or on the Boulevard.

I also want to make a few assumptions about the Boulevard as a ball park site, since they are essentially inherent in the (VERY) conceptual plan that has been put forth by Highwoods Properties, the Master Developer for BOTH the proposed Shockoe Bottom and Boulevard projects.

ASSUMPTIONS:

• Boulevard will be developed, with or without a ball park.
• The Boulevard redevelopment, with or without a ball park, will require the demolition of both the Diamond and the Arthur Ashe Center.  By demolition, I mean the blowing-to-smithereens-and-starting-new. [BTW, I am absolutely in favor of this approach, and have discussed why in previous posts].
• The current approach  at the Boulevard site is to keep Sports Backers Stadium and to propose additional amateur sports development, including the possibility of a VCU tennis facility.

OK, let's assume my assumptions are correct.  If they aren't, feel free to point out why they are not.  Here's what I see as the $64,000 question:

QUERY:  If you are going to develop Boulevard with a large component of "amateur sports," including an existing soccer facility and (perhaps) a university tennis facility, wouldn't it make sense to have an amateur ball park there as well?

I swear I must be missing something.  Baseball has BEEN on the Boulevard, they plan to keep other sports on the Boulevard, we've finally gotten past the idea that we could renovate the Diamond and everyone seems to be on the same page and agree that we need a new stadium......

Given the choice between baseball in the Bottom and the Boulevard, doesn't Boulevard make more sense?  Baseball's been there.  Sports are going to be there anyway.  Rebuild it, and they will come.  Because they used to come.  And they'll come again.

Windsor Court Condominiums - Picture Album Updated

Well, I just - earlier today - updated the photo album on this blog site with photographs of the two staged models at the Windsor Court Condominium project I am co-listing in the Fan.  The project is located at 1608-1614 Grove Avenue, each unit is two bedrooms, and half (12) of the units are one bathroom, half (12) are a bath and a half. 

I still need to post the tax abatement analysis, which shows the tax savings to a buyer over the 10-year life of the abatement, as well as the pricing sheet.  Prices range from $224,500 to $244,500.  All the units come with a dedicated parking space. 

So, take a look at the updated pictures and stop on by for a Sunday Open House, 1:00 - 4:00.  We think we have a great product - great location, great amenities, great workmanship.  But it's YOU who will ultimately decide.  And look for the pricing sheet, the tax abatement sheet, and the professionally shot videotour really soon.  Oh, yeah - if you want to buy one, I'm easily reached at (804) 986-3993 or melissasavenko@hotmail.com. [;)]

Back to Basics - Central Virginia Regional MLS Statistics Through January 26, 2009

For those of you who like lots of data and numbers, here are 34 pages of statistics comparing Central Virginia Regional MLS sales YTD - or at least through January 26, 2009 - to the similar period 2008. 

A nice relief from the baseball discussion, eh?  [;)]

FanGuy Strikes Out on Baseball in the Bottom - Wanna Rap Battle?

I don't even know what that title means, I just wanted to use a baseball pun.

But, apparently someone reads my blog, and "FanGuy" was sufficiently bothered by my questioning of baseball in the Bottom that he devoted an entire post to refuting it!  I feel like I have arrived.  Someone besides my Mom reads what I write!

Now, I feel like I need to clarify a few assertions of FanGuy's.  And just to be clear, just like my questions about the Bottom proposal, these are in no order of priority.

1.  Me as a Realtor/Developer:  I'm quite flattered, but you only got it HALF right.  Realtor, yes.  Developer, no.  And I've never even met Charlie Diradour, although he recently "friended" me on Facebook and I did join his "I Support Baseball on the Boulevard" group.

2.  My "Interests" in the Fan and Near West End:  Wow, it almost sounds like I have some nefarious plan and hidden agenda.  Facts are I live in the Fan, work in mainly historic City neighborhoods, and my parents live in the near West End.  Other than that, I'm just like any other interested and concerned citizen who wants the best for the City.  I own my house (well, really, the BANK owns my house), and that's the only real estate I have.  No parcels near the Diamond that would result in massive financial windfalls to me.  D*mmit.

3. Flood Plain Location as a Concern:  First of all, there was no rhyme or reason to the order of the concerns I presented, so the fact that this was first didn't indicate anything of significance.  And of course business owners in the Bottom are going to support a baseball stadium there.  Duh.  If it happens, it will be good for their businesses.

But I still believe the flood plain issue is a legitimate one, and my point was I would like to better understand why we shouldn't be worried about placing development in a 100 year flood plain.  And dude, there is NO WAY the problems that caused the Gaston event have been "addressed."  The flooding was the result of the failure of the combined sewer overflow ("CSO") system.  The City did what it could afford, but the problem is far from solved.

4.  "Substantial Neighborhood Opposition":  I chose my words very carefully there, and even considered throwing in a sentence acknowledging that the opposition was not monolithic.  To be clear, I was referring to the residential neighborhoods, not the Shockoe Bottom business owners, who I think would be essentially crazy not to be on the "baseball in the Bottom" bandwagon.  I stand behind my statement.  I think there is a large group of property owners in the neighborhoods surrounding the Bottom who do not want baseball in the Bottom.  They have every right to be heard.

5.  Criticism of the Boulevard Location:  FanGuy does exactly what he accuses me of here, making a whole lot of assertions about the type of development that the Boulevard site would end up with - big box stores a la West Broad Village - with absolutely nothing to back him up.  Couldn't that same criticism be leveled against the Bottom development?  And if he had ever bothered to read my series of posts on redeveloping the Boulevard, he would be aware that I advocate for an entirely new stadium on the Diamond site, as part of the larger Boulevard development.  Finally, he asserts with no support that the development on the Boulevard would not be "pedestrian friendly," would be "expensive," and is "not the greenest option."  Huh?  And the Bottom proposal is pedestrian friendly, cheap, and green?  Again, he doesn't present a lick of hard evidence to support his assertions.  And apparently, being two blocks away from a multiplex theater and new restaurants is a bad thing, and people can't manage to walk over a bridge.

The facts are there is a development proposal on the table for Boulevard right now, it was announced on the same day as the Bottom development.  It's even the same developer, Highwoods Properties.  The only issue, as I understand it, is whether that development includes a baseball stadium or not.  Boulevard development is coming.  Here's the article making the announcement. 

5.  Baseball "Failing" on the Boulevard:  In my personal opinion, baseball didn't fail on the Boulevard.  Richmond, and mainly Doug Wilder, screwed it up.  The Braves said they needed a new stadium and we couldn't get our act together to give them one.  Now we're all up in arms over where to put a stadium, and we don't even have a baseball team! 

Here's the baseline [hardy har-har, more baseball puns!] point I was trying to make:  If the Bottom is the best place for baseball, prove it to me.  I'm not an unreasonable gal.  I'm open to listening.  I haven't made up my mind.  But I have legitimate concerns, and I want analysis and evidence-based answers, with real data to support those answers.  Convince me, don't brow beat me and treat me like I'm stupid because I don't toe the party line.

I'm tired of the posturing from the supporters of baseball in the Bottom.  Post the data.  Provide the support for the revenue projections.  Share the market research that demonstrates a downtown stadium will be successful.  FanGuy's article is yet another example of the shrill, mean-spirited attacks that I've been getting from "Baseball in the Bottom" supporters.  Why can't reasonable people disagree, and disagree reasonably?

And, I have to note it's pretty d*mn easy to tear someone else's position apart when you post anonymously.  Hey FanGuy, if you have the courage of your convictions, step up and go public.  I'll debate you on the point anytime.  Bawk, bawk.

Baseball in the Bottom - The Suicide Squeeze Has Started

Well, I've been trying to stay on top of everything going on with baseball in Shockoe Bottom.  There have been numerous Richmond Times-Dispatch articles, Style Weekly blurbs, local blog posts, and now there are "Community Support Meetings," or "CSMs" for short.  These "CSMs" seem to be the opportunity for the developer, Highwoods Properties, to put on their dog-and-pony show and re-emphasize what a great idea baseball in the Bottom is.

I'm not convinced. 

To be clear, I AM a total supporter of bringing baseball back to Richmond.  We should never have lost baseball in the first place.  And if I knew where it was, I'd TP and egg Doug Wilder's house for being such a dip sh*t with the Richmond Braves.  THAT was a smart one, Mr. Mayor, being such an obstructionist about the ballpark that the Triple A Braves take off for Gwinnett County.  I mean seriously - Gwinnet County!?!

Second point of clarification:  I believe the Diamond has to be replaced, not renovated, and any ball club that comes to Richmond will require a new stadium.

BUT.....is Shockoe Bottom the right place for a ball park?  If so, why? 

Here's what I don't get.  There are a number of very specific negatives to the Shockoe Bottom location.  Given that there are so many negatives, and so much opposition, WHY do the developers keep pushing baseball in the Bottom?  In no particular order, here are some things I think are problematic:

1. All of the development is located in the flood plain.  Does anyone else remember Gaston and Isabelle?  The developers have said the baseball stadium itself "solves" the flood plain issue, but I don't know how.  Please explain. 
2. There is substantial community opposition to the Shockoe Bottom location.  [NOTE:  I just had to find somewhere in this post to link this article.  HI-larious.  Club Velvet, the cheesiest strip club in all the land, had a giant banner opposing baseball in the Bottom on its building.  I love it.].
3. The proposed development is adjacent to significant archaeological sites related to the Richmond slave trade.  The developers say they will preserve those sites, but I want more than mere platitudes.  Which land?  How will you ensure it is protected?
4. Financing the ball park requires a special authority to issue bonds, and the City will be repaid for its contributions with tax revenue from the stadium and related private development.  Several have said the revenue projections are optimistic, to say the least. 
5. The developers say there is adequate surface parking around the proposed stadium.  I'm REALLY skeptical on this one.  Has anyone tried to park Downtown, in Shockoe Slip, or in the Bottom during the business day?  You could circle for H-O-U-R-S.
6. The location isn't central to the region.  You've just made baseball further away for Hanover, Chesterfield and most of Henrico.  If we want regional cooperation on the ball park, shouldn't we prefer a more centrally located site?
7. The Shockoe Bottom location isn't easily accessible.  The developers are going to say that I-95/I-64 and the Downtown Expressway all connect right at the site of the ball park.  But that area is Richmond's own little Mixing Bowl.  Have you ever tried to get off at 18th Street during 5:00 rush hour?  That area is a death trap.  I can't imagine how it would work with stadium traffic.
8. In my memory, Shockoe Bottom has not been able to sustain consistent retail and restaurants.  It's been cyclical, at best.  What makes anyone think the ball park would change that?

I'm willing to be convinced that the Shockoe Bottom location is the better one, but so far I'm still on the Boulevard train.  I've explained why before, but here's the quick recap:

1. Currently already the site for baseball - although now we have no team, d*mmit - so already an acceptable and familiar location for the community;
2. More centrally located for the rest of the Greater Richmond metropolitan area;
3. Massive amounts of available surface parking;
4. Adjacent sports facility, Sports Backers Stadium, that could contribute to the conversion of the site to a more comprehensive sports and entertainment destination [NOTE: This is a new "pro" for me, in the past I have advocated for blowing up everything on site, and starting fresh.  I still think the Arthur Ashe Center needs to go];
5. Demographics in the immediate vicinity - Northside, Scott's Addition, the Fan, and the Museum District - that should support baseball;
6. No residential opposition;
7. Existing organic growth and development in the Boulevard.  This would be ADDITIVE to the momentum, not the "build it and they will come" BS we've seen in Richmond time and time again.

Again, I wish I understood why the developers are so adamant about baseball in the Bottom, when it's such a divisive issue and divisive location.  And if the developers are going to insist on this "build it and they will come" approach, then I think the ball park should go in Manchester.  It makes as much sense as Shockoe Bottom, and that community needs an anchor more than the Bottom does.

Oh, and to those who think us "native Richmonders" don't have much vision when it comes to Richmond - I can assure you, we have plenty of vision.  And long memories.  We just choose not to drink the Kool-Aid without checking it first.