Melissa Savenko's Richmond Real Estate Review

1306 Manders Knoll - New Listing in Smoketree South, Midlothian, Virginia Open THIS SUNDAY, 1-3

Check out this new listing in Smoketree South, Midlothian, Virginia.  We will be holding 1306 Manders Knoll open on Sunday, August 22, 2010 from 1-3 p.m.  Stop by and see this immaculate move-in ready home.  The photo album is attached here.  Offered for $190,000. 

Richmond, Virginia Is #3 in Number of Tattoos in the U.S. - This Is Related to Real Estate HOW?

Here's a really interesting article a friend just sent to me.  Apparently, Richmond, Virginia, perceived by many to be a sleepy little Southern town, ranks Number 3 in the nation in number of tattoos per capita.  That's more than L.A., more than Austin, Texas, and more than Portland, Oregon.

How in the heck is this related to real estate, you may ask?  Well, I don't know how many of you are familiar with Richard Florida, author of "Rise of the Creative Class" and "Flight of the Creative Class".  But tattoo parlors and the success of a city are positively correlated, according to his theory. And does anyone but me remember the Greater Richmond Chamber-commissioned study from about ten years ago, "The Young and the Restless," that dealt squarely with the creative class "flight" problem Richmond was perceived to have?

[NOTE:  I've previously written about this report, in the context if a very similar, IMHO, "visioning" process conducted last year by HYPE, "Helping Young Professionals Engage."  Here is that blog post.  Back to THIS blog entry...]

More on the relationship between tattoos and success later.  But for now, consider our ranking in the tattoo category to be really great news for the City of Richmond as a whole.  [Although that does NOT mean my daughter will EVER be allowed to have one.....]

ALL The Articles To Date in the Justin French Scandal - Necessary Background Before My Defense of Historic Tax Credits

Wow.  I can't even keep up with all the articles on the Justin French mess.  For those of you who have not been following the sordid drama, here is the list of articles from Richmond BizSense (who broke the story), the Richmond Times-Dispatch and Style Weekly.  They are in chronological order, as the story unfolded:

• Richmond BizSense, "Strategic Default?" June 30, 2010
• Richmond BizSense, "French's Bills Pile Up," July 9, 2010
• Richmond BizSense, "In Development Feud, Writing Is on the Wall," July 16, 2010
• Richmond BizSense, "Union First Sues Justin French," July 19, 2010
• Richmond Times-Dispatch,"Developer Fights Bank in Takeover of Property," July 20, 2010
• Richmond Times-Dispatch, "Judge to Decide in Bank's Bid For Properties," July 27, 2010
• Richmond Times-Dispatch, "Judge Approves Receiver for Certain Justin French Properties," July 28, 2010
• Richmond BizSense, "French Saga Takes a New Twist," July 29, 2010
• Richmond Times-Dispatch, "Developer Loses Control of 8 Properties," July 29, 2010
• Richmond Times-Dispatch, "Richmond Developer at Center of Dispute," August 1, 2010
• Richmond Times-Dispatch,"Federal Agents Raid Developer's Office," August 5,2010
• Richmond BizSense, "Feds Raid French's Office, Developer Goes Off the Radar," August 6, 2010
• Richmond Times-Dispatch, "Federal Agents Raid French Consulting Office," August 6, 2010
• Richmond BizSense, "I Was Not Told Why They Went In," August 6, 2010
• Richmond Times-Dispatch, "Architect on Two of Developer's Projects Sued," August 7, 2010
• Richmond BizSense, "Architect on French Projects Sued," August 10, 2010 
• Style Weekly, "Justin French, Chapter One," August 10, 2010
• Richmond BizSense, "French Tax Credit Records Raise Red Flags," August 12, 2010

This is going to be a critical story in Richmond for a while to come, and the fallout goes well beyond Mr. French.  I am already hearing stories from commercial brokers of deals falling apart because of the local banks' exposure on the French projects.  I'm hearing that lenders are refusing to touch any transaction with a historic tax credit component.  I'm hearing that commercial lending by the community banks in this town has ground to a screeching halt while this mess is sorted through and the banks' losses quantified.

This is very, very, VERY bad news for the City of Richmond, which has the largest number of historic properties and neighborhoods in the Greater Richmond Metropolitan area.  Historic tax credits are a means to revitalize these neighborhoods, increase property values, and promote environmentally-friendly building practices.  Yes, they can be abused by unscrupulous actors, but don't let a few bad apples spoil the bunch.  Folks, historic tax credits are a very good thing.  In my next posts, I want to explain exactly why.  But until you understand how tax credits work, please don't condemn the entire program just for the bad actions of one developer and his cronies. 

Say NO to the Carytown Big Box - What Else Can We Do with the Verizon Building?

An article has appeared in today's Richmond BizSense describing some Carytown merchants' opposition to a plan to put a big box retailer in the former Verizon building located at the corner of Floyd and Nansemond in Carytown.  Let's just be straight here - the word on the street has been for a long time that this mysterious big box retailer is Whole Foods.  Not the "blah blah blah - mixed use, medical office - blah blah blah" the developer and its lawyer are claiming in this article.

Now, some people want to see Whole Foods in that area.  I'd love to see a breakdown of where these folks actually live.  I suspect not a one lives within walking distance of the property.  But I'm not sure how to test that theory.  Anyone want to jump in with your actual address?  A specific block + zip code will do.

I don't want a Whole Foods at that location.  I'm not sure why we need - or how the market could sustain - yet ANOTHER grocery store within a one block radius.  I mean, you can swing a cat and hit Ellwood Thompson, Martin's, and Kroger.  For the die hard Whole Foods fans, can't you just drive the 15 minutes once a week to Short Pump (a/k/a the "Ninth Ring of Hell")?  I think a Whole Foods would ultimately either fail itself or cause one or more of the existing grocery stores to fail - meaning there would be shuttered big box space in Carytown.  That's not good for anyone.

Of the commenting residents, most seem to strongly oppose big box retail for the traffic congestion and/or because of the unique character of Carytown, with its boutique retail and local businesses.  Why can't the developer do something creative with the space?  How about commercial condos - small spaces - for retailers and commercial businesses that are consistent with the character of Carytown?  Or make the entire property residential by leaving the shell and renovating the interior?   Newly renovated apartments in the Musum Dstrict would rent like crazy.

Unfortunately, developers aren't in business to do the "right" thing, they are in the business of making money.  It's a heck of a lot easier for them to plop an established large business into a space, rather than trying to do something more complex and unusual.  If past experience is our guide, the City Council will roll over and grant the special use permit, likely without conditions, and the developer will do whatever it d*mn well pleases with the property. Here's hoping a groundswell of local opposition can at least slow the process down.

Banks and Foreclosures - They Don't Want the Property! - Then Stop Acting Like IDIOTS!

According to this article in Richmond BizSense, local banks and other financial institutions don't want the properties they're taking back by foreclosure, so they are creating their own websites to try to sell these properties.

Well, excuse me if I have little to no sympathy for these lenders.  I have seen WAY too many insipid, asinine, and down right idiotic decisions by these folks to buy their "woe is me!" tale.

Just a few illustrative examples:

• Individual with legitimate hardship (reduced pay, unexpected illness leading to additional expenses) but a good job files loan modification paperwork with large regional bank on December 12, 2009. Individual is NOT asking for principal reduction, only for reduced monthly payment in the form of an interest rate reduction or perhaps a short-term forbearance.  As of today, individual STILL has no answer, despite almost daily calls to the bank.  Lender is now threatening to foreclose due to one missed payment.
• Father loses his job and is unable to make mortgage payments.  The family has equity in the home.  They put the house on  the market at a fire sale price, while racing against the clock, since the bank has started foreclosure proceedings.  Ten days before the scheduled sale, they receive an offer on the house that would pay off the note in full AND give them $50,000 nest egg to find a rental and get back on their feet.  The lender refuses to cancel the foreclosure sale because it is "too late" for them to review the offer.  The bank forecloses.

And these are just two of MANY examples we have, just here in my 15 agent office.  So excuse me if I have no sympathy for these guys.  If they had procedures that made any d*mn sense and individuals who had any authority and could make REASONABLE DECISIONS then perhaps I would.  But over and over again I see banks scr*wing over good folks who have fallen on hard times and are trying to do the right thing.  So wah, wah, wah guys - you are reaping what you sow.  And ruining lives in the process.

Report on Richmond, Virginia Region Housing Market - Second Quarter 2010 Synopsis

Attached is the synopsis of the Richmond Region Housing Market Report for the second quarter of 2010.  The more detailed full report is attached here.  Activity was substantially up over the second quarter of 2009, due to the federal first time home buyer tax credit incentive.  However, it is predicted that housing sales will drop in the third quarter, reflecting the end of that credit.  Overall, the prediction for the future is cautiously optimistic, with the following conclusion:

Demand will dip in the summer, as a result of home buyers having pushed up purchases to the spring, but will return later in the year as the region’s economy improves. A somewhat smaller inventory and an increase demand should help spur the region’s housing market in late 2010 and into early 2011.

All in all, I'd call the report and the conclusion cautiously optimistic.  Works for me.

Housing Prices UP in Richmond, Virginia - We're Bucking the National Trend!

This article in today's Business section of the Richmond Times-Dispatch shows that there is good news in the Richmond, Virginia housing market.  Prices here were up 1.6% in the second quarter to an average of just over $200,000.  That's great news, and not unexpected by those of us that are "boots on the ground" in the selling trenches.  I've been told by agents with far more experience than me that Richmond tends to suffer less of a downturn, and recover more quickly, than the national real estate market.

Here's my concern, though.  It seems the national news is overshadowing the local news when it comes to buyer psychology.  People feel like things are terrible, because they are terrible in other localities, and that's what they hear on the news and in the press.  The good news about OUR market is buried on the 4th page of the Metro and Business section of the local paper.  Meanwhile, the major network newscasts lead off every night with more doom and gloom about the national economy.

The reality here:  There are GREAT real estate deals to be had here in Richmond, Virginia.  Even steals.  And interest rates are at record lows unlikely to be seen again in our  lifetime.  Real estate markets are local, folks.  And the evidence suggests the Richmond market is in recovery.  So if you want to buy a home, and have the means to do so, AND a stable job, I suggest you get qualified and get to looking.  And if you need an agent, you know where to find me - melissasavenko@gmail.com.  Happy house hunting! 

More on the Justin French Debacle - Strategic Defaults and Sophmoric Responses

OK, weird.  I wrote this on July 19, and thought I'd posted it.  Clearly not.  So, this post is a bit stale, but I'm putting it up anyway.  I'm just getting back from vacation and I'm trying to catch back up with everything, including this story.  I suspect it may take a few days.

********

Here's yet another article about the Justin French/Markel story, originating with Mr. French's strategic defaults on various commercial properties in various locations throughout the City of Richmond.  There have been several BizSense articles, so check out their website.  Note the comments, which are, IMHO, the best part of the articles.

I'm fascinated because Scott's Addition is my neck of the woods, and I've got experience with historic tax credit renovations.  I work with a number of investors who use historic tax credits for renovation projects, although most do not do whole-cloth warehouse conversions/multifamily adaptive reuse projects of this size and scale.  I myself have used tax credits on two "flips," including my current personal residence. 

My two cents on this most recent article, for what it's worth:  Being the daughter of a contractor, my strongest sympathies lie with any tradesman or contractor who has worked on a project and not gotten paid.  In this economy, these guys are surviving job to job, going out of pocket on materials, working in good faith, and to be caught in the cross-fire here...well, I think it's shameful.

Here's hoping the little guys get paid.  SOON.