Brick’s Blog

     When the supreme optimist (i.e., moi) starts using pictures of Chicken Little, Alfred E. Newman and now Eeyore to introduce his articles, than the news must not be good. As I had suspected earlier in the month, June ‘07 sales dramatically lagged June ‘06 numbers when reported by Central Virginia Multiple Listing Service (CVMLS) yesterday. While I had anticipated a number as high as 350, yesterday’s 305 difference was almost heartening news. Unfortunately, this dismal showing now puts ‘07 some 304 units behind ‘06 sales and we’re only halfway through the year. While 2006 was considered an off year in comparison to 2005, the entire difference for the year between ‘05 and ‘06 was only 386 units. 

     We’re now in our second consecutive year without a "Spring Market." 2nd quarter of 2007 was downright pathetic. Through the 1st quarter, 2007 was ahead of both ‘06 and ‘05. To be behind ’06 by the previously cited 304 units and 270 units behind 05’s numbers does not bode well for the rest of the year. I don’t get it. The Dow just made its 30th new high for ‘07 yesterday. Mortgages rates are good. Unemployment low. Where is the consumer confidence? Certainly not in the housing market.

     Here’s what the year to date numbers look like:

     I do love a Country Front Porch, especially one like this - 7.5 feet wide and 30 feet long. A porch big enough to cross your legs on, have a serving table and still have enough room to let your guests walk by without you having to stand up and scrunch up against the wall to let them get by. Add in that Chippendale railing and it’s pure perfection!

     Welcome to 10137 Georgie Drive, Mechanicsville, VA 23116. Located in the Pearson’s Corner subdivision off Route 301, this vinyl sided Colonial has been thoughtfully and meticulously improved and upgraded over its 25 year history. If you think I am exaggerating, than take the Visual Tour found here.

     Tomorrow, Sunday, July 15, the home will be open for its first showings from 1 - 4 p.m. The specifics - offered at $337,500 - 4 bedrooms, 2.5 baths, 2,364 square feet with traditional lay out of living room, dining room, and family room with fireplace. There is a huge addition off the rear and adjacent to the Kitchen that houses a vaulted Eat-In and spacious Florida Room overlooking the Rear Yard. And for you manly men, there is a 24′ x 30′ garage with juice, space to tinker on anything and still enough space to garage 2 cars. Come see me tomorrow.

     Directions - North on 301 past I-295, left on New Ashcake Road. First right on Georgie Drive. Follow signs.

      I report monthly market conditions to Realty Times. Here are my comments for June:

     Two months in a row. Brick isn’t happy and don’t mean I am one of the Seven Dwarfs unless it is Grumpy. I was convinced at the beginning of ’07 that Richmond would have a great Spring Market after a somewhat lackluster Spring Market in 2006.  Maybe 2006 wasn’t so lackluster after all. While May saw 100 + less homes sold in comparison to May ’06, my preliminary numbers for June indicate 2007 will lag June ‘06’s numbers by almost 350 units. Although I won’t be certain about these figures until CVMLS (Central Virginia Multiple Listing Service) reports its numbers to VAR (Virginia Association of Realtors) at mid-month, there is little doubt that 2007 sales are trailing 2006 sales by almost 5 %. Holy cow, Batman, we’re only halfway through the year. No kidding – and considering 2006 year end sales lagged the record 2005 sale year by 3.5 %, ‘we’ve got trouble - right here in River City.’ (My apologies to Harold Hill and The Music Man.)

 

     May through August sales are historically about 40 % of the entire year’s sales. Should July or August continue the May and June trend, the Richmond market could well end the summer in 7 – 8 % deficit for total sales in ’07 versus ’06. The Richmond real estate market is just awash in inventory. The inventory level at its highest point in 2006 was approximately 9,600 properties for sale.  Today, this figure is over 11,500. Frankly, there is just too much choice out there for buyers and buyers have absolutely no motivation to make a decision. When you add in any uncertainty in consumer confidence, than the market’s ennui is understandable. Daily I am seeing an increasing number of properties “expiring” unsold, more and bigger price reductions, increased incentives from builders, and even (gasp) lenders offering concessions. 

 

     Despite these current cloudy skies, there are a several silver linings to be found. Dollar per square foot for sales has increased all year. Sale prices have remained constant with little discounting. My list price/sale price ratio reveals discounting at under 2 % for the 5 municipal areas I cover. Million dollar sales continue to blowing away 2006’s record pace. Days on market, for what is selling, is unchanged.

 

     So what should we look for going forward, Brick? If you’re a buyer, there are and will be some incredible opportunities arising as we progress through the year. Sellers across the board are slowly realizing the market has turned and it’s a buyer’s market. “Must Sell” situations are increasing; and with them fantastic opportunities for “in the know” buyers. So how do you become an “in the know” buyer? Find a skilled negotiator and listen to what they have to say. Personally, this isn’t the first time I’ve been to the rodeo. If you, too, had been a real estate agent in the Jimmy Carter years and survived, than you know this market ain’t nuthin’   

 

     Now more than anytime recently, sellers need a seasoned agent. Pricing and marketing homes to sell is learned through experience. Don’t trust your largest asset to some green agent and certainly not to any agent who tells you exactly what you want to hear. Hire a PRO.

    I also report statistics (i.e., average sales price, sales price to list price ratio, median sales price, days on market, average size, and average dollar per square foot costs) for various submarkets (i.e., Chesterfield, Glen Allen, Mechanicsville, and Midlothian.) If you have an interest in these stats, you may find them here. You will need to scroll down beyond the generic introduction.