Brick’s Blog

     I have had these numbers done for about a week and just realized I had not posted them. My apologies. I sometimes get distracted! As I have stated before, my major concern is in the declining number of sales while our inventory levels escalate. If any home buyers are paying attention, there are some unbelievable bargains to be found.

I promise to be more punctual in November.

       As you should know by now, I report market conditions monthly for the Greater Richmond area to Realty Times. Here are my comments for September:

            Sorry about my delay in reporting Richmond’s market conditions for September 2007. While September results were bad enough that hara kiri temporarily crossed my mind, a saner moment prevailed and therefore I can file this report. Okay, Brick, how bad was it?  

 

Where should I start? Sales month to month (September ’07 vs. September ’06) were off 19.6 %. For the first time this year (and the first time since I have been reporting on this market, which is now over 4 years), the average sales price for the current month lagged the preceding year’s month by almost $2,000 or .7 %. Now, before you naysayers start yelling “see, see” and claiming the Richmond market is on the verge of a collapse, let me point out that the September market was more bottom driven than any preceding month. 70 % of all sales occurred below $300,000, where in past months that average has been 66%. For the year, sales are off 7.4 % versus 2006 sales, but the average 2007 sales price, despite September’s decline, is up 4.8 %. So take that you housing market bears.

 

My biggest concern is in inventory levels. We started 2007 with about 9,000 properties for sale in the Central Virginia MLS. As of mid October that number exceeds 12,700. With the number of monthly sales declining, inventory levels will remain inflated. For sellers, it is very discouraging time. The biggest difficulty an agent faces is making his listings stand out from all others.

 

For buyers, either entering the market for the first time or who have their existing home under contract, welcome to a true BUYERS’ MARKET. The selection of properties is simply UNBELIEVABLE. Must sell situations are increasing and some of the best deals in years will be had over the next 3 months. There are so many good buys out there, but they’re lost among all that inventory. So instead of looking at 10-15 homes to make a decision, you should look at 30. And if your agent is any good, they’ll jump up and down when they think you’re passing up an opportunity. I know that’s what I would do. And remember the gate swings both ways, so I’ll also bang on the desk, if you’re making a mistake.

 

I still have major concerns for the final 3 months of 2007, since pending sales were off significantly in September. While my original projections for 2007 sales suggested we may end 2007 with 8 % less sales, I am still confident that year to year drop will only be 8 % or 1,200 fewer sales. The difference between 2006 and the record year of 2005 was less than 400 sales, so this is a noteworthy decrease.  

 

If I haven’t gotten your attention yet, I want you to envision me standing on top of my desk and jumping up and down, because I want you to heed this advice. Come the first of the year, I will be beginning my 24^th year of real estates sales in the Richmond market. Whenever Richmond has experienced a slow market in the past, the recovery has been marked by substantial increase in prices. Richmond plateaus in slow markets with steep price increases when it turns. That turn should be soon. If you haven’t noticed the Dow went back through 14,000, the S&P is at an all time high, we still have immigration problem, which supposedly is why we have such a low unemployment number, the economy didn’t collapse although you were told it would due to the sub prime mortgage debacle, lenders have money to lend at very attractive rates, and I have a map of the continental U.S. which will clearly show you that Richmond, Virginia is not located in California, Texas, Florida, Arizona or Nevada where the real housing meltdown is.              

 

     So call me, let’s go find one of those incredible bargains while we can. You don’t want to be “an I wish I had.”

     You have no comprehension of how much this post pains me to write. While I am still waiting for CVMLS (Central Virginia Multiple Listing Service) to post their official numbers for September, my preliminary ones indicate an approximate 16% drop in sales for September ‘07 versus September ‘06. This should bring the year to date decline in ‘07 sales from ‘06 sales to about 7 %. September sales showed 70% of all sales occurring at price point below $300,000 in contrast with the year to date average of 66%. See, there are some bright spots in this market!

Here’s the September breakdown:  

     This is the second monthly post for various areas that I currently monitor each month for sales activity. If there is a particular submarket in the Richmond area, you would like to see covered, please comment on the particular area. If viable (enough monthly sold activity), I’ll include it in next month’s post. These numbers are compiled from Central Virginia Regional Multiple Listing Service. Obviously, sold units only account for those using the services of a Realtor. (Editorial comment - While I have just started to post these results starting with August 2007, I have been tracking these areas monthly since December 2005. September 2007 was the lowest monthly sales activity, since I began monitoring these results. Average sales price, median price, and units sold were all substantially down. Conversely, days on market and dollar per square cost were constant.)

     One of the newer real estate trends we are seeing in the Richmond area is the "pop-a-top" on older smaller homes, which happen to be in highly desirable locations. Here’s one I have just listed on Woodberry Road in the heart of Westham. Before you see what this property originally was (yeah, you’re going to have to read the whole post first), let me tell you about 805 Woodberry Road.

     This is the 2nd property by Side Porch Properties LLC that I have had the pleasure of handling for them. Boy, these guys do nice work! Besides the second floor (i.e., the top that was popped), a huge 2 story addition was added off the Rear Elevation. Of course, pop-a-tops only work in areas where the lots are large enough to handle the additions. Usually these lots are in neighborhoods developed in 40’s, 50’s, 60’s and early 70’s, before developers starting squeezing every possible building lot out of a parcel of land. Additionally, these lots are closer to Downtown Richmond due to their earlier development.

     Rather than a lengthy post, I will tell you that Side Porch Properties LLC loads their properties with what I call LTTDs (i.e., Little Things They Do) that just make a property. An example of a LTTD on 805 Woodberry Road - instead of popping the top on the original structure, Side Porch raised the ceiling heights on the first floor to 9 feet rather than the original 8 feet. To see all their LTTDs, take the Visual Tour found here. This was no renovation, it was a transformation.

     Since the property is vacant, it is a very easy show. Just call me at 804.301.7598 and I’ll be glad to meet you there.  

     So what did Side Porch Properties start with? Amazing, huh?