Remember "it’s the economy, stupid"? This Clinton catchphrase from the ‘92 election may well reverberate in this year’s election, too. Well, I have a new catchphrase to describe the Richmond real estate market and it is "It’s the selectivity, stupid."

     In past posts, you may recall that I mentioned my encouragement to my buyer clients to be very selective in their ultimate choice. Damn the gas prices, full speed ahead. With our glutted market, buyers need not compromise and should definitely find everything on their "want" list and most of their "wish" list in the home choice.

     Over the last few days, I have been working on pricing for a some potential listings I may have. In doing my CMA (Comparable Market Analysis), I was stuck by the "selectivity" shown in my comps. I know this last sentence was filled the Realtorese, so let me translate. "Comps" are comparable properties to the property you are trying to price (i.e., the subject property). "Comps" should have similar features - style, square footage, # of bedrooms, # of baths, location, etc. as the subject property. "Comps" should have sold within the last 6 months. A good CMA should have at least 3 "comps" to compare against the subject property. The analysis part of the CMA is adjusting each "comp" with a plus/minus value against the subject to arrive at a value for the subject property. Needless to say, this is a subjective process, since how do you give an absolute value for a difference such as a fireplace that the subject has and the "comp" doesn’t?  

    Anyway, the first property I was pricing was in an upscale western Chesterfield neighborhood. I had numerous "comps". All built within a few years of each other, all having the same number of bedrooms, baths, and approximate square footage.  This was going to be a breeze. The owner had already indicated to me what he thought the property was worth and my "comps" suggested the owner was dead on. Now, I started my analysis. As I went through my 5 comps, I noticed the first 2 "comps" had 9′ ceilings. Uh oh, so did 3, 4 and 5. My subject property was built with 8′ ceilings. So I looked at the competing market (i.e., what is/was for sale) and found numerous "comparable" competing 8′ ceiling properties had been on the market when these 9′ ceiling properties sold. 

     Next up in my analysis was a townhouse in western Henrico. Again, I had numerous "comps"; and again I knew what the seller was hoping for as a sale price. Another breeze. Not so fast, Brick. All my "comps" were for end units. The subject property was an interior unit. I am sure you can guess the rest.  

     The fact is all buyers in the current market are making sure they are getting their maximum deal. These buyers are making their choices based on the little differences. With inventory levels where they are, buyers have that option. While "price" overcomes all, buyers are willingly to "pay the freight" if they perceive they are getting their maximum bang for their buck,