I have recently been working on developing better ways to display residential sales data. Today I was able to create a few maps that show sales history for Area 10 and for the Fan District. I decided to look at the year sold along with Days on the Market. Take a look at how it turned out:

Fan District

Please let me know your thoughts and what type of data you would be interested in seeing. I will do the same maps for other Richmond, VA real estate zones over the next week or so.

Mortgage Rates Falling Like the Leaves?

Mortgage rates are now below 5% for conforming 15 and 30 year-fixed loans. In Virginia the maximum amount to borrow and be conforming is $417,000. Check out some great historical charts from Mortgage-X that show great the current rates are:

http://mortgage-x.com/trends.htm

Visual Realty: Google Maps Current Real Estate Listings

View Larger Map

Emotion and the Sell of a Home

I recently was working with a potential client and we had a hard time seeing eye to eye on what his house should be listed for.  The house has been on the market for over 15 months and has been listed both as a FSBO and with an agent from another company.  The original listing price back in mid-2008 is a full 20% higher than what I suggested we list it at.  All my research on comparable sales over the past year for the neighborhood as well as active listings pointed me to the price I suggested.   The list price, price per square foot and everything else supported my decision.   Are their differences in the house and the comps?  Sure, there always are.  Some may have an extra bedroom or a smaller yard while others don’t have central air or an updated kitchen.  These pluses and minuses are always taken into account to come up with a price that I think will SELL the house.  The problem isn’t logical, it is emotional.

In today’s market, particularly for houses  that have been on the market for a while, most owners become fixated on two issues related to price.  The first, and most obvious, is the price they need to sell the house for to still break even in their total investment.  While this is sound financial reasoning, they don’t realize that the housing market is a function of the current supply and demand which is not at all related to what it was when they purchased the house.  Like the price of gas, the price fluctuates daily and the price you paid one month ago may never be reached again.  There are markets, agriculture and commodities, that allow buyers to set and agree on a price today for product that may not take possession of for many months or sometimes years.  The real estate market has no such feature; the price today may or may not be the same tomorrow.  In a declining market, like the one we have been in for the past few years, the odds of the value (price) going back up over the short term are very low.  If you can get $XXX today, the price you will get a week, month or year from now will likely be less.

If you must sell in the current market, you must get ahead of the curve and not chase it.  This means you not only must price in line with comps, you really need to price LOWER than the comps.  All things being equal, the cheapest of five comparable houses will get the most attention.  Now is not the time to think “I am giving $XXX dollars away by pricing it lower than everything else”.  Rather it is the time to think “I need to SELL the house, if I make money great, but it is time to move on and cut my losses.”  Ideally you can wait to go onto the market when prices are on the rise.  If not, be the smart seller on the block and let the other buyers wonder in a few months why they can’t now get what you got when you sold your house “too cheap” months ago.

City of Richmond Real Estate Update

The August numbers from the CVRMLS are in and it looks like the Richmond, VA real estate market continues to stabilize.  The Average Days on the Market is a good figure to track since it indicates both how the market is progressing from a sales perspective as well as how realistic the homes are being priced.  As you can see from the below chart, three of the five City of Richmond real estate zones, 10, 50 and 60 have seen a decline in the Avg. DOM over the past four months.

2009 Average Days on Market- City of Richmond

Next we will look at the Sales Price as a percentge of the List Price to see how realistic the asking prices are in the same zones.  The chart below is positive because the gap between the List Price and the Sales Price is getting smaller in Zones 10 and 20.

Sales Price as % List Price- 2009- City of Richmond

What will $500K Buy In the City of Richmond?

Past posts have looked at what $250,000 and $350,000 will buy in the City of Richmond, VA.  Today we will look at what $500K will buy in the same zones.

What $500K will Buy:

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Zone 10- Includes the Fan, Monument Avenue and Church Hill

Neighborhood- The Fan

Year Built- 1913

Sq. Ft- 2,523

3 Bedrooms, 2.5 Bath

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Zone 20- West End, part of Windsor Farms

Neighborhood- West End (Malvern area)

Year Built- 1939

Sq. Ft- 2,637

4 Bedrooms, 2.5 Bath

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Zone 60- South of the James River

Area 60- $500K

Neighborhood- Glenburnie

Year Built- 1938

Sq. Ft- 2,610

3 Bedrooms, 2.5 Bath

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There were no properties sold within the past six months in this price range for Area 30  or Area 50 in the City of Richmond.

Are Sellers Being Realistic With Their Listing Price?

Taking a break for a minute from the “What will $XXX buy you” series,  I want to look at how quickly listing prices are coming in line with sales prices.  Specifically, I am interested in Area 10 and Area 20 in the City of Richmond.  These two areas include the Fan, Monument Avenue, the Near West End and portions of Windsor Farms.

To come up with some useful numbers, I looked at all sales in these two areas YTD (Jan 2009-Aug 13, 2009).  I then took the Pending Date (date under contract) and plotted it against the ratio of listing price to sales price.  For example, if  a house was listed for $300,000 and sold for $250,000, the ratio would be -16.7% (negative because it sold for less than the listing price).  In theory, the close this percentage is to 0%, the more realistic the listing prices.  This is important because it would show that sellers are now being realistic about the current value of their homes.  I also included a trend line on each chart to show the direction each of the areas are trending.  Please note that there are some data points that extend into 2008 since I am using the pending dates for 2009 sales, not the sales date.

Area 10

Area 10- 2009 Sales- Listing Price vs Sales Price

What the chart shows is a gradual narrowing between the Listing Price and Sales Price in Area 10.  While there are several outliers, overall the pricing is headed in a positive direction.  Currently, the Listing Price are only around 2.5% higher than the Sale Price,  a decrease of 5% from earlier in the year.

Area 20

Area 20- 2009 Sales Listing Price vs Sales Price

Area 20 is also showing positive movement in the correlation between the List Price and the Sale Price.  From November 2008 until now, the difference between the two prices has shrunk from around 8% to approximately 5%.  So while the List Price is still higher than the Sales Price, the difference is shrinking.

Is the above data perfect? No.  It doesn’t include things such as the seller paying closing costs and other financial considerations that would effect the net price paid for a house.  However, there are enough data points for us to be able to say with some degree of confidence that seller in Areas 10 and 20 are pricing their houses ina way that reflects the current market.

What will $350K buy in the City of Richmond?

Yesterday I looked at what $250k would buy in the five zones within the City of Richmond.  Today we will look at what $350K will buy in the same zones.

What $350K will Buy:

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Zone 10- Includes the Fan, Monument Avenue and Church Hill

Zone 10- $350K

Neighborhood- The Fan

Year Built- 1910

Sq. Ft- 1,740

3 Bedrooms, 1.5 Bath

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Zone 20- West End, part of Windsor Farms

Zone 20- $350K

Neighborhood- West End (Malvern area)

Year Built- 1940

Sq. Ft- 1,855

3 Bedrooms, 2 Bath

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Zone 30- Northside

Zone 30- $350K

Neighborhood- Ginter Park

Year Built- 1924

Sq. Ft- 2,218

3 Bedrooms, 3 Bath

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Zone 60- South of the James River

Zone 60- $350K

Neighborhood- Westover Hills

Year Built- 1951

Sq. Ft- 2,421

3 Bedrooms, 2.5 Bath

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There were no properties sold within the last three months in this price range for Area 50 in the City of Richmond.

As you can see, $350,000 will get you a 60-90 year old house with around 2,000 square feet, three bedrooms and two bathrooms.

What will $250,000 buy in the City of Richmond?

With the recent decline in both the national and regional housing market, I thought we could look and see what $250,000 will buy you in the Greater Richmond region.  Today I will review properties that have sold in the past three months within the real estate zones in the City of Richmond.  These are zones 10, 20, 30, 50 and 60.

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Zone 10- Includes the Fan, Monument Avenue and Church Hill

Zone 10- What $250k will buy

$250k would buy a house like the one pictured on the right

Neighborhood- Church Hill

Year Built- 1920

Sq. Ft- 2,166

4 Bedrooms, 3.5 Bath

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Zone 20- West End, part of Windsor Farms

$250k would buy a house like the one pictured on the right

Neighborhood- West End (Malvern area)

Year Built- 1946

Sq. Ft- 1,484

3 Bedrooms, 1.5 Bath

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Zone 30- Northside

$250k would buy a house like the one pictured on the right

Neighborhood- Bellevue

Year Built- 1928

Sq. Ft- 1,855

3 Bedrooms, 2 Bath

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Zone 60- South of the James River

$250k would buy a house like the one pictured on the right

Neighborhood- Westover Hills

Year Built- 1959

Sq. Ft- 2,418

3 Bedrooms, 2.5 Bath

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There were no properties sold within the last three months in this price range for Area 50 in the City of Richmond.

As you can see, $250,000 will get you a 50-80 year old house with around 2,000 square feet, three bedrooms and two bathrooms.  Next time I will focus on what you can get in the City of Richmond for $350,000 and $500,000.

Area 20 List vs Sales Price

In my last post, we saw how over the past several months, the three month trailing average for the list price and the sale price were pretty much in line for Area 10 (Fan) in Richmond.  To the right you can see the same data, on a shorter time line, for Area 20.  Area 20 includes Windsor Farms and much of the area in the Near West End the including Libbie and Grove area.  The chart to right shows that this part of Richmond, though one of the most desirable, still has some work to go before the average list and sales price line up as in Area 10.  The good news, from a reaching of the bottom of the market perspective, is the average list price has decreased for 3 consecutive months while the average sale price has increased over the same time period.