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What The Heck is Going on In the Market?

Reflections from Today's Open Houses

I've got a number of posts in the hopper, but after today's open house I feel compelled to slap up something immediately. 

Mainly because I feel like this year so far has been...strange, and today's activity sheds some light on what is a really wack-a-doodle (the official and technical term) market. 

So here it goes.

I have two brand new listings that just came on the market yesterday, and I held them both open today, with the help of my listing manager and assistant. 

• I was at 3023 Fendall (MLS #1504833) with Brooke.

• Mike was at 3119 Barton (MLS #1504829). 

Both of these listings are in Ginter Park Terrace, in the Northside of the City of Richmond, Area 30 in real-estate-agent-speak, in an area lots of people are calling "Battery Park," even though Battery Park is a specific sub-neighborhood.  Both houses are whole house renovations, or "flips," by the same very experienced investor.  Both houses are tax credit renovations with three bedrooms, two and one half baths, with an en suite master, significant tax abatements, and priced at $199,900, a first-time-buyer entry price point.

Northside has been going CRAZY in the last 18 months to two years, at least, with the past six months being particularly frenzied.  Unfortunately, the area had lots of foreclosures in the downturn.  Fortunately, that has lead to lots of investor activity, meaning lots of flips.  Many of the new buyers in the area are first time buyers and Millenials. 

At an open house I always try to get people to sign into the sign-in book, so

(i) I know how many people came through the house;

(ii) I get information about how the prospective buyer heard about the open house, whether they're working with an agent, when they intend to buy, etc.; and

(iii)  hopefully I can pick up some new buyer clients.  I'm uncomfortable being too pushy about the sign in book, so generally there are more than a few people who don't sign in at all. 

As an aside, that sort of sucks, because I am trying to track how much traffic I get through a house in order to give my seller comprehensive feedback.  I also take notes in Evernote and try to identify all the people who come through the house. 

My notes look like:

"Karen and ____, gentleman in black long-sleeved shirt with beard and NCSU baseball hat, need a yard and want basement (2)." 

I try to describe the people so I can remember them, and the parenthetical number is the number of people in the group.  I'm good at faces, terrible at names.

Here's a copy of the sign-in sheet I use.

Now, here are some interesting things from the sign-in book at Fendall today:

  1. In my Evernote tracking, I had thirteen"groups" come through the house.  Of that thirteen, ten signed in.  That's a pretty decent percentage.
  2. Of the ten that signed in, six indicated they are working with an agent, and five of those six listed the agent's name.
  3. When a buyer lists an agent, it typically means they really are actively working with that person, not just checking the box so the annoying listing agent - me! - doesn't contact them.
  4. If a prospective buyer is working with an agent, they really are a ready, willing and able buyer, looking for something to buy in the immediate future, and not a "tire kicker" or a "looky-loo," also technical terms. [Wink]. 
  5. For 60% of the sign-ins to be actively working with an agent?  Well, in my experience that's a pretty high percentage.
  6. Five sign-ins learned about the open house from the internet, four from the newspaper, and one from their real estate agent.
  7. Three of the sign-ins said they heard about the open house from Redfin, which is an all-online brokerage based on the West Coast that has never, to my knowledge, had a Richmond, Virginia presence.
So, what does all of this mean? 
  • Most of the traffic was "real" buyers.
  • Those real buyers are actively looking. They are ready to buy.  They're just waiting for the right house.
  • Newspaper advertising for open houses still has some value, even as more and more peple get their information from the internet.  Too bad for me, because newspaper advertising is expensive!
  • Redfin must be moving into the Richmond market.  I don't know much about Redfin, it's an all online brokerage with some percentage of commissions "rebated" back to buyers.  All agents are reviewed online, and agents are somehow compensated based on their reviews.  Sounds a little bizarre to me, basically a discount brokerage model, but for buyers, with an online review component thrown in there.  But interesting that it's apparently made its way to Richmond. 

Millenials are getting into the market with a vengeance. 

Interestingly, they all seem to want to buy a completely done house.  They want to live in the city, which is going to be mainly old houses, because they want to be able to walk/bike places, and to be close to Downtown and other City neighborhoods if they have to drive. 

But they want the house to be shiny and new and move-in ready with the Pottery Barn/Restoration Hardware "look."  So areas with a lot of flip activity where prices are still in the typical first-time-buyer price range - North Church Hill, Battery Park, Byrd Park, Maymont - are super-hot right now. 

I don't see that changing, as the demand has been pent-up for years.

It's going to be an interesting Spring.  Everyone, hold on to your hats, and get ready for a wild ride.

- Melissa

(804) 986-3993
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