Zion Crossroads Providing Much Needed Commercial Development
July 18, 2007 | Leave a Comment
Anyone who lives east of the Charlottesville/Albemarle area, knows all too well the drive into Charlottesville. For decades, residents of Fluvanna and Louisa especially, have made the drive into Charlottesville for dining, shopping, recreation, etc. That may soon be changing.
Zion X Roads (the area where Rt. 250, Rt. 15 and I-64 intersect) is quickly developing into the next major regional commercial location. There have recently been a few news articles regarding the planned development, which I will be covering in a few upcoming posts. On the horizon for Zion X Roads is a new Best Western Hotel (opening August 1), a Super Wal-Mart, a Lowe’s Home Improvement Center, an upscale outlet mall, and plenty of other retail and office space. Combine all of this with what already exists in that area, including the growing community at Spring Creek, and Zion X Roads is sure to offer area residents a viable alternative to traveling into Charlottesville. It may also attract people out of Albemarle and away from the south side of Richmond, now wouldn’t that be a feat!
Time will tell how the development at Zion X Roads will affect the Charlottesville area, but one thing is for sure– it is an area whose time is long overdue.
[tags] Charlottesville, Fluvanna, Louisa, Virginia, Realtor, commercial development, Zion Crossroads, [/tags]
If You Want to See Things Clearly, You Need to Get the Right Angle
July 11, 2007 | 1 Comment
Summer time, being the basketball off-season, is the time for officiating camps. A few weeks ago I attended a great camp that I have gone to for the past few years. It is put on by my college conference supervisors, and the knowledge that I gain there every year has proved most valuable as I continue in my officiating career. Every time I hear something interesting in camp, I always wonder how it might also help me in my career as a REALTOR. Something I recently read prompted me to think back to one of my recently learned officiating lessons. . .
Michael Cook, a contributor at the BloodhoundBlog, wrote an interesting post regarding what industry people are saying about a likely timeframe for a real estate market recovery. His post was interesting to me because it provided differing perspectives on the national real estate market. The reason that his post made me think of basketball officiating is because both real estate analysis and basketball officiating rely heavily on “perspective” for success.
Successful basketball officiating, at its very core, is about perspective. In officiating, we refer to it as “getting the right angle.” No matter how well you know the rules, if you have a bad angle on a play, you can’t see it, and you are doomed to fail. Typically, the reason that a call is missed in a game is not because the official is incompetent, but because he or she usually failed to get the best angle on the play and couldn’t possibly see it entirely. The proper perspective is paramount to officiating success.
Perspective is equally important in real estate. This is especially true when you are talking about analyzing the real estate market. As the popular saying goes, “all real estate is local.” This means that what may be true in one area isn’t necessarily true in another. It is a matter of your perspective. I imagine that if I started talking to a REALTOR from New York City, we would have different takes on the current state of the real estate market because of our different perspectives.
Perspective is an important thing to think about when sifting through real estate advice or analysis. You need to know the perspective of the person doing the analysis. Is this person a builder? an investor? a REALTOR? Where is the person located geographically? All of these questions help establish a person’s perspective. Once you can do that, you can look at their opinion through the prism of your own perspective.
Know the perspective, get the angle; doing this will give you a much more complete picture of the issue at hand.
[tags] real estate, realtor, charlottesville, virginia, analysis, perspective [/tags]
Charlottesville Real Estate Market Takes Big Hit in June
July 9, 2007 | Leave a Comment
It is time to take a look at the June sales statistics for the Charlottesville area real estate market. Overall, the stats did not look good. The drop in June sales compared to last year was significant in every geographical area, and the year-to-date stats reflect the drag that June created. Let’s take a look:
June 2007
June 2006
Breakdown:
June was a tough month for Charlottesville area real estate. Every geographic area posted major losses compared to June of 2006. Area sales were down 41% overall. Charlottesville was the big loser (-57%), Fluvanna and Nelson each saw a 43% drop in sales, and Albemarle and Greene each saw a 33% drop in sales.
News on the median home price was mixed for June. The area was way up (20%), but the median in Fluvanna and Greene Counties lagged behind that of a year ago.
YTD 2007
YTD 2006
Breakdown:
June was not a good month, and the year-to-date statistics reflect that. The Charlottesville area is now 23% behind the sales pace set in 2006. The hardest hit areas are Charlottesville and Greene, down 35% and 36% respectively. Fluvanna is down 19%, Nelson down 25%, and the lone bright spot (if you can call it that) is Albemarle County, which is down a relatively low 14%
While Albemarle might be leading the way in sales, it is falling behind in median home price. The median home price in Albemarle is down 5% compared to last year. Nelson County is the only other area where the median has fallen (-4%). The median in Charlottesville has risen 15%, probably due to the lack of low-price condo sales, which is the same reason for massive sales losses in the City. Fluvanna and Greene Counties have each posted modest gains in median home price of 5% and 6%, respectively.
I took a look back at the June stats that I posted one year ago, and June was a rough month in 2006 as well. If you are wondering why those stats are a bit different than the June 2006 stats I posted today, it is because not all of the closings had been entered into the MLS at the time of the publishing. That is why I now wait a week or two before posting the stats.
It appears that the downturn in the real estate market shows little sign of easing any time soon. Sales continue to fall, and inventory continues to rise. Hopefully, July will be able to provide a bit of a comeback after a June that was difficult to stomach by any standards.
A Value Proposition
July 2, 2007 | Leave a Comment
The question that I get asked most often as a REALTOR is, “What is my home worth?” Obviously, this is an important question. Everyone is interested in the value of their home. They can be interested in it for a number of different reasons, but people are always interested. In a day and age where the news cycle is measured in minutes, not days, and you can get just about any piece of information that you want in seconds (thanks to the Internet), people expect the answer to the “what is my home worth” question to be simple. That isn’t always the case. The answer is– it depends.
I’m not saying that to be facetious. The way I see it, there are at least 5 different types of value that can be placed on a home. Depending on which one you are seeking, the numbers might be different. Let me introduce you to the 5 types of home value, and then explain each one in more detail: appraised value, assessed value, replacement value, market value, intrinsic value.
Appraised Value: Most people have had some experience with appraised value. In short, the appraised value of a house is the value assigned to a home by a professional appraiser, usually for the purpose of a bank loan. The appraised value is the value that the bank uses to determine how much money they are willing to lend to someone who is using the house as collateral. The bank must assign a value to the house to make sure that in the event that the borrower defaults on the loan, the collateral will cover the loan. Of course, appraisers conduct appraisals for other sources as well, but this is the most common one.
Assessed Value: Everyone who owns a house, with or without a loan, is familiar with the assessed value. The assessed value of a house is determined by the local government. This is done in order to determine how much the owner should be paying in property taxes every year. The government conducts assessments of all the properties in its jurisdiction and then uses those values, coupled with a tax rate, to tax the owners.
Replacement Value: This is the value that is often used by insurance companies. Basically, the replacement value of a house is exactly what it sounds like. It is the amount of money that would be required to replace the house if it were to be destroyed. This value doesn’t take into account the value of the land, since land is irreplaceable.
Market Value: This is the value to which most people are referring when they ask the question, “what is my home worth?” Market value is the amount that a buyer is willing to pay for the home in an open market. Market value is what people are seeking when they sell their home. The market value of a house is determined jointly by the buyer and the seller through negotiation. The list price of a house is the seller’s first guess at the market value of the house. It is only through the open market and a successful sale that the market value can be definitively determined.
Intrinsic Value: This is a term that I have come up with to describe the value of a home based solely on the desires of the owner. Everything is worth something to the person who owns it. That value is intrinsic to the object, and might even change if it were owned by another person. If you want to think of it in simple terms, ask yourself this question: “even if I didn’t want to sell my house, if someone knocked on my door and wanted to buy it, how much would I charge?” That is your home’s intrinsic value. Everyone’s answer might be different. For some, they would not sell at any price.
Understanding value is important in the real estate market. It is especially important to understand that the numbers assigned by the different types of value might be different for the same property. One example: you are going to sell your house. Your taxes are based on an assessment of $350,000 (assessed value). You want to sell it for $400,000 (intrinsic value). After 6 months on the market, someone brings you an offer at $325,000, and you eventually ratify a contract for $340,000 (market value). Your buyer’s bank comes in and conducts an appraisal and assigns a value of $345,000 (appraised value– a good thing for them). The buyers then go and get homeowners’ insurance for yet another value, the replacement value.
That is just one example of how the different types of value can interact during the average real estate transaction. Knowing the different types of value and how they can affect you is important. Having some knowledge of value before you sit down with your listing agent for the first time might even make the entire process go a bit smoother.
[tags] real estate, realtor, charlottesville, virginia, value [/tags]
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Disclaimer
My name is Daniel Rothamel. I am a licensed real estate agent in the Commonwealth of Virginia and a member of the National Association of REALTORS. As such, I adhere to a strict code of ethics and all laws with regard to equal housing, which is reflected in the content of this blog. My broker is Strong Team REALTORS, 86 Joshua Lane, Palmyra, VA 22963; (434) 589-5800. My VA Real Estate License number is 0225 077325. All of the opinions in this blog are mine, unless otherwise noted.
