First and foremost, these boxes are great, and I can’t imagine my job without them. In terms of functionality, they rank super high in the customer satisfaction ratings. If you ask agents if they like them, they probably don’t even think much about them, because they just plain work… almost all the time.

A primer on how these boxes work. There are two parts to the lockbox, There is the lockbox itself which stores the actual key for the house and stays attached to a doorknob or rail. The other half is the actual key that agents carry with them. When an agent arrives at a listing, a passcode is entered into the key and it communicates via IR technology to the lockbox which subsequently opens. The key then stores the lockbox serial number in its memory along with a time stamp. Each evening, the key must communicate via either computer or phone line with GE who takes that serial number and time stamp and alerts the listing agent of who showed which house and when.

Then, Nest collects that data from GE and puts together the trendline info you saw in the article. But there are some real limitations to the information.

Agent cooperation: The key that is used to open the lockbox is sometimes a smart phone, and sometimes a little black box like the one pictured here. When it is a phone, no problem. The phone automatically updates pretty much instantly that the house is being shown. But… if the little black box is being used, the agent needs to take some action for the upload to occur. Let’s say an agent shows a listing, but doesn’t go out for another week or so to show more clients. That agent doesn’t NEED to update their key, and so the info takes as much as a few weeks to update. The listing agent finds out 10 days later that their home was shown. And our data gets updated 2 weeks late.

Workaround: We looked every week for several months at the weekly data. We compared Week X data at the end of the period, a week later, two weeks later and so on out about 2 months or so. What we found is that at the end of the week, as few as 60% of showings are accounted for. BUT, within 2 weeks, roughly 95% of showings are in the system. So, we just ignore the most recent two weeks. We start paying attention about 14 days out. As more and more agents are going smart phone, the time delay is going down.

Agents opening boxes, but not showing property: You may not think this is a problem, but it is. Remember, we can’t see what boxes are being opened, or by whom, or why. So, an agent who is listing a new property may very well be in his office and open a lockbox to check that there is no key inside. He then may go to the house and open it again to insert a key. He may then go back with a photographer, or a contractor, or a floor plan artist. The house still isn’t listed, and a lockbox associated with it has been opened 5 times.

Now, think about the other end. When a house sells, typically a buyer looks at a house multiple times, then puts in an offer. After under contract, the buyer goes back for at least one inspection. Plus a contractor to price repairs. Plus the termite inspector. Plus the listing agent getting the key out. Again, this is 4 openings of a lockbox that do not count as a showing. All AFTER the contract is written.

How about the listing agent. On a vacant property, a listing agent might check the property as often as once every other week. Again, openings that don’t count as showings.

So, what is the trendline good for? Lots. All these openings that don’t count… They provide us with a baseline. Even if no one shows a single house in all of Charlottesville, there are still going to be some openings. You just get used to this. So what we look at is not the actual number of openings, but the change in that number from period to period. We are looking to see if showings are up or down from last week to this week and from this time last year to this week this year.

But, because there is a baseline, and we can’t know EXACTLY what that number is, it means that a 5% shift is really MORE than a 5% shift. Up or Down.

Take the change from the weeks of Sept 1st to the week of Sept 8th. The lockboxes showed a decrease from 1390 to 1299, a decrease of 6.5%. BUT, if the number of those openings that wasn’t really a showing was say 400 in each period, then the real shift is from 990 to 899. And that difference is 9.2%. However, it is easier and more consistent for us to just use the actual numbers than for us to try and determine what the “true showing value is” plus… we’d never get it right.

Hear what our residents have to say about living at RiverBluff and why the chose to live there.

Loyal readers will know that I have an affinity toward neighborhoods that do more than put folks in houses in close proximity to one another. I like neighborhoods that create communities. Neighborhoods that stand for more than just roofs over heads. I like places like RiverBluff. And I am proud to say that, thanks to one of Nest’s newest associates, Laura Winn Smith, she and I now represent such a place.

RiverBluff is a quiet little circle at the end of a cul-de-sac. (Yes, I have written about cul-de-sacs in the past.) It fronts the Rivanna River and the Rivanna Trail. It was a wonderful piece of land of just 19 acres. And thanks to thoughtful planning and a directed vision from the start, RiverBluff now has 9 homes, 1 home under construction, and 12 lots available for building. And of that 19 acres, more than 15 of those acres are still available for use by the community.

Those 15 acres are trails, and playgrounds, and community space. The land has been conserved rather than consumed. Pedestrians and visitors to the Rivanna Greenbelt portion of the city park system are still able to enjoy this land. And the residents of RiverBluff are richer for that community.

RiverBluff is more than just clustered houses. As I said, it was built around a vision. That vision is that land and homes do not need to overwhelm the environment. So, the houses are built to the highest of standards of sustainability. From green roofs to greywater waste systems. From super high efficient insulation to geothermal heat pumps. These homes are designed to impact the environment as little as possible. And the end result are buyers that don’t just “buy into” the vision, but live it out.

Rainwater gardens, community composting, active biofilters… all of these are intentional and desirable. And the beauty of the vision is that it does not require a specific style of home, just a consistent intent. Some of the homes are traditional, others are modern, but all are responsible.

RiverBluff and communities like it are the types of places that Nest Realty wants to work with more. We are proud that we have been selected to market RiverBluff, and I am proud to put my name on the sign out front. And many thanks to Laura Winn Smith who is working with me on RiverBluff. What a wonderful partner and what a wealth of information and energy.

I hope that as Spring arrives and this arctic tundra in which we live retreats, that many of you will make the drive down Market Street and Riverside Avenue to RiverBluff.

Founded in 1982, Summit Realty grew to be one of the most well-known and respected real estate companies and brands in Central Virginia. Owners Bob Hughes and Bob Headrick took over Summit in 2007 and are enthusiastic about joining forces with Nest Realty as Associate Brokers.

In addition to a strong focus on technology and innovation, Nest Realty agents are held to a higher standard. All agents must have a minimum of three years experience, practice real estate full-time and earn their Broker’s license shortly after joining the firm. With almost $4.7 million in sales per agent and 13.75 transactions per agent, Nest Realty agents more than doubled the production for the average Charlottesville Realtor in 2009.

“We pride ourselves in having a team comprised of exceptional professionals, said Kauffmann. “We want consumers to know that if you work with a Nest agent, you are working with a true, full-time professional with high ethical standards. To date, we have had an extraordinary team; the addition of the Summit agents only enhances our strength. The combined experience and track record of Bob Hughes, Bob Headrick, and their entire team is a wonderful addition to the Nest family. We couldn’t be happier.”

Rather than try and give you a long post, I’ll just tell you to grab the full report from the Report Downloads page. This is by far the longest and most extensive Nest Report yet. Let me know if you have any questions about the current issue.

2009 Year End Report

Fair question.

I have in front of me a 56 page document that was just released by CRA International, a national research organization that studied the HUD-1 costs across the country and tried to determine how much extra buyers spend on attorneys instead of going straight to the title company and closing it with them.

The argument that settlement companies have made is that attorneys are expensive and unnecessary for these transactions. Without competition, attorneys would force the price of home loan settlement sky high and the consumer would be punished. The attorneys argue that in fact it is the title companies that keep prices high. They claim that title companies may charge less in the form of a “closing fee” but they more than make up for that discount in the price of the insurance policy that they offer consumers. Attorneys are able to price title policies from different companies and that brings price down.

The study looked at 839 financings that occurred in a single 12 month period, and included 366 new home purchases and 473 re-fi’s. In the case of re-fi’s, there are occasions when the lender actually performs the closing. So, in Virginia for instance, 50% of the cases studied were closed by settlement companies, ~30% by attorneys and ~20% by the lenders directly. Across the entire study 60% were closed by settlement companies, 17.4% by attorneys and 22.7% by lenders.

The empirical evidence is that the attorneys are correct that title companies charge more for their policies, but they are wrong that it always costs more overall. The study showed that in states where Attorneys handle all the closings by law and the states where settlement agents are dominant the charges are roughly equal. There does not appear to be any influence that regulations have on the costs of closing a loan. In states, such as Virginia, where consumers have a choice, the numbers that make up the total for closing costs may be different, in the end, the costs are roughly equal.

The CRA study found that “High or low closing costs appear to be at least equally – and frequently more strongly – associate with a wide range of other factors (such as details of the loan, the characteristics of the state or loan area, and the characteristics of the borrowers);” Translation: While different loans cost different amounts to close, it is based on size of loan, credit score, local taxes (GRANTOR TAX!!!) and other factors, not who the settlement agent was.

So, what does an ambiguous study tell us about how buyers should choose their settlement agent? Very little. Instead, it says that the price conscious buyer isn’t going to save money. So the question that a buyer needs to ask is, “How will I best be served?” Given that settlement companies are not allowed to act as attorneys or provide legal advice in the case of legal issues arising, my advice is to stay with a local attorney who can represent you if you need it. The cost of bringing a lawyer on board down the road is much higher than having them with you from the start.

Builders operate in much the same way. The problem is that a project must go to the city or county months or years before construction begins, and that can be 6 months or more before the first buyer can occupy the residence. Therefore, there is always the risk of over building a certain type of home. Below you will see a graph by quarter from 2003 to Present for the combined Charlottesville and Albemarle markets. Each line represents a product type: Detached, Attached, and Condo.

(Click on the graph for a larger image.)
The quickest thing most folks will notice is the enormous bump that occurred in the 1st quarter of 2005 when the first condo conversions became available to the general public. The condo market was steady until it got another bump mid year 2006 and then slowed until the end of 2008 when it hit the skids.

This is a fascinating tale of what the right project was to work on then… and not now…

Builders watched as the early developers sold their stock quickly, but trends shift, and the developers who brought condos on the market at the end of 2008 were greeted with credit issues as well as an over built market.

Contrast this with attached homes which saw a bump in prevalence just as condos were slowing. While I cannot state for sure that I know what was happening, I do have a theory here. Detached homes tend to be the priciest of the three product types. Therefore, those who may not be able to afford the 3BR/2BA home on a 1/2 acre in the county look to more affordable options. Those options tend to be condos and townhouses. When credit became impossible to get on condo projects, the attached home was the only solution.

But, take a look at the last 3 quarters where detached homes have grown in popularity even while attached homes fall off sharply. This coincides with the convergence of prices across the different product types. For the first 9 months of the year in the city, the median home price of a townhouse was $242,000. But the detached home price median in the city was only $261,000. A difference of only $19,000. That’s just over $86 month in mortgage payments on an 80% loan.

So what does product mix tell us about the future market? It says that as long as the price between detached homes and their counterparts are small, the detached homes should continue to rise as a percentage of the sales. It also reiterates that we need financing to be eased in reference to condo projects.

This quarter is certainly no exception. The report expanded by over 100%. I have included far more information on condos, attached houses, and general macroeconomic conditions. The same information as in the past is available for the detached homes. All in all, I’d say it is the most comprehensive analysis available. Of course, I have a bias.

For those who wish to read the report, click here to grab a pdf version. I will be pulling out some items over the next few weeks to publish some more in depth items. Hope you enjoy.

Click here for the report.

WE WON!

Immediately, my phone rang. It was my other partner, Jim Duncan. “Dude, we won. It’s all over Twitter.”

Frankly, I didn’t believe either of them. It was too good to be true, and, after all, Nest is only six months old next week. But it was true. And over the past few days I have gotten excited and downright giddy. I have wondered if I was dreaming. I have bragged. But as of today, I have begun focusing on a different side. It is our reminder that we have accomplished much, but we still have a long way to go, and we can’t rest.

What we won was unexpected, but much appreciated. Nest Realty Group was named Most Innovative Brokerage in the country by Inman News, the real estate industry’s leading news source. Each year, at their annual “Inman Connect” conference, they select one brokerage who is changing the way business is done and honor them. Additionally, they recognize bloggers who are having an impact, service providers, and overall market innovators. But this year, it was Nest who came out on top.

This is not an honor bestowed upon new and up and coming firms typically. In fact, the firms who were finalists with us are some of the most well respected firms in the country.

• Redfin – The leader in Internet based real estate transactions
• @Properties – An eight year old firm with the #1 market share in the Chicago MSA
• Better Homes and Gardens – An international franchise company
• John L. Scott – A 75 year old brokerage with offices throughout the Pacific Northwest
• Coldwell Banker – 3,900 Offices across the globe from a firm founded in 1906.

And, Nest Realty Group, a company of 6 agents founded in Charlottesville just six months ago.

So, why did we win? A number of reasons. Inman cited our web site as the number one reason they believe we are changing the face of real estate. What is different is that the web site provides information and a customer search in a way that actually provides value. There are neighborhood synopsis over over 175 neighborhoods. There are videos of many of these areas. There are searches based on amenities, not just price. There are searches by area, not just county.

It is not that the web site is so dramatically different that brought us to the judges attention. It was that the web site was the end result of a firm founded on the principals of transparency and customer centric service. This is not a web site designed to keep the information in the hands of the agents. We offer the most comprehensive quarterly updates of any real estate firm I have ever seen, regardless of size. We are different in our willingness to not just utilize social media, but to embrace it.

In marketing properties, we are the only firm in Charlottesville that provides customized signs. We offer video on every listing. We offer professional photography. We offer floor plans. Some of these may not be high tech. And I certainly concede that there are other agents who offer some of these items. But only Nest provides it for every listing, regardless of the agent. It is who we are, not just as individuals, but as a team.

And for that team, I am eternally grateful. I am proud of what we have accomplished.

Jonathan and I had a chance today to talk for the first time face to face since he returned back from InmanConnect in San Francisco. And the first thing we discussed was what we would improve, and what we wanted to plan for the next year. I have spent this evening searching out partners for some of our plans. And I can’t wait to start implementing.

And, I’m happy to admit that having our Inman trophy around IS pretty cool.