3rd Quarter Nest Report

Each quarter, as I hunker down with numbers, I get a little more ambitious. At the end of the process, I think, “I hope I didn’t include too much.”

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.

Holy Cow

I was in my car and on the way to a lunch appointment, and I got a text message from my partner, Jonathan Kauffman on Friday at 12:17 p.m. It was, as most text messages are, short and to the point. It read.

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.

inmanlogo.jpgWhat 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. InmanTrophy.jpg

School Districts – Where’s Hot?

Everyone wants to know what school district is the best. Of course, this baits the question, “What does ‘Best’ mean?” Some folks look at test scores, some look for diversity, others look for excellence in the sciences, and yet others look for excellence in the arts. “Best” is a fully subjective word that can apply to any and all schools in some way. It all depends on what the resident is looking for in a school.

I wanted to look at what school districts have homes that are selling the best, and so I looked not at price drops, but at the ratio of homes listed to homes sold. Seemed simple enough. And the results were not quite what I expected. I have buyers who ask for specific school districts all the time, and that request is based typically on a desire to stay in a district or it is driven by school test scores, or proximity to work, the interstate, or some recreation in which the family regularly partakes.

I’ll talk about the City first, as I found the results really interesting. (Click on the below graphs to expand.)

What I have done is created a graph of all sales in the city by elementary school district. Having only 6 schools makes this very easy to visually see what is happening here. The second pie chart shows all the active listings in the city as of today. By comparing these two charts, we can see if there are districts that contribute to more sales than they should based on the number of properties listed, or vice-versa. The first thing to note is the green section, which relates to Clark. This includes all of Belmont. While 25% of the current listings in the city are in Clark, only 19% of the sales are from this area. It follows logic to say that perhaps Belmont had its run-up during the Bubble, and is now retreating more than other areas of the city.

The flip side of that coin are Greenbrier and Jackson-Via which had 4% and 14% of the city listings respectively and yet have contributed 8% and 20% of the sales in the city thus far this year. Both of these areas are relatively affordable, with Jackson-Via’s median being only 1.5% above the median for the city. Greenbrier is priced higher (18% above the median), but still 8.5% below the pricy Venable district. Given that 71% of the houses sold this year in the city were sold for less than $325,000, this demographic seems right on target for the year.

City Sales by Elementary School

The county was equally interesting. However, with 16 elementary schools, the graphs get a little harder to read. There is however, one clear winner district this year, and one or two districts that have struggled.

On the high side, Cale Elementary is showing a lopsided number of sales compared to its listings. Again, with a median sales price below $300,000, this puts it squarely in the target for 2009 buyers. Additionally, as we have pointed out over the last year or so, homes in the urban ring have fared better than far out in the county. Cale is located on the city border to the South, and is convenient to The University as well as downtown. Neighborhoods such as Lake Reynovia and Mill Creek have managed price declines with some resistance and it appears that location, location, location may simply be playing out here.

The downside districts in Albemarle include Stone Robinson, which is home to Glenmore and the parts of the Keswick area. With the third highest median price in the county, these high end properties just aren’t having a banner year. Homes between $600,000 and a million dollars represent only 14% of the homes sold this year. Stone Robinson had 16% of the active listings. They just can’t keep up with the market. The demand is simply not there for the larger, new homes in 2009.

Albemarle County Sales by Elem School

In the wine world, we talk a lot about wines with a good QPR or Quality to Price Ratio. In 2009, we are seeing a similar flight in sales. Lower priced homes that offer convenient locations are ruling the roost. If energy prices soar again (which they certainly look like they could) this directive could become even more pronounced.

As always, I welcome comments and thoughts as well as requests for future studies. These are always interesting looking into.

Mid-Year Report – Condos

On Friday, we put the finishing touches on the Nest Report, Nest Realty Group’s Midyear report. (For a pdf version, click here.)

One of the interesting things that we started talking about in the office was the future of Condo projects in and around Charlottesville. From the Nest Report:

Both City and County condominium sales continue to slide as well. There have been a total of 32 condos sold in the County so far (off 25.6%) and 25 sold in the City (down 46.8%). However, Charlottesville City condo sales rebounded quite well in the Q2 2009 with 22 total sales, bouncing back from a dismal Q1 which saw only 3 transactions close. There are still condo projects in front of the City Planning Department with the potential for near-future development. Whether or not those projects can obtain funding, and when they will be built is still up in the air. Additionally, we fully expect the absorption rate (time it will take for new condos to be purchased) to be lengthy compared to years past, as some of these projects are approved to include more housing units than have sold across the whole city this year.

I thought I would expand a tad on what I said in that last sentence. There are some projects that have been approved that include more units than have sold in the last year. This is absolutely the case, and its not a small number. I called the city asking for a current “development report” and they have not put one together in the last 15 months. So, what I have is not on the newer side, but the projects that haven’t been built yet, are still lingering out there with approvals ready to go.

200907201710.jpg

The only major condominium project downtown that is under construction at this point is The Gleason. According to the most recent City report, the Gleason was approved for up to 65 units. The Gleason web site shows 36 residential units are being built, along with two floors of office and two (partial) levels of retail space. Of the 36 residential spaces, 16 are shown as sold, leaving 20 units, 80% of the city sales thus far this year. In addition to The Gleason, other projects in the downtown area that are approved by the City are:

  • Comyn Hall Condos – Approved for 11 units – Park and Parkway
  • Waterhouse – 65 Units – Between Water and South Street
  • The 550 – 12 Residential Units and 10,000 S.F. of Commercial located on Water Street in the old train station. (7 of the units are priced at $1.195 million for the shell)

Projects that have gone before the planning commission, but whose outcome has not been updated by the Neighborhood Development Services on their web site include:

  • Grove Square – Applied for 24 Units – Rosie Brown Blvd and Grove, along the RR Tracks
  • Coal Tower Property – Applied for 287 Units – Running the North side of the RR Tracks from Carlton to 10th Street
  • Sycamore 10.5 – Applied for 16 Units – On West Main in the old Under The Roof location
  • 201 Avon Street – 100 Units – The old Beck-Cohen building
  • The Station – 25 Units – Across from the Gleason on Garret Street

And this listing is still partial, and focuses only on the area in downtown. Further, it does not touch on the condos that have been built and have not yet been sold. Condo sales can be driven up by a great project, but the buyers have to be there to make these projects make sense. The Beck Cohen project for instance was once announced to be a LEED registered project. With 100 units on the line, a developer is going to need more than 70 reservations / contracts for sale to make this project move forward.

Most likely, what you will see is a few of these projects getting built in the next few years, but they will be scaled back. It would not surprise me to see the Gleason be the last condo project of its size built for at least 3 years. Other projects are going to look for smaller footprints, lower costs, and easier break-even points. And even then, developers are going to be looking for enough contracts to guarantee they won’t lose money even in the worst case scenario.

——-

2009 Condos sold Jan 1, 2009 – June 30, 2009

8 in 1800 JPA
3 at Monticello Overlook
2 at The Randolph
1 at McGuffey Hill
5 at Walker Square
2 at Cream Street
1 at Belmont Lofts
2 at Melbourne Park
1 at Wertland Commons
1 at The Corner Village  
and 1 at The Economod Condo

(NOTE: There are 27 condos listed here. The Nest Report states 25. The difference results from Realtors who input sales late. We pull data for the Nest Report on one day to write the larger report. However, the information here was pulled today, July 20, 2009.)

Albemarle Price Per Square Foot

As requested from a reader on the Bubble Blog, I have pulled 2009 prices for detached homes in Albemarle County by month. I have to say, I don’t think there is much to see here. There have been a total of 213 closed transactions in the county of detached homes through May of this year. Based on the variability here, I would not take any stock in this meaning much at all.

Alb_Pr_SF.jpg

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