Very interesting stuff. I am sitting here in the office at almost 7 P.M. on a Tuesday night, and I decided I should check out the inventory in the Fan and Museum District. So, I ran a rough search, for active listings in 23220 and 23221. That is broader than just the Fan and Museum District - it includes Randolph, Maymont, Byrd Park, Carytown, the Carillon, and Oregon Hill - but once I sort those neighborhoods out, I get what I am looking for. Here are the stats:
1. There are 34 total available Fan properties, priced between $295,000-$1.89M.
2. There are only 5 available properties priced under $400,000. In fact, the price range is $295,000-$339,950. Then there is a big jump up in price, the next listing is $419,900.
3. There are 5 more properties priced between $400,000-$489,000. The next available listing, No. 11 in the Fan, is priced at $519,000.
4. There are 9 properties listed between $500,000-$600,000.
5. There are 15 properties listed above $600,000. Of those, 13 are priced between $600,000-$829,000, with the vast majority of those priced between $600,000-$700,000. There are two properties priced over $1M, one is the Grace Manor Inn at 1853 Grace Street, priced at $1.195M, the other is the Binswanger Mansion at 2230 Monument Avenue, priced at $1.89M.
So, there are 10 active listings TOTAL priced $500,000 or less, and 24 priced $500,000 and above. Why such a disparity in the available inventory? I have some thoughts, just based on what we're seeing in the market.
- The average buyer of a $500,000+ house has a home they have to sell. Maybe those sub-$500,000 homes aren't selling so well in other parts of the Greater Richmond area, or outside of our market.
- Is it possible those $300,000-$400,000 have-to-sell-to-move-up homes are still under water?
- Or is it that lots of people that own $600,000+ real estate in the Fan are selling at the same time, because they are downsizing Baby Boomers, moving to smaller homes or condominiums?
I think it's quite possible that all of these various factors are in play. What is the moral of the story, if you are a buyer or a seller?
If you are a buyer in the sub-$500,000 market, you need to have a prequalification letter in hand, and you need to be ready to jump on something the minute it comes on the market. If you wait the three days for it to show up on Trulia or Zillow, it will probably be gone. And recognize that it's a SELLER'S market. You will need to offer full price or more, with as clean a contract as possible.
If you are a buyer in the above-$500,000 market, you have a lot more choices, and probably some negotiating power - although don't get all crazy and think you're going to get a 10% discount off the list price. Sales price to list price ratios are still very tight, averaging above 97%.
If you are a seller with a $500,000 or less home to sell in the Fan, get it on the market NOW. There is a huge amount of demand, and very limited inventory. Changes to the lending regulations coming August 1, 2o15 may mean a smaller pool of available buyers. Interest rates could rise, keeping people on the sidelines.
If you are a seller with a $500,000+ home, and particularly one priced $600,000 or over, you need to make sure your home is in as pristine condition as you can get it before you list it, you need to have gorgeous professional photography, and you need to price it to stand out from the pack. Don't push the limit and get greedy. Pigs get fat, hogs get slaughtered. Price your house 5% below market, let the market push the price, if it's justified, and generate a quick offer.
I'll take a closer look at the Museum District later this week. As always, comments, thoughts, suggestions, and constructive criticism are welcome. I also take suggestions for possible topics. Thanks for reading!