February 2018 Newsletter
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2018 Review and Thoughts on 2019…
If you regularly follow my quarterly reviews, you aren’t surprised by what the recently released Charlottesville Area Association of Realtors market report said about how 2018 ended.
Here is what I shared right before the CAAR market report was released
The good news is 2018 finished a bit better than the previous year. The bad news is because of the strong start over the 1st five months, it did so even though the last few months of the year were a bit sluggish.
The number of sold properties in October-December actually decreased compared to the last quarter of 2017. The other troubling statistic is the number of pending sales (homes that went under contract but haven’t settled) were also off versus 2017 for the same time period. This does not bode well if you are hoping for a positive housing report at the end of March of 2019. One segment of the market that could offset this decline in homes sold is there will many new homes that went under contract in 2018 but won’t close until sometime this year. I have heard from builders who have already contracted for as many homes as they will build in 2019 and many others are already projecting closings into the 2nd half of the year. This shows new construction is still very active making up approximately 15% compared to 12.7% in 2017 of homes sold in Charlottesville and the Central Virginia area. There are signs that new home prices caused by demand and higher material/labor costs are starting to peak. Traffic through some new home models has diminished so this will be something to watch as we head into the spring market. This could be a good sign for existing inventory as buyers may choose to buy an older home to get a better price and not have to wait months for a new home to be built. Another positive sign comes from an article recently released saying Rental prices move more quickly than sales prices, so they can be a better way to gauge the health of a market”.
In the article it says if rental prices are going up, more renters will consider buying. If this is true, Charlottesville should see more tenants wanting to become homeowners. Michael Johnson from PMI-Charlottesville confirms this by sharing, “. As of December 2018, average rent for an apartment in Charlottesville, VA is $1545 which is a 16.96% increase from last year when the average rent was $1283, and a 1.29% decrease from last month when the average rent was $1565. One bedroom apartments in Charlottesville rent for $994 a month on average (a 5.43% decrease from last year) and two bedroom apartment rents average $1362 (a 3.45% increase from last year).The average apartment rent over the prior 6 months in Charlottesville has increased by $249 (19.2%)”.
Another sign that home prices have hit their peak in the Charlottesville/Albemarle County Area is the increase in homes sold and home prices in Greene, Nelson, and Louisa counties meaning buyers are traveling out a bit to get more home for what they are willing to pay. The significant reduction in gas prices may be playing a role in that decision as well.
As long as interest rates don’t rise much more, I don’t think the 5% rate will curtail buyer activity especially with the attractive financing options available for 1st and 2nd time home buyers. The wild card for projecting whether we will see a downturn in 2019 is the economy. The uncertainty with the stock market has caused a “wait and see” attitude amongst many who are thinking of buying. Waiting may not be the answer though as right now one has a better chance of finding a home than a year ago without having to make a hasty decision or paying too much for the property.
Realtors and New Homes
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Five good reasons to have a pro on your side throughout the process.
Buying new construction seems simple, right? Just pick out the floor plan you want, choose the perfect lot, and watch it go up. No sellers to deal with, no unexpected repairs that come up during inspection, no drawn-out negotiations. Right? Not so fast. In any real estate transaction, it’s important to have a professional on your side, even if the process seems straightforward. “Having your own agent provides a sense of security,” says Kristy Weaver, who has bought two new construction homes from two different builders. “It gives you some peace of mind, knowing that someone is looking out for your best interest.”
Peace of mind is just one benefit of having an experienced agent along for the ride. Read on for five more reasons you’ll want a local real estate agent by your side when buying a new construction home.
1. Help you find a reputable builder
“Your agent can rely on their own experience and that of their colleagues to help you find a builder you can trust.” “What’s the quality of the workmanship? What kind of warranty do they offer? What’s their track record of resolving issues? Getting a clear understanding in the beginning can alleviate serious headaches down the road.”
2. Go to bat for you
The timeline for purchasing new construction is typically quite a bit longer than buying an existing home. From the first time you visit the sales center, to choosing your layout, construction, inspections, and finally closing, there are ample opportunities for things to go sideways — think construction delays, permit issues, and financing concerns. An experienced buyer’s agent can help you navigate all of these sticky situations.
3. Help you review your contract
Even if you’ve purchased a home before, the contract for new construction is a whole different animal, and an experienced agent can help you make sure you understand everything, from floor plans to earnest money requirements, deadlines for requesting changes, and timelines for completion. “It’s crucial to have a third party who represents your interests in the transaction,” says an agent who has represented new construction buyers. “A good agent can add the proper addendums to protect you if something falls through.”
4. Assist with negotiations
Buyers’ agents know the areas where you’ll find the most wiggle room when it comes to negotiations. “Builders are trying to keep their sales price up so that the next buyers through the door see the higher closing price.” “They’d much rather throw in closing costs or additional upgrade credits.”
5. Point you toward smart upgrade choices
Builders will offer you endless options for finishes and upgrades, and it’s easy to get overwhelmed. A seasoned real estate agent can recommend the upgrades that will get you the most bang for your buck in resale value, suggest finishes that might be cheaper to do on your own, and help you avoid over-improving, which can jeopardize your appraisal before closing.
Even though a friendly sales representative will greet you with a smile the moment you walk through the door of the sales center, don’t forget that they work for the builder. Bring your own agent with you starting with your first visit — in fact, many builders require your agent to register with them from the very beginning in order for them to be involved in the process and receive their commission.
With a professional you trust by your side, you’ll rest easy knowing someone is there to protect your money, your time, and your new home.
Call 434-951-5155 or email RoyWheeler.Move@gmail.com to get in touch with a local, professional agent today!
Listen to Michael Guthrie’s podcast about using a Realtor when buying new construction by clicking the link below:
Michael Guthrie, CEO/Broker
Roy Wheeler Realty Company
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