Perspective is a Wonderful Thing

It’s Friday Afternoon. We are looking into what will be a busy weekend. While it’s exciting to be working with some wonderful people, I still have to take a deep breath and gear up for the fact that for us Saturday and Sunday will be a continuation of the work-week.

Perspective is a wonderful thing. Ann and I attended a funeral yesterday. It was out of town so we had the chance to talk for two hours each way in the car. Going down we just caught up with each other. As if we hadn’t had a moment together alone for weeks – even though we work together in the same small office every day!

The memorial service was was amazing. It was a beautiful tribute to a man that had a wonderful life, full of blessings. Not only did he enjoy all that was available to him, but he gave back to people in the most kind and generous ways imaginable. He was selfless, always appreciating his family and friends, and doing whatever he could to help others. The man was filled wit the Holy Spirit and lived through the word of God – but as is should be, in humble and unassuming ways, doing for others, never asking what was in it for him.

On the way home we reflected on the day, the service, and the people who helped us understand this special man.  We should all be so lucky to live a life like this; then to leave this world and be memorialized with nothing but good memories and loving thoughts. It was truly a celebration of life and love. It was a reminder of what we are all here to do.

Perspective is a wonderful thing!

Low Inventory and Price Increases

Regarding Inventory and increasing home prices, RISMedia reported today:

“Home Prices Charge Upward, Stoked by Strong Sales Pace
RISMEDIA, Tuesday, May 16, 2017— Home prices continue to escalate, charging upward 6.9 percent in the first quarter of 2017, according to the latest quarterly report by the National Association of REALTORS® (NAR). The increase, stoked by the strongest quarterly sales pace in a decade, marks three straight quarters of growth.

“Prospective buyers poured into the market to start the year, and while their increased presence led to a boost in sales, new listings failed to keep up and hovered around record lows all quarter,” says Lawrence Yun, chief economist at NAR. “Those able to successfully buy most likely had to outbid others—especially for those in the starter home market—which, in turn, quickened price growth to the fastest quarterly pace in almost two years.””

There are consumer concerns about housing affordability and a quickening of sales prices reminiscent of the market prior to the crash in ’08. The biggest difference to note in the most desirable areas of RVA is that in multiple bid situations, cash and no appraisals are winning the day. Even if you are a qualified purchaser, and are willing to go well over sales price, it will be tough to compete in order to get the home you seek. At least in certain areas of town.

Should we be concerned that this situation will lead to another crash? Probably not; our current situation has two things working in our favor. There is a sever lack of inventory, and those buyers who may be overpaying for these homes are paying cash. There is no financial exposure for the lending institutions.

“Yun says, “High demand is poised to continue heading into the summer as long as job gains continue; however, many metro areas need to see a significant rise in new and existing inventory to meet this demand and cool down price growth.””

It is going to take a little time before home inventory catches up with demand. While this condition will likely continue to inflate sales prices, making competition stiff, it may quite possibly retard the market in the mid-range move up buyers. They may be less likely to sell because they don’t know where they will be going. These buyers may have to adjust their expectations if they are forced to move due to job relocation. They may be forced to do a two stage move, with a rental in the interim.

This is an unusual market, but not unanticipated. It’s going to be exciting to watch it unfold in the coming months.

Is Zillow finally being called on the carpet?

There is an interesting article in the Richmond Times Dispatch Metro Section today (5/15/17), “Zillow under scrutiny for ‘Zestimate’ system”, by Kenneth R. Harney. He notes a law suit filed in an Illinois court that claims Zillow’s Zestimate system has seriously undervalued a woman’s home, preventing her from selling it for what it’s worth. The article suggests that Zillow is not only responsible for stigmatizing her property, but furthermore begs the question of how can Zillow perform appraisals without a license? They are also making the value available to the public without owner consent.

Well, “it’s about time they got called on it”, said Pat Turner, a Richmond real estate appraiser quoted in the article. If, as the article mentions, Zillow’s information meets the definition of an “appraisal”, then why shouldn’t they be licensed to perform such tasks? Why shouldn’t they be held to the same high standards as the rest of those who are licensed professionals when performing these works? Why shouldn’t they be held accountable for their representation of a property’s value in the same stringent manner as are all licensed real estate appraisers? The penalty for providing inaccurate information and property value for a licensed appraiser is severe – Why shouldn’t Zillow have the same level of responsibility and accountability when posting information that the public so willingly seems to rely on when self-evaluating a home?

Is it because the information provided by Zillow is quick, easy, and free? Well then, one should not be surprised to get that they pay for. In the mean time, home owners who have a property for sale, like this woman in the article, may not be pleased to know that they, in many instances, may be penalized for the inaccurate information that Zillow is offering to consumers. Zillow is notoriously off-the-mark when it comes to appraised value, or the market value that can be offered by a licensed Realtor, and they freely admit it.

Zillow makes an incredible amount of money, hundreds of millions of dollars per year, by offering questionable housing valuations to the public via their “Zestimates”. Somehow, the consumer doesn’t seem to mind; at least until now. It will be worth watching to see if the courts take this action seriously. By all accounts, it seems to me as an educated consumer, that they should. The financial stakes are simply too high to be ignored. But beware; there are other AVM systems out there that will then also be under scrutiny, including those used by the government. It may be too late to put this animal back in its box!

Why should anyone have “Buyer Representation” in a real estate transaction?

It wasn’t long ago when state and local associations, and consumer advocates, began examining “buyer agency” in real estate transactions; this lead to adopted legislation which now mandates the disclosure of agency representation to consumers by licensed real estate professionals. The term “agency” is used in real estate to help determine what legal responsibilities your real estate professional owes to you and other parties in a transaction. Buyer Representation, AKA “the buyer’s agent”, allows for purchasers to have their interests represented throughout the course of a home search, and the eventual purchase of a property. We are no longer subject to a system in which agency representation only supports the Seller. Increased demand from consumers, and years of experience from Realtors, has enabled purchasers to enjoy a professional advocate who only works for them and their interests. Why wouldn’t you choose to have this type of assistance when purchasing your next home?

Just a few of the benefits you’ll receive include expert guidance, objective information and opinions, expanded search power, negotiation knowledge, transactional expertise, career experience, and your anchor during emotional moments. Not to mention that your understanding and satisfaction with a real estate transaction increases when you have your own representation. In most instances it costs you as the buyer very little to have representation, and will very likely save you money and anxiety along the way.

Talk to a buyer’s agent about assisting you with your next real estate transaction, and find out in detail the benefits of receiving the personal representation that years of experience has made available to you. The conversation is free; the knowledge you’ll gain from it is priceless!