Brexit – What’s It Mean For New River Valley Real Estate?

BREXIT.

By now you’ve likely heard that British voters have voted, in an historic referendum, to exit (or British exit = Brexit) the European Union. British Prime Minister David Cameron will resign later this year as a result, and the value of the British pound has fallen to some of the lowest levels since 1985. And, befitting a headline you’d expect to read on The Onion, The Washington Post reports this.

Regardless of whether or not Brexit is good or bad for the UK, EU, or the world, the United Kingdom is a long way away from the New River Valley – 3875 miles, roughly – so what impact will that have on the real estate market?

Everyone wishes for a crystal ball, but there is none. However, if I had one, this is what I’d say we should expect. In the short-term, it seems that we’ll see lower interest rates in the coming weeks, as markets worldwide seek an equilibrium. Not wanting to assume anything, I asked a few of our recommended lenders their thoughts, as well, on the whole Brexit thing, and what it would mean for home buyers (and owners) here in the New River Valley. They’re the best at reading the markets, and can usually give us a pretty good look into the short-term future of mortgage rates. Here’s what they had to say:

Kim Burke, LeaderOne Financial – “Markets reacted strongly to the news of “Brexit”, with money being dumped into bonds as uncertainty in Europe drives people towards safe harbor.  Things quickly simmered this morning as the news settled in, but expectations are to see rates continue to push towards historical lows in the coming weeks. Of course, as we all know — our crystal ball can only tell us so much — we’ll see what other news unfolds as Brexit plays out and how markets are affected. My recommendation — hover your finger over the lock button — if you see 0.250% or more improvement to the rates you’ve been quoted this week — grab it.”

Robert Mitchell, Prime Lending – “Good news for home buyers, mortgage rates are very likely to stay low due to a bold move by the Brits voting to leave the European Union (EU). The overnight trades were volatile where the British pound dropped to a 30 year low. Reactions like today’s trade are quick, mainly driven by confidence, and will balance out over the next few months. The overall outcome of this is going to take time to determine. This will be the beginning of a large change in the global politics. The following weeks to come will be volatile for the global markets. This will take rate hikes off the table with the FOMC for now. The vote was close, 52% to 48%. The impact of this daring move can last for years causing a lack of confidence in traders. This translates to mortgage interest rates remaining low if not lowering more. This is good news for those in the market selling & buying! Rates staying low means buying is still attractive and realistic!”

Ryan Stenger, Freedom First Credit Union – “Just like everything in the media this is creating big stir. Make no mistake this IS big news simply because it creates uncertainty in the market place. With uncertainty comes volatility in markets. I would expect the mortgage bond market that drives mortgage interest rates to move up and down a bit with lenders making many price changes throughout the day. If a lender quotes on rate in the morning another higher or lower rate in the afternoon, they are not trying to pull one over one you. No one has crystal ball, but we should know more about general  rate trends by middle of next week.”

According to them, we should be expecting a bit of a bumpy ride, but if everything goes as expected, home buyers and refinance loans should do well in the coming weeks. Feel free to connect here, or reach out to any of the recommended lenders above, for more insight!

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10-Year Growth Report in Blacksburg

Dusting off the blog a bit … been a while since I’ve posted here. The title of this post … snooze, right? But I promise it’s a little more interesting than that.

On Tuesday, I had the opportunity to speak with Bethany Teague, of WSLS, about a report the Town of Blacksburg had released earlier in the day. The report discussed how property values in Blacksburg – as well as in Montgomery County – had increased over the last decade, and highlighted some of the developments that have contributed the most to the Town’s tax base over that time.

The fact that property values in Blacksburg have increased so dramatically is really no surprise to anyone who’s followed real estate here for the last 10/20/30 years. Blacksburg has for many years had the highest median home values in the New River Valley, and much of that has to do with the solid foundation that Virginia Tech brings to the region. What I was suggesting in the clip above was that, while rising property values are certainly good for current homeowners, one thing that’s been a continuous theme among home buyers is that Blacksburg is sometimes out of reach for buyers looking to get into the market. Blacksburg may be at the epicenter of rising home values, but areas throughout the NRV – areas like Christiansburg, and Montgomery County in general – have also benefited, as well. You can see our previous market reports here.

One of the things that makes our real estate market unique in Blacksburg is that a town of ~ 50,000 people, with half of those residents living here only seasonally (and usually not buying houses, either), continues to stay strong. For “fun” (since I geek out on this stuff), I ran a quick search of median real estate sales figures for Blacksburg over the last ten years, and have posted those below.

YearMedian Sales PricePercentage Change
2005$213,097-----
2006$231,0167.8%
2007$234,8141.7%
2008$242,0193%
2009$230,460-4.8%
2010$243,6555.5%
2011$228,736-8.2%
2012$232,1031.5%
2013$253,8778.6%
2014$234,563-7.7%
2015$255,0488.1%

While sales figures in Blacksburg ARE higher than other areas of the New River Valley, one of the things that gets overlooked is that our tax rates are still relatively affordable. When compared to other regions of the country, which may see tax rates swing as much as 60% from one municipality to an adjacent municipality, the New River Valley continues to be one of the most affordable – and wonderful – places to live.

Thanks to WSLS for reaching out, and to the Town of Blacksburg for the report. If you’d like to read the Town’s report, you can do so here.

 

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That Rental Amount Seem Too Good To Be True? It Probably Is.

Craigslist scamI’ve written about Craigslist scams and rental properties before, but it seems that it’s hit someone here locally again, according to this article, by Travis Williams. Thankfully, it seems that the seller’s weren’t harmed any more than just unnerved, but it brings up a good point – for both renters and homeowners.

If you own a home, set up a Google Alert for your address and/or keywords, so that you’ll be notified when your listing gets “scraped” by these idiots. They’ll find your listing online, then repost it with the same language, even the same photos, and usually an absurdly cheap rental rate. Then, they’ll attempt to lure someone into wiring them money for the first month’s rent, and maybe the security deposit, never to be seen or heard from again.

And if you’re a renter? Beware the ridiculously low rental rate. If it seems too good to be true, it almost certainly is.

The Internet Crimes Complaint Center is a nice recommendation, but we’ve been reporting these scams for several years, with nary (I just wanted to use the word nary) a response or acknowledgement. You’d be better off just being vigilant, doing your due diligence, and if you have a question about the validity of a rental, contact a quality property manager for verification. These scams are so ridiculously simple that it’s surprising they continue to work, but obviously they do – they keep showing up.

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What’s the Blacksburg Real Estate Market Doing?

Since January 1, it seems, real estate agents in Blacksburg seem to have been saying – to each other, to their clients, to anyone – what IS going on in the Blacksburg real estate market?

Historically we follow a traditional bell curve, with more properties starting to come on the market in Mach, climbing to a high around May/June/July, and then falling to yearly lows in November and December … only to do it all again the following year. That’s what it’s USUALLY like.

But 2016 hasn’t been usual, it seems, so this morning – as part of a project for someone else – I decided to look at sales figures YTD in Blacksburg. I was looking only at single-family homes (think detached, not townhomes or condos) in Town limits, and what I found was surprising. I talked a bit about it on Twitter this afternoon – are we connected there?

Blacksburg real estate market 2 3

I have to say, the results are surprising, but this is one reason why I love statistics, because in this case what we feel versus what is actual are somewhat different. While it felt as if the market was moving exponentially faster than in previous years, it really hasn’t been – inventory has followed a traditional track, while buyer demand has increased, thus increasing prices and driving down the length of time homes have been staying on the market. Good for sellers, maybe not so good for buyers, because increased demand doesn’t mean buyers are going to get good deals. Within our office we’ve seen more multiple offer situations this year than in years past, and that’s left some buyers discouraged.

See the 2015 Nest Report, our look at the market, here.

5My opinion? A pendulum swings both ways – we’ll see some of this settle out as the year goes on. But don’t let agents, or lenders, rush you into making a decision, either.

 

 

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Rocket Mortgage, from Quicken

If you watched the Super Bowl Super Bowl commercials, you might have seen an ad for Rocket Mortgage, Quicken’s new loan product that promises a mortgage loan with just a click of a button.

Is getting a home loan really that simple? Our clients can spend days or weeks compiling all of the necessary documents a lender will need just go get a preapproval – then you have the appraisal that needs to be done, the loan needs to get funded, and new guidelines established in 2015 mean that everything has to be prepared and off to the buyer for review days in advance of closing. Is it really as simple as pushing a button?

I suspect the devil’s in the details, so I asked my favorite mortgage lenders – Kim Burke, Robert Mitchell, and Ryan Stenger – to talk honestly about Rocket Mortgage. Here’s what they had to say:

Kim Burke, LeaderOne

Robert Mitchell, PrimeLending

Ryan Stenger, Freedom First Credit Union

The devil’s in the details, it seems, but according to our lender partners, there’s a time and place for something like Rocket Mortgage. As Ryan stated, the mortgage process probably requires some element of human interaction, but there may be some folks who simply like the relative ease and automation that something like Rocket Mortgage claims to provide.

I’m a technology guy, and I love efficiency. For me, Rocket Mortgage isn’t going to be a fit, but if you decide to give it a shot, let me know how it goes? And my thanks to Kim, Robert, and Ryan, for sharing their thoughts on everything you need to know about band saws.

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Home Buying and Heavy Rain – A Perfect Marriage

This has become a bit of an evergreen post for the blog, one I keep going back to again and again, but it’s held up well over the last nearly five years, and it’s accurate for a day like today – where it’s rained, non-stop, in the New River Valley, all day.

On days like today, when the temps have dropped and the rain continues to fall, all you want to do is … well, nothing. But seeing houses on a today like today can, in many cases, answer that most important of questions – “does this basement get wet?”

From the blog, April 2010:

“Most of the time it’s not quite as serious as a swimming pool in the basement; sometimes it’s as simple as a window seal that’s showing condensation that might not otherwise be there during a dry time, or standing water in poor-draining sections of a backyard.”

You can see the whole post here, and thanks to Lisa for reminding me of this post. Follow her on Twitter.

Home_shopping_in_the_rain

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What Does The Future of Real Estate Look Like?

Last night, I attended a speech given by Robert Scoble, and hosted by Rackspace.

Robert is “a futurist” – he looks at what’s coming, or what’s possible to create – and talks about real-world application. At least that’s my interpretation.

Blacksburg and the New River Valley has an incredible startup community that, while still in its infancy, is really, really exploding – there are some tremendous companies here doing some really incredible work. Autonomous vehicles, virtual reality, DNA study … really, really cool stuff.

So why would a real estate guy be thinking about this kind of technology? Because it’s comingit’s here – and we at Nest Realty need to be thinking about how we can apply this kind of technology to the everyday experience of buying and selling homes in the New River Valley. The real estate industry as a whole is notoriously slow-moving, but companies like Nest Realty are doing our best to stay as innovative as possible, understanding and taking advantage the trends before they get here, not afterwards.

As Alex Obenaeur posted later on the luxury real estate South Lake Tahoe meeting (and if you’re not familiar with Alex, you should be – he’s part of the startup community here that’s really making a difference), it’s the difference between proactive and reactive tech:

These folks are working on proactive tech. They are pioneering. They are building things for a world that doesn’t even exist yet; that most of us can’t even fathom.

The world has changed. At Nest, we’re always going to be looking at what’s possible, and how to make it work for our customers and clients. That’s why we’ve made things like Matterport available to ALL of our Nest listings at the brokerage level – if a client wants to showcase their home in this way, we have the tools available to make that happen for them.

But what’s next? Will we use things like virtual reality to show off homes here at the office? Are we driving virtually to listings, showing a home buyer what the surrounding area looks like? Is it technology that helps home buyers and sellers integrate home systems, like Nest and Echo and smart home technology?

The beauty of the future is that we don’t know, and we can create it. Rest assured Nest Realty will be at the forefront of that here in the New River Valley. Thanks for putting this together, Rackspace – great experience. And thanks, Robert, for coming to our little corner of the world.

#LiveWhereYouLove

 

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The Federal Reserve Raised Rates – Now What?

Yesterday, the Federal Reserve raised short-term interest rates. So what’s it mean for home buyers in the New River Valley?

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Thinking of Remodeling Your Home?

Thinking of remodeling? Before you start going all HGTV on the place, think about what really makes the most sense for your return. And the folks at NAR Research have to put together an incredibly handy look at remodeling projects – including what the Top 20 remodeling projects have been, how happy homeowners (and their future buyers) have been with the work, and what you might expect as a Return on Investment. Hint – there are few 100% ROI projects.

Click here for the 2015 Remodeling Impact Report.

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Buying A Home? Here’s What The Process Looks Like.

Last night, I had new clients in the office, and we were talking about the process of buying their first home might look like. They had done some research on the internet, but as with anything on the web, there was a lot of misinformation to wade through, as well.

We were joking that I needed a video of the process, and lo and behold I happen to have one of those! I wanted to explain whether you should be too worried about the pricing and details, orsilly stuffs like if they have the best shower head in the bathroom! Cheesy it may be, but it’s a quick visual of what to expect when you’re buying your home in today’s market.

So, without further adieu – grab some popcorn, sit back, and enjoy the show!

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