“Hey Jeremy, do I really need to get title insurance?”  It’s probably the most common question I get from new buyers when we’re getting ready to close on a house.  So what, exactly, is title insurance?  Well … there are different kinds.  But we’ll get to that.

Title insurance is an insurance policy that protects a party’s “position” in the transaction (i.e. position = money).  What the policy does, then, is provide insurance that the real estate taxes were paid, for instance, or that there’s a clear line of ownership to the property.  Without title insurance, the insured would have to pay legal fees to remedy these situations.  You don’t want that, do you?

When you’re buying a property and financing it, the lender is going to require what is called lender’s title insurance, which means their portion of the transaction is covered by the policy.  As a buyer, you’ll have the option of choosing owner’s title insurance, which covers the whole of the transaction, not just the lender’s portion.  Let’s say you’re buying a $200000 home, and financing $150000 of it.  The lender’s title policy would be on only $150000, but adding owners title insurance would increase the coverage to the whole $200000.

So do you need it?

I can’t say.  Some clients get it, and some clients don’t, and what works for one buyer doesn’t work for another.  When I say that to a buyer, I seem to always get the response “okay, so what would you do?”

If I had a sports car, I wouldn’t just put half a cover on it to protect from rain.  Get my drift?

Thanks for the Ferrari pic, KlausNahr.

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How, exactly, is a subdivision created within Montgomery County?  You start with a piece of land, but then what?  The folks in the Planning office describe it here:

I thought this might be appropriate timing, given what Christiansburg is battling with the proposed Ivy Ridge development adjacent to New River Village.  Read more on that here, or here, or go to Roanoke.com and search “Ivy Ridge”.

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You’re not moving anytime soon, sure, but everyone likes to know how well their neighborhood is retaining value, right?

Well, there’s an easy way to do just that, and all it takes is an email address.  Just send me your name, email address and the neighborhood or area you live in, and I’ll make sure you’re notified every time a property in your neighborhood comes on and off the market.  Be the envy of all your friends!  You’ll know every price change, every sales price … you’ll be the life of the party!

But seriously, if you want to know how real estate values are doing in your area, then sign up for this automated service.  I will not SPAM you … I’ve never contacted anyone who’s taken me up on this offer in the past, and I won’t begin doing so now.  If it helps, I won’t even save your address – I just need to know it in order to set up the search.

I’ve just found that if you’re interested in following the values in your area, this is a good, real-time way to do that.  I’ve set it up for myself to track my own neighborhood, and those of some of my former clients, and can do the same for you.  Just contact me and I’ll set it up; I hope you find it useful.

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Ever wondered just how high real estate climbed in the 2000′s?  There’s a graph for that (with added text by yours truly):

The image is from the NYT, and was republished at Ritholtz.com.  And I like it because I have to see things visually – I’m not theoretical, I’m visual.  I have to see/touch/do it in order to get a real grasp of things, and I think it’s a great image.

Consider that on the left of the graph, in 1890, is the benchmark of $100000.  If a home priced sold for $100000 (in today’s dollars) in 1890, you can then see how housing responded to events throughout history.

• in World War I, that $100000 house would be worth ~ $94000 (hmmm – sounds like perhaps wars aren’t good for economies, but that’s another topic)
• at the end of the Great Depression, that house would have been worth ~ $82000
• at the end of the millenium, that house would have been worth ~ $109000

For 110 years, since 1890, the values of homes haven’t deviated much, plus or minus, without pressure from external forces (like wars and the Great Depression).  During times of peace, the graph shows that for the most part home values haven’t moved up or down more than 20% at any given time … until the year 2000.  Then the climb began, and what comes up must come down.

The Case-Shiller Index tracks residential real estate values nationally, across 20 major metro markets.  Obviously, the Blacksburg/Christiansburg/Radford corridor is not going to be a major metro market (thank God), but the index still provides us strong factual figures, and informed projections on which we can make decisions.

So when people ask me what’s going to happen in real estate, armed with this image I’m going to say … “I don’t know“.  Look, none of us do.  Graphs are great, projections are nice, but at the end of the day people are going to buy what they can buy, or sell what they can sell.  I’ll use the tools I have available to me, but it’s impossible to predict the future and be right most of the time.  So here’s what I think is going to happen in the next 24 months:

• Real estate values in the New River Valley will hold steady, plus or minus 2% of where they are right now
• Inventory levels will remain high through 2010, with buyers having a lot to choose from
• Appropriate, realistic pricing will remain key for sellers in all price points
• Interest rates will rise, which will slow any value appreciations in the foreseeable future

I needed a chart

That’s what my economic projection for the New River Valley real estate market will be – now let’s see what happens.  And in order for things to improve here locally, watch unemployment.  As the unemployment numbers for the New River Valley go down, expect that consumer confidence – and the real estate market – will go up.  In the meantime, keep this in mind – if you’re buying a home in the next six months, get serious.  Yes, inventory levels will remain high, but interest rates will not remain as low as they currently are.  I can’t tell you why I think they’ll rise, but I’ve seen rates quoted by local lenders, including Brandon Nicely, these past two weeks that I’ve never seen before.  We’re talking fixed, conventional loan products at rates I would have said three months ago we’d never see … and the cynic in me says we won’t see them again (so refinancers, you too – you could save hundreds of thousands in interest alone). If buying a home is on your radar for the near term, we should talk.

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Blacksburg’s Steppin’ Out festival is this weekend in Blacksburg, and it’s turning the Big 30.  That’s right, thirty years ago folks decided to throw a big party, and every year since Steppin’ Out has grown larger and larger.

This year’s even promises to be one of the best ever.  The festivities will be Friday the 6th, and Saturday the 7th, and you can find all sorts of information at DowntownBlacksburg.com. Links are also available for:

• Festival Map
• Vendor’s List
• Stage Schedule

If you’ve never been to Steppin’ Out, or experienced a street fair in Blacksburg, then you need to check this out.  It’s one of the biggest festivals of the year, and from the music to the vendors to the people watching, you’ll find something to enjoy!

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When Natalie and I were looking for our first house, we did what most potential buyers do – we went online, searched various real estate websites, and flipped through a bunch of real estate ads that all looked the same.  A little tiny box, with just a little bit of information about the house (maybe), and a big “Call me for all of your real estate needs” banner.  Uhm … no.  I want to search in the privacy of my own little bubble, surrounded by my thoughts and notes, sorting through all of my options.

We also walked a lot of streets.  We’d park in a neighborhood we thought we might like, and then we’d wander the streets.  We’d look at house styles, see what kind of a feeling we got from the neighborhood, that sort of thing, and sometimes we’d even happen upon a house that was for sale (this is how we found the house we eventually bought, actually).  But all too often, when we found a house for sale that actually had a flyer box, the box would be empty.  Sometimes there’d be flyers in there, but often they were so waterlogged they’d be unreadable.  When we could read them, we were doing so because we wanted to find out about the house, not to get a phone number for the listing agent who wanted to do dual agency and get more money.  And that’s what this guy was finding:

From ProductivityJunkies.com.

When I went into real estate, I wanted to be different. Some would say I’ve accomplished that, but not necessarily in a good way!  Nevertheless, the real estate sign is the first way people can find out about your house that’s for sale.  Make it stand out – give them the information they want.  Bedrooms, baths, square footage … the type of heat.  What things were important to you when you bought your home?  That’s what should be on a real estate sign, in my opinion, and should be a part of a comprehensive approach to making the information available to everyone.  Not shown in the picture here, but the second generation of NRVLiving signs have the single property website right on the sign, instead of on a smaller rider just above the main panel.

I don’t know if a buyer has bought one of my listings because of the professional real estate photos, or because the sign helped get them started with all of the information they might want to know, or because of a video walkthrough told them what it was really like being in the home.  What I DO know is that I want all of that – and more – to be available … and I don’t want a song being written about my empty flyer box.

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I’m feeling blue.

But really, I did it for the t-shirt:

So what’s it all about, right?

We at Coldwell Banker Townside wanted to hear what people were saying about us.  Scary, perhaps, but we were willing to take the chance.  And our awesome marketing team of Kelsey and Caroline, never above bribing, decided that in order to get people to participate that we’d “tempt” you with a free t-shirt.

Hey, it’s a quality t-shirt!

It’s pretty easy to participate, actually – just head to Go Blue and tell us why you want to Go Blue for Coldwell Banker Townside.  We’ll take your testimonial – make it funny, make it serious, whatever you want – and we’ll put it on our Facebook page, along with a picture of you in your t-shirt!  Not in the area? No problem – just send us a picture of you in our awesome Go Blue t-shirt and we’ll post it for you!

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The National Association of Home Builders (NAHB) is suing the EPA.

According to the NAHB:

A coalition of housing industry groups joined the National Association of Home Builders (NAHB) today in announcing plans to file a lawsuit against the federal Environmental Protection Agency (EPA) for removing the “opt-out” provision from its Lead: Renovation, Repair and Painting rule.

The Lead: Renovation, Repair and Painting rule (LRRP) applies to homes constructed before 1978 when lead paint was banned. Its opt-out provision, which expired July 6, let consumers allow contractors to bypass extra preparation, clean-up and recordkeeping requirements in homes where there were no children under 6 or pregnant women, thus avoiding additional costs.

“Removing the opt-out provision more than doubles the number of homes subject to the regulation,” said NAHB Chairman Bob Jones, a home builder and developer in Bloomfield Hills, Mich. “About 79 million homes are affected, even though EPA estimates that only 38 million homes contain lead-based paint. Removing the opt-out provision extends the rule to consumers who need no protection.”

The new rule was that after April 22nd, any work done on a house built prior to 1978 was going to undergo a strict lead-based paint control process.  And the EPA just decided to revise the opt-out clause that said contractors “to bypass extra preparation, clean-up and recordkeeping requirements in homes where there were no children under 6 or pregnant women, thus avoiding additional costs.” While lead can certainly be a dangerous substance, the new rules stipulated by the program seemed to be a knee-jerk reaction.  And, as many have rightfully suggested, it’s going to make older homes (built prior to 1978) appear a lot less attractive.  Consider this … two identical homes with identical floor plans.  One was built in 1977 and needs new windows,  the other was built in 1979 and also needs new windows.  If the cost of replacing windows is $250 per window plus the cost of lead remediation, HAZMAT suits and cleanup, and assuming everything else is the same, including their price, which house do you think you would buy?  The house where it costs $250 per window, or the house where it costs $350 – or more – per window?  Suddenly, the market for older homes just went down the drain.  And, as quoted in the article:

“Consumers trying to use rebates and incentive programs to make their homes more energy efficient will likely find those savings eaten up by the costs of the rule’s requirements. Worse, these costs may drive many consumers – even those with small children – to seek uncertified remodelers and other contractors. Others will likely choose to do the work themselves – or not do it at all – to save money. That does nothing to protect the population this rule was designed to safeguard,” Jones said.

When you consider that nearly 10% of our real estate market at any given time – in just the Blacksburg, Christiansburg and Radford markets alone – was built before 1978, that’s a significant hit to the market.  And we’re not alone, so it’s good to see the NAHB taking a stand on this.  The “revision” doesn’t make it any easier to work on a home built before 1978 – in fact, it only makes a difficult task that much more troublesome.   Tip of the hat to Jim Duncan, who first alerted me to the suit … I like his quote, when he wrote:

If a consumer chooses to endanger him or herself (which apparently they are by sniffing lead based paint), that should be their right.

Well, I’d never thought of it that way.  I’m not interested in debating the dangers of lead-based paint; but it’s nice to see an organization taking a stand against a law that, in reality, serves no good purpose at all.

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