From Sunday’s The Roanoke Times and Sarah Cox … emphases are mine.
"What are the real estate issues, nationally and locally, that REALTORS and their associates will face in the new year? Credit and foreclosures, the mortgage industry, the green industry, REALTORS in a buyer’s market, attrition among REALTORS, and national versus local real estate markets are some of them.
While we will examine in further depth each of these issues throughout the year, several professionals have given their comments as 2008 gets underway.
Steve Bodtke, managing broker of Long & Foster Blacksburg, pointed out that despite national pockets, the New River Valley market remains strong. Jeremy Hart, NRVLiving Real Estate Team (Coldwell Banker Townside) agreed, pointing out that in the last three years, the New River Valley residential market has seen an average six percent appreciation, while the average days on the market (DOM) has dropped by 30 percent.
‘Honestly, I was expecting a positive appreciation and higher DOM, but I wasn’t expecting those numbers,’ said Hart. He pointed out that while there has been an 18 percent drop in new home sales nationally, the real estate market slow downs have been in California, Nevada, Arizona and Texas. Locally, the lower DOM can partially be attributed to a slowdown in new home building, because a house could be under construction for six months all the while being ‘on the market’.
Bodtke said the strong NRV market follows the most basic economic model of supply and demand.
‘Blacksburg and Montgomery County are very appealing to a wide variety of buyers, from outdoor enthusiasts to retiring VT alumni (often one and the same). Due to the high cost of land and the even higher costs to develop land in the area, coupled with the increasing materials costs, prices of new homes are up. However, the demand for quality construction in a desirable area is always strong,’ he said.
The buyers in this market are looking a bit harder and longer because of the slightly increased inventory. So, said Bodtke, the more motivated sellers are ‘correcting’ their prices and not digging in their heels, assuming an appreciation rate that is simply too high. Hart said he believed that the onus for price positioning lies with the REALTOR.
‘We have to set clear expectations with our clients. You can’t argue with the numbers. During the last half of 2007, homes that were priced right, taking market value and priced a percent or two below, came off the market within a month or two,’ he said.
Buyers are looking, and finding, good values. This does not necessarily mean that they are looking for the cheapest price, said Bodtke, but for quality, sustainability and low-operating cost, often linked to energy efficiency. Both REALTORS said that going green will have an increased impact in 2008.
Bodtke said the proper approach to this type of construction is to examine the overall cost of home ownership, from type of materials used to the efficiency of the systems in the house. Hart said that the green industry in the NRV is a trend that will continue to grow.
‘It has not had the huge surge in poplularity that we’ve seen in other places nationally, but it has been growing consistently,’ he said. The Green Living and Energy Expo, sponsored by the Association of Energy Conservation Professionals, held its eighth annual convention Nov. 2-3, 2007 at the Roanoke Civic Center. The attendance and exhibits have increased in previous years, with more than 2,000 people attending the last event that featured 75 exhibits. Workshops included a biofuels seminar, the house of pressure, and presentations on residential solar, hybrid cars, global warming, on-demand water heaters and green roofs.
‘We will continue to see more and more companies that are either growing that as a part of their business or focusing their entire business on influencing the green market,’ said Hart.
Both REALTORS said they also see an attrition in their industry that began this past year. Hart attributes this to the change in the market.
‘When things get tough, people start to leave,’ he said.
Bodtke pointed out that it’s common in the real estate industry for people to ‘jump in when the market is hot. This was the same case with the ‘fly by night’ lenders and appraisers that no one had ever heard of. Many of them are gone, never to be seen or heard of again. This industry has a way of correcting itself, and that’s a good thing.’
Hart also said that of the four million people currently in the industry in the United States, nearly 60 percent are at or nearing retirement age.
‘If it’s harder to sell real estate, some people don’t want to do it. As things get harder and the workforce gets older, we’ll see more and more people get out of the industry. There aren’t as many people waiting int he wings as there where when I got into it five years ago,’ he said.