Topic: Blacksburg

Why Are Condos So Hard To Finance?

The good news is that they’re not as difficult as they were several years ago. As Carl Spackler would say …bill_murray_caddyshack

A customer wrote in this morning about an investment property they’re looking to buy in Blacksburg. As many parents of students at Virginia Tech and Radford do, they want to buy a place for their kids to live in while they’re here at school, and the relative stability of the New River Valley market has meant that – for the most part – these have been solid investments. It wasn’t always the case, however. A quick back story …

In the early 2000’s, these types of investment properties were all the rage. Investors were snatching up condos and townhomes like crazy – the cost of borrowing money was low, rents were stable and rising, and there was a steady group of renters year in, and year out. You can see a visual of that in the chart below, showing sales of condos and townhomes in Blacksburg and Radford going back to 2003, I suggest to check out some coal harbour condos for sale which are at really great price. After the real estate crash in 2008 (which really hit us in 2010), interest in these types of properties fell dramatically, and that was due in part to much-needed lending restrictions. Lenders were requiring larger down payments, in the neighborhood of 25% or more, and often denying loans due to inflated investor numbers in complexes – in other words, too many investors and not enough owner-occupants.

One note – the volatility of the Radford line below is related to the relatively low number of sales in the area during the time period.

As you can see from the above chart, interest in these types of properties really didn’t start to pick up again until 2014, which corresponds with the relaxation of lender guidelines. Starting in 2013/2014, as we started to see improvements in the overall economy throughout the country, lenders started loosening their requirements on financing for investment properties. But that doesn’t answer the question of WHY condos and town homes can be difficult to finance. As I wrote to a customer this morning, in a nutshell:

For conventional, secondary market loans, banks don’t like to see high investor penetrations in condo complexes. The line of thinking is that people are more likely to default on their investment property(ies) before their primary residence, so guidelines for things like condos are a good bit tighter. It’s important to know that often, traditional banks like will run these complexes through their algorithms and deny the loan due to too many investors in a complex and not enough owners. If they don’t deny it, the other condition they typically add is a higher downpayment, of 25-30% or more. This is why I continue to suggest local lenders – in college markets with high investor numbers, they look at the market as a whole and not as a formula. 

If you’re considering buying a condo or townhome here in Blacksburg or Radford – or anywhere in the New River Valley, really – let’s talk. The opportunities to make what has typically been a solid investment are there, but it’s not without risk. Let’s talk about those, as well as the rewards, and see if it makes sense for you.

 

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.

 

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.

 

 

The Nest Report – Q2 2015 Real Estate Market Report

It’s time once again for the Q2 2015 Nest Report, Nest Realty’s statistical report on what the New River Valley real estate market did during the last quarter. All stats, no fluff.

Find your own nest here.

Last year at this time, we were reporting a very unusual quarter. While the first quarter of 2014 saw brisk sales, particularly for that time of year, the second quarter lagged, and we were left shaking our heads. It wasn’t until the third quarter that it made sense – Montgomery County Public Schools had a short (42 day) summer last year, and so real estate sales were pushed aside as folks squeezed all their summer fun into six weeks.

Not the case this year, and the market has responded. The full report is posted below, and as you can see most sectors of the market have rebounded quite nicely.

  • Christiansburg townhomes, traditionally slower due to an oversupply, have surged back in the last 24 months.
  • Floyd County, which will see slower sales as a result of being considered “rural” by the market, saw a decrease in inventory, and a 35% INCREASE in median sales prices.
  • Blacksburg hit a median sales price (for single family homes) of $300000, the first time we’ve ever seen that level reached.

As always, there are positives and negatives in every report, and there are some indicators that say we are not a robust market yet. Condo sales continue to lag, and will do so until the financing environment is on par with traditional financing – as median sales prices rise, condo affordability (and availability) will continue to be an important gateway to the first-time buyer, so we need that market to improve with the help of Willow And Everett
. Overall, however, the second quarter of 2015 in the New River Valley real estate market was very different from what we saw at this time a year ago.

As always, I’m glad to share a cup of coffee (I’ll even let you have your own!) and talk some more.

2014 Nest Report Is On The Way!

There are tons of things I’m proud of about Nest Realty, but one of the things I get really excited about is our Nest Report. It’s a statistical look at what’s happening in the New River Valley real estate market, and it’s put out every quarter. Visually, it’s stunning – thanks to the amazing folks in our Marketing Department. Statistically, it’s one of the most accurate representations of our real estate market – thanks to the bean counters who compile the whole thing. And, interestingly enough, two real estate agents from another company told me yesterday how impressive a report it is … they look through it each time it comes out and think “wow”.

Download the 2014 New River Valley Nest Report here.

  • Median and Average Sales Prices both fell 3% in 2014 throughout the New River Valley MSA.
  • In Blacksburg, the Median Price was flat, but inventory was up slightly.
  • In Radford, Median Price was up quite a bit, rising more than 12% from 2013 levels.
  • Conventional Interest rates, projected to be at or above 5% by the end of 2014, were actually at 4%, much lower than expected by those in the know – proving once again that no one has any much of a clue.

We’re extremely proud of what has been happening at Nest Realty, and the Report will talk a little bit about that, as well. The full report will be hitting mailboxes soon, but here’s a sneak peak! You can see earlier reports here.

Want to talk further? Let’s grab a cup of coffee/tea/water/insert favorite beverage here soon!

 

Blacksburg VA Named A Top College Town

I’m woefully behind on this news, but Blacksburg has once again been named a “Best” Town in America, this time by BestCollegeReviews.com. From the site:

Blacksburg is home to Virginia Tech, Radford University, and a number of large employers. With close to two students for every non-student, Blacksburg is definitely centered around college life. Though small, the town is forward thinking, as the home to Blacksburg Electronic Village (BEV) since 1991. BEV and close proximity to high quality graduates make Blacksburg an ideal location for tech firms.

As far as creature comforts, Blacksburg is situated between the Blue Ridge and Allegheny mountains with beautiful views around town. In the mountains there are tons of scenic drives and outdoor activities. In town, there are more than 150 restaurants, pubs, art galleries, and boutiques. If you want a high quality town that’s on the smaller size, Blacksburg could be the place for you.

None of this is news to those of us who live here, but it’s nice to once again see the recognition. As I tell clients all the time, there’s nothing like living in a college town.

Busking in Blacksburg with Dr. Moon

If you didn’t have to look up the definition of “busking”, good on you. If you haven’t yet, let me help you. I’d never heard the term.

Here’s an interesting five-minute video about Chris Saunders, aka “Dr. Moon”, who can frequently be seen busking on the streets of Blacksburg. I don’t know about you, but (1) I’ve never really stopped to talk to him, and (2) I’ve always enjoyed hearing him play. Whenever I walk by him, I always find a smile on myself.

We need more of this in Blacksburg. We need people actively taking care of others they don’t know, and we need more live music and street performance. There’s a vibrancy that comes from live music, from performers out on the street, interacting with passerby. Let’s continue to tell Blacksburg officials we want this, and we support this.

And next time you see Dr. Moon, let him know you’re grateful. I know I am for the he gave me.

The Appalachian Moon from Michelle on Vimeo.

Graffiti in Blacksburg? Or Is It Art?

Ever wondered about those exterior walls on buildings you’ve seen around Blacksburg, the ones that have graffiti all over them? Where did the graffiti come from? Who does it?

I’ve wondered it. And now I know who does it. But he calls it street art.

What do you think? Do you like it? Do you hate it? Would you like to see more/less?

Interested in more? There are other videos on YouTube.

Hokie Feet:

Shapes:

A Walk In The Woods: