lexington news

The Under $100k Buyer. Going…Going…Almost Gone

by John Rice

HELLO UNDER $100,000 BUYER…….ARE YOU OUT THERE????

I don’t think you are, and I don’t blame you.  With prices and interest rates so low, why settle for a $90k three bedroom, one bath house without a garage when for only $143 more a month you can get not only a newer house, but one with an extra bathroom and a garage?

Between the listings I have and from watching the under $100k market every week, I think it is safe to say that few people are looking under $100k right now that aren’t investors.  I have one of the best $90k houses I have ever seen listed right now.  I didn’t expect it to take 45 days to sell.  We finally got an offer though, and a good one at that.  Every week I scroll through all the new listings, pending sales, and sold listings from $0 all the way up to $550k.  Most of the under $100k ones are foreclosures that get bought by investors.  The $100-150k is super strong at the moment.

Let me flash back to 2005-2006.  Back then, realtors dreaded a buyer who said their peak price point was $100k.  There just wasn’t much out there back then for that kind of coin.  Today, $100-125k seems to be where most of those buyers land.  Whip out your mortgage calculator and you’ll find that the payment is the same at today’s 4% rate for a $125k house as it was for a $100k house at 6% back then.

We all know that the higher end houses have suffered the most with values over the past several years, but I am now worried about the lower end.  Who would have ever thought that record breaking affordability would mean that nobody wants the most affordable houses there are??

What’s the market like?

by John Rice

Back when I was with another real estate firm here in town, my office building backed to a creek.  There was a tunnel where the creek went into one of those round concrete tubes and came about under a parking lot behind a bank about 40 feet away.  One of my best memories of that building was a day I had both of my then very young boys with me.   My boys and I hung out behind my office for what seemed like forever, dropping leaves and twigs in the creek on one side of the tunnel and then running to see where it would come out and how long it took.  You could drop a stick in the same place twice, but it would never come out in the same place or in the same amount of time.  (Another favorite memory is the helium tank we had.  I’d suck in the helium and make the funny voices for my boys…..but that doesn’t really go with this post that well.)

Hope this isn’t too far of a stretch for you here, but that day reminds me a lot of the real estate market.  See, it too never stays the same.  Too many variables with prices, interest rates, the economy, what people read in the news, to ever stay still.  Back in 2005 any listing would sell in a heartbeat.  All the agents wanted listings.  Then, if you had a buyer, it was like gold.  Then, only houses under $150k seemed to be selling well.  Then rates started dropping, and all the sudden over $300k was doing good.  Then it was hard to sell new construction.  Then the tax credit frenzy and subsequent bust, then…..not much.  Now, we’re almost back in a mini-frenzy again.

Yeah, it is really like a little frenzy, especially with the better priced and/or better located properties.   I’ve got 6 houses pending right now.  One is in a neighborhood that just a few years ago was considered one of the least desirable areas for the price range.  I keep getting call after call on it.  If I had put a sign in the yard of this house a year ago…..well, it would have been there until now.  Another one is a sweet little house.  It sold a year ago for just a little less than my buyer is paying for it.  The seller took a new out of town job.  There is no better proof of a stable market than the same house selling for a bit more just a year later.  Oh, I forgot to say we almost had multiple offers on it.  I’m also having buyers tell me they want to see a certain house, then it turns out that it has already sold before they can go see it.

So where does this leave buyers and sellers?  If you’re a seller and you’re not seeing this action, your price is wrong.  Period.   If you’re a buyer, you need to realize that there are a lot of people out there shopping too.  I think I’d get pre-approved with a lender so that if you do find “THE” house, you are ready to pull the trigger.  If you see something online that looks nice, go see it.  Don’t mull it over for a few days.  Get out and check it out.  I guess the bottom line is not to be on the fence too long for a property you like enough to consider.  Decide if you want it or not pretty quickly.  I always try not to push people into a deal, but I do sometimes push people to make a decision if I think the place won’t last.  I’ll tell them to figure out if they want it or not.  If they don’t, cool, we’ll move on.

Oh, my old office building?  Just to show how everything is always changing in real estate, it is now in a landfill somewhere and a brand new bank building is in its spot.  The creek is there though…….and I’ll find a way to use the helium tank story in another post.

 

You’ll know if you had a bad Buyer’s Agent when you go to sell

by John Rice

I’ve got a pretty easy day today.  The phone hasn’t rung much, no houses to show.  It’s been pretty crazy busy lately, so that’s why I’m a little late with the blogging.

I was just scrolling through some listings in my saved tab on lbar.com.  I’ve been following this house that I sold a few years ago that was back on the market.  Want to know the story?

Here goes:  I was the 3rd realtor to have this listing and the only one to sell it.  It backs to a wooded area in a nice neighborhood.  I was the only agent that made a big deal over the wooded area.  Why did I do that?  Because it was the only unique feature this house had over every other house that was for sale in that price range.  Truth be told, it wasn’t a house I could have recommended to any of my buyers.  In fact, my wife and I had looked at this house before we moved 4 years ago and were not interested.  The house was right at that point where a lot of expensive maintenance was coming up and I didn’t want to fund all that, plus a tiny kitchen and odd placement for the laundry.

The house sold to a first time buyer represented by another agent.  It was great for my people because they were able to get top dollar for a house with rotting windows and a roof with shingles literally falling.  The repair list was very minimal, which made it easy for me (and the buyer’s agent…..which I suspect was why it was so minimal.)

Flash forward about 2 year.  The house comes back on the market.  I’ve got several buyers in that price range at the time, and they all want to see it.  I show it to them, but tell them what I know about the place.  None of them are interested.  The showing instructions that the listing agent put on the MLS was that the seller’s needed plenty of notice to show since they had to remove dogs.  The house was vacant.  The last time I showed the house, I told the listing agent they might want to change that since it could mean more showings, especially from the agents out with buyers looking at other listings in the area.  I often get calls from an agent with a buyer in their car that didn’t like the house they had an appointment for and have asked their realtor about “The one down the street.”  The dude never changed the showing instructions.

Finally, the seller changes realtors.  They got one that did a good job of presenting the house.  I’ve had a deal with this lady before.  She is pretty good at staying on top of things.  It takes a while, but it finally sells.   It sells for just over $10,000 less than they paid for it……probably to another buyer that has no idea that the house still needs a new roof and has the same rotting windows.  They also probably don’t know that 8 out of 10 buyers will not want the house when they go to sell it due to the tiny kitchen and odd placement of the laundry.

I guess all this just reminds me of what I see on a daily basis.  There are agents out there that don’t care a thing about their clients.  Then there are agents out there that really do care and do a great job.  If for some reason you are reading this and don’t think I am the agent for you, shoot me an email or text/call and I’ll be happy to recommend somebody that might be a better fit…..I’m just too tired of seeing people suffer the consequences of having a bad agent.

 

P.S.  I hit spell check after writing this post and it was the first time it said no errors were found.  Hope my 7th grade Language Arts teacher is reading this!!

Do you know what neighborhoods have the most crime??

by John Rice

People ask me all the time if a neighborhood is “Safe”.  That’s when I often start verbally blogging about the difference of what we perceive to be safe and the reality that crime happens everywhere.  I kind of think that most people see a pretty street with well-kept lawns as a “Safe” location……and a cheaper area with lots of chain link fencing and junk in the yard as unsafe.

I own 4 houses.  3 of them are rented and I live in, of course, the nicest one.  One is downtown and is worth less than $20k.  The other two are around Man O War near Alumni Drive.  The one I live in is near Hamburg.  Which do you think has had the most and least crime in the past 4 months?  You’d think my own house located on a cul-de-sac in a desirable neighborhood with the best school district in this part of town would have the least crime, right?  And my little rental shack off of 3rd street would by far be the most dangerous?  Well, you’d be wrong.

Below is a link to the crime map.  Before you click it, think about some of the neighborhoods you think would have the most/least crime then look at them on the map.  I bet you might be as surprised as I was.   I will add this though…..As somebody that checks the crime stats frequently, it seems that crime like cars and houses getting broken into seem to come in waves.  My neighborhood has always been pretty low on crime, but last fall and winter all those crooks made their unwelcome appearance in my area.  Once it starts happening frequently enough for the police to patrol more often, they move on.  They may be in your neighborhood next.  That is one reason it is better to look at the crime from a longer vantage point than just the past month.  I tell people looking back over the past 6-12 will scare the heck out of you, but should give you a realistic view of what you can expect before you buy.

Here is the link:

http://www.raidsonline.com/?address=Lexington,%20KY

 

Goodbye to my old Kenwick house

by John Rice

 

I use to live here.  Kinda.  back in the mid 1990’s my wife and I rented the little shack that sat on this lot and has since been relocated to the Fayette County Landfill.  I drive down this road frequently to get home after taking my son to school and one day the house was gone.  I would love to have been there to see it one last time before it came down.  It was originally a 4 room house that had a “Great” room addition on the front.  It had to be on the front because the house was built practically all the way back on the lot.  Many of the houses you see in Kenwick are like this.  I was told by long time Kenwick residents that there was some deed restriction loophole that allowed smaller houses to be built at the end of the lot.

I’ve actually lived in Kenwick on Lincoln Avenue twice.  My parents bought the house next door to this one when I was a sophomore at Henry Clay back in 1985.  My parent’s house had two little houses set way back on their lots on one side and another one on the other side.  My rental shack was on the side with the two small houses.  Since there was such a price difference between the houses, we had our fair share of neighbor issues…..this was in the 80’s before Kenwick became trendy.  Back then, it would have been the prime neighborhood to have shot an episode of “COPS”.   A neighbor on one side never fed his chained up pets and always blasted music.  After many friendly requests from my dad asking him to turn it down, he dared my dad to call the police.  My dad did.  When the police got there, the neighbor dared the police to arrest him.  They did.  That house was bought by somebody who remodeled it and it has since been featured in the Homeseller.  Go figure.

The 2nd house down on the other side was the same 4 room shack as my house before the addition.  It had asphalt shingle style siding that looked like brick, whereas my shack had been updated with asbestos siding in the 1950’s.  It always reminded me of the house where The Beverly Hillbillies lived before Jed became a millionaire.  It was torn down in the late 80’s and a wood shake sided house was built in it’s place.

My parent’s moved less than a year after we rented the shack next door to them.  I actually liked having my folks as neighbors except when my dad would fire up his BMW motorcycle at 6 every Saturday morning.  Where the shack sat so far back on the lot, their garage was about 10 feet from the bedroom window.  I’ve always credited my parents with having the foresight to see that Kenwick was on the verge of a transformation.  They were some of the first people to move in and fix up those old houses with something better than wall paper and paneling.  In reality, they wanted Chevy Chase but couldn’t afford it back then.  That’s how it goes for old neighborhoods.  Right now, there are people who’d love to be in the first block of Kenwick but can’t afford it, so they have settled for the second blocks.

I have a few funny memories of life in the house we rented:

1)  The mailbox was on a fence at the sidewalk.  I would park my car at the top of the driveway, get the mail, and then coast down in neutral to the house in my manual transmission car.  One day, I got back in the car, but instead of putting my foot on the brake, I put it on the clutch.  I didn’t figure this out until after I had rolled all the way down the driveway and crashed through the doors of the wooden shed at the end of the driveway.

2)  One night when my wife was away on a pharmacy rotation, a sheriff showed up after midnight to serve a warrant for the previous tenants.  After this house, I have always decided that any time I am thinking about moving to a new place, I would first randomly stop a sheriff and ask if he knew where the street was.  If he said he didn’t, then that would mean I wouldn’t mind living there.

3)  One day, I was doing some yard work and lost my wedding band.  That was kind of sad.  Some kid will be playing in the back yard 100 years from now and find it I bet.

Well, I am sad to see that old shack go.  I have a lot of good memories from my time on Lincoln Avenue.  I hope the people building this house enjoy their new place!