Random Real Estate Thoughts

What’s Masterson Station Gonna Look Like in 20 Years?

by John Rice

I’m thinking about a neighborhood in Lexington that was built on the edge of town when it was new….Mainly starter homes, but there are a fair amount of move up houses too….it is really made up of several different neighborhoods, but now the identity of each one has kind of been lost and everybody thinks of it as one giant area.  Sound like Masterson Station, I mean “Masterson” as many people call it now?  Sure does, but I am talking about Century Hills/Hunting Hills/Squire Oak/Cove Lake/East Hills/East Lake/ Summerhill and any other ones that I may have left out between Richmond Road and Armstrong Mill outside Man O War that were developed in the 1980’s.

When I moved to Lexington in 1985, that was the new place to be for first time buyers and people moving up.   We had some family friends that rented a house on Squires that was the last house on the street and still had the old Squires Road behind it before it was turned into a walking trail.  They ended up building a brand new cedar sided contemporary house a few blocks away in Eastlake.  I remember thinking how nice it was out there.   Also back then there was a distinct difference between all these neighborhoods, but now most people seem to refer to the whole area as the Buckhorn or Squires or Kenesaw area.

So, what do I think Masterson Station and all the derivative neighborhoods will be like in 20 years?  You got it….just like the Buckhorn/Squires/Kenesaw area is now.  You’ll have some really nice areas and some that are a little run down.  Some that are mainly owner occupied and some that are heavy on rental houses.  You’ll go 3 blocks in one direction and be very pleased with the houses, and 3 blocks another direction and be disappointed. 

It is already getting a little like that in the Masterson area.  There are some sections that I don’t recommend to my clients and some that I think are wonderful, and the wild thing is that they all co-exist in what is viewed as the same neighborhood.  I’ve sold 5 houses out there in the past year or so, and fortunately all my clients picked promising sections of the neighborhood!  Some of my favorite parts of Masterson are in the older sections that were done by PSC, Cutter and Ball Homes.  It is pretty much the part that is between Masterson Station Drive and the Park….roads like Trailside, Masters View, Meadow Valley,  Woodlawn, Valley Brook and Lemon Drop…I just love to say Lemon Drop.  One of the things that makes this part so nice is that some of those streets back to Masterson Station Park.  Having that asset helps make it desirable just as having some lake view lots has kept up the value on some streets in the Buckhorn/Squires/Kenesaw area.

So there you go…….Now you know what Masterson Station will look like in 20 years.

Lexington Ky Realtor News: C’Mon down, YOU’RE the next seller in today’s market!

by John Rice

It is no news that the market is really slow right now in Lexington.  Ever wonder how that happened?  How the market works?  How the recent tax credit factored in?

Well, here is how the market works.  It is like the food chain, and first time buyers are the bottom feeders (no offense-just mean you guys are the entry point that drives the whole thing.  You are really the most important people out there!)  The entry-level houses get bought by people who don’t have to sell a house, which enables the sellers of entry-level houses to move up, which allows the mid priced home seller to move up to a more expensive house, and so on and so on.  The bottom line is that the bases are loaded, and the first time home buyers get to be the ones that hit a home run and clear all the bases.  Without them, everything gets stuck since most other buyers need to sell first.

So, this first time home buyer tax credit comes along, starts pushing through a lot of sales.  Just about any first time buyer who was going to buy this year wrote an offer by April 30th.  The entry-level seller got to be a mid priced home buyer, and the mid priced home seller got to be a higher end buyer.  Since most closings seem to take place about 30 days after an offer is accepted, that means a lot of activity for everybody in a short period of time……a time that is past.

Right now, the amount of houses on the market is rising.  Personally, I think we have seen an increase in listings because many sellers saw all that activity in the early summer and thought they’d jump in.  More listings and fewer buyers means……well, that it sucks to  be a seller right now.

Where is this thing going?  Lexington has always had a pretty stable market.  I figure that if we weathered the past few years and came out with only a few scratches and bruises, we can survive anything.  This can’t last forever you know…..and all the people who put their house on the market and priced them based on what they need out of it aren’t going to sell their houses anyway.  As long as there is a market, the best houses will always sell.

What is a seller to do?  If you read my blog, you know I am thinking about great pictures and marketing remarks to make it stand out online……but the SINGLE thing that buyers are attracted to now is P-R-I-C-E!  In the past, sellers could throw in closing costs, a TV, vacation, or offer a bonus to the buyer’s agent to get attention.  Those things are as yesterday as solid surface counter tops.  Here are some truths about this market:  You can have a beautiful house that won’t sell if the price is wrong.  You can have a fantastic location, but never get it sold if the price isn’t right.

When I typed that last sentence, it reminded me of one of my favorite childhood shows, The Price is Right.  I always got a kick out of the people who made it to the Showcase Showdown, then over bid the value of the showcase, lost, gave the winner a hug, and walked away.  Just like the showdown, you either win or get to hug the person who did.  If you’re a seller, which person do you want to be?

Guess what neigbhorhood I am talking about?

by John Rice

I wanted to tell you all about a fantastic neighborhood.  It is right off New Circle Road, has plenty of shopping right in the neighborhood….even a grocery store.  It is a large mixed use neighborhood that has everything from apartments to upscale houses. …even has new public schools right in the neighborhood.  Do you know the one I am talking about?  Sound like Beaumont to you?  There is a little twist here…..The year is 1973, so I am referring to Eastland!

Yep. Eastland.  Eastland was the Beaumont of the early 1970’s.  Kind of scary when you think about it, but how neighborhoods change over time is the topic of today’s post…..How can this happen?

For Eastland, Lexington grew on the Southside, which is probably the biggest single thing that made it lose it’s luster.  Then the shiny new apartments started to decline, the schools were no longer new, sprawling ranches, split levels and split foyers fell out of style, and Eastland Shopping Center became just another old strip shopping center.

Let’s look at some things that replaced many of these formerly trendy items:  Enclosed shopping malls, smaller lots, McMansions, and living on the outskirts of town.  I find this funny since NOW the trend is smaller houses (ranches are hot now!), living closer in town, and free-standing shopping centers where you can park at the door, run in, run back out, drive 100 feet, and do it all over again.  I guess what comes around goes around.

So, I guess my message today is kind of ecclesiastical.  It is basically that whatever reason causes people to pay top dollar for a house today will, in time, be the same things that will cause it to decline in value.  I talked to a neighbor at my old house, which is in Tates Creek Elementary and Middle district.  She said that one of the reasons they built their split foyer in that neighborhood back in 1972 was because her kids could walk to those brand new schools just up the road…..the same ones today that make people chose not to buy in that area.

Can you see these things having an effect on a neighborhoods value:  Energy costs?  The Economy? Aging Boomers?  The shift in mindset of living within your means?  Busy lifestyles that don’t allow time for maintenance? All those are just as real as how the car has changed where we live and what we consider close, how air conditioning took us off the front porch, and how the formal living room has all but disappeared through lack of use.

 The bottom line is that schools get redistricted, finishes go out of style, lifestyles change, and there will always be a new neighborhood to knock the top ones off their throne.  When I moved here in 1985, Hartland was THE place.  Then came Andover Forest, Palomar and Firebrook.  All still nice neighborhoods today, but when new, they were revered the way Beaumont is today……and Eastland was in the early 1970’s.

Lexington Ky Real Estate: Tips to take some drama out of the deal

by John Rice

Sometimes real estate can be a pretty dramatic biz to be in.  I’ve always said that you know you are in an exciting field when they make TV shows about what you do.  No TV show I have ever seen was about the life and times of an accountant or librarian…….well, unless it was on BBC.

Most of the drama I have ever seen or heard about seems to revolve around either misconceptions or things that weren’t spelled out clearly…….So here are a few things to think about on your next real estate deal:

1)  Negotiating a price is the first stressful thing.  I have NEVER seen a seller feel like they couldn’t have gotten more out of their house, and have rarely seen a buyer feel like they got a bargain.  I don’t know how many deals I have had nor how many offers I have written, but my experience is that houses usually sell for what they are really worth.  I guess my advice here is to expect to pay a price that is within the range of the comps.  This is one of the toughest parts of real estate.  I’ve seen people get down to haggling over a few hundred dollars.  By the time you get to that point, you are really just trying to win.  Most of the sellers I have seen that have tried to win this battle end up losing……and it is kind of a hollow victory when you didn’t sell your house……or if you are a buyer who has to keep looking.

2)  Write everything that you expect to come with the house in the contract.  I just had a listing where the buyer’s agent didn’t write anything in the space for that type of thing.  That meant that we really didn’t have to leave all the appliances, blinds, window treatments, or anything else that wasn’t really a part of the house.  I also just had a deal where a seller didn’t leave a framed mirror over the vanity in one of the bathrooms, and the buyer thought it should have stayed.

3)  That closing date on our contracts is really just a target date that we are all working towards.  It is not a firm committment and there is no penalty for going past it unless that is added.  The lingo used to make it a firm time is “Time is of the essence.”  Only when you see that is the date binding.  One of the reasons for this is that we can’t really hold the buyer’s feet to the fire on the timeline because they are not fully in control of the process if they are getting a loan.  As a buyer, you usually don’t want to write “Time is of the essence” because if your loan isn’t done on time you could face a penalty.  Sellers don’t have to do anything except move out……and I’ve only seen that happen once (Talk about drama.  That was a mess!)

4)  Another high tension spot is dealing with the inspection.  A seller almost always feels that they have lived in the house for so many years just fine and shouldn’t have to do any repairs.  A buyer always feels like they shouldn’t have to buy a house with a problem.  I’ve only had a few times where the seller just totally refused to do any repairs.  Most of the time they will do some, but not all of the repairs.  I think when you expect the seller to not do much, you open yourself up for a pleasant surprise.  When you expect them to do it all, you will certainly feel disappointed.  You know it is a true compromise when ain’t nobody really happy.

5)  Next is the Final Walk-Thru.  I’ve not seen to many problems happen here, but this is where it becomes obvious that there was some confusion about what was to remain in the house if you didn’t follow my advice above in item #2.  In an ideal world the seller leaves the house fairly clean and hasn’t filled all the garbage cans nor left stacks of garbage on the curb…..but that happens sometimes unless the closing is on garbage day.

All of these suggestions will help……but there is still no guarantee you’ll have a stress free transaction.  Things go wrong in real estate.  Just take a look at all the people involved in a typical deal:  Buyer, buyer’s agent, seller, seller’s agent, home inspector, appraiser, loan officer, underwriter, closing attorney.  There are so many opportunities for an “i” to not get dotted or a “t” to not get crossed that I am surprised when everything goes well.  While you can’t control everything nor everybody involved in a deal, you can control how you feel.  It is too easy to focus on the things you don’t like.  Remember that you are about to either get rid of your old house or are getting the house you picked out of all the ones available to you……..and focus on that!

Real Estate Catch Phrases….EXPOSED!

by John Rice

Ever hear folks say things that just make total sense when they say them…..but then you get to looking at it beyond face value and realize that it doesn’t always apply 100% of the time?  Back when I was a kid, people around here would put bags of sand in their trunks for the winter.  The logic was that it would add weight to the back of your car and help with traction in the snow.  That is very true…..if you have a rear wheel drive car.  I remember in the 80’s when front wheel drive was starting to become common.  In the late fall you’d hear people with front wheel drive cars say it was time to get their sand bags.

Same thing happens with real estate.  We’ve all heard some of the following thoughts that in general are true, but don’t really apply to all situations all of the time.

1)  Location Location Location:  While generally true, I’d like to see this one replaced with “Location, Price, Condition.”  Why?  I’ve seen too too many houses in a prime location sit on the market because the price and/or condition weren’t right.  You just can’t price your house in a prime spot equal to others in your neighborhood if it isn’t an equal house.

2)  You can get a good deal with a For Sale By Owner:  I hope I am not offending anybody here, but in all the FSBO houses I have ever seen, all of them have been grossly over priced.  Let’s face it, people go the FSBO route because they want to save themselves some money.  For somebody who thinks they can pocket the commission savings, it is easy for them to think a buyer should also pay what they feel their house is worth…….But it is the buyer who always gets to determine the value of a house.  You’d think seeing houses in some parts of the country go for 30% of their previous value would testify to that fact.   That is why sellers usually end up listing with a realtor.  The day sellers figure this out is the day you’ll start seeing a lot of realtors lined up to give plasma.

3)  Go Neutral:  I must admit, I generally tell people to paint bold rooms beige, and when they remodel, go neutral.  The reason is that if 10 people come to your house when it is for sale, 10 people won’t be offended.  However, 10 people probably won’t fall in love with it either.  If you have something with some character and 10 people come in, 9 won’t like it at all, but that 1 that does will probably buy your house and give you top dollar.  I have cherry floors and slate in the bathrooms.  I polled my Facebook friends to see how they reacted to slate.  About half loooooved it and half didn’t.  Same thing with my friends.  Some see it and want to touch it and keep looking at it.  Then some give me a look like they are trying hard to not ask why I picked slate!

4)  It’s better to have the cheapest house in an expensive neighborhood than get a nicer house in a cheaper neighborhood:  This one can bite you on the bum.  The problem is that the buyers who will be looking in the nicer area will probably expect more than the house has to offer.  Also, buyers who will be looking in that price range may elect to get more house and skimp on the location.  Going this route is best for somebody that plans on improving the house to the standard of the neighborhood since it gives them a better chance to recoup their money.

5)  You’ll get your money back out of an improvement when you sell:  I don’t hear this as much since the market slowed.  Even when the market was super dooper hot, you never got 100% of what you spent back, and you certainly don’t today.  Another thing to remember is anything you do to your house has a life span.  The more of its useful life span you pass on to the buyer, the more you get back.  A good example?  Carpet.  It only really adds value if it is new.  Imagine if you saw a house for sale and it said “New Carpet in 2005!!!!  Not gonna get your blood boiling is it?

6)  You need wiggle room in your pricing so buyers can think they got a good deal:  I just blogged about this one, so I won’t spend much time here.  Think about this though…..Do you think pricing your house without wiggle room will get you more showings than the sellers who have their house overpriced?  Buyers are online looking at houses they want to see in person.  A realistic price makes your house stand out in comparison to the others and they come out to see it.  You need showings to get an offer.  I have never had a buyer tell me to make an offer on a house they haven’t been in. 

That’s it for today and my “Deep Real Estate thoughts by John Rice.”