lexington kentucky blog

100% fool proof way to time the market

by John Rice

“Is now a good time to buy or sell, or should I wait?”

I get asked this a lot.

My reply is that while there might be times that are statistically slightly better or worse to buy or sell, the timing has more to do with you than the market. I secretly think it is us Realtors who came up with the whole timing the market thing. Ever notice we always have a good reason for right this minute being your best time to buy or sell? Prices could go up, buy now! Rates could go up, buy now! Rates dropped an eighth of a point, buy now! There will be fewer houses on the market in winter to compete with, sell now! More buyers are out in the spring and summer, sell now!

Is there something in your life making it a good time for you to buy or sell? Maybe you are getting married, got a job in a new town, getting divorced, having a child or any personal reason for a move? Then the time for you is now.

Another reason is when the perfect house hits the market.

No two houses are totally identical. Sure, some new ones can be extremely similar, buy even they are not 100% the same. I recently had a friend and his wife find a house for sale on a street they have always dreamed about. We viewed the house. They fell in love. An offer was made and accepted. The time was right because they wanted it and it was suddenly available. Who knows when the next one on that street, which only has 30 homes, would be available?

Sometimes you have no control over the timing.

I recently had a similar experience but with car buying. I am really into older BMWs. A friend of mine had a 1987 BMW 535i that had been in his family since new. It was bought locally and has been in Lexington ever since. It has been maintained by a shop owned by a friend. A family friend was the sales manager at the dealership and I have a document signed in 1987 by him in the glovebox. I had always drooled over this car since it was in really good cosmetic condition. There are few left that are as nice as this one.

My friend called me up one day out of the blue saying it was time to sell it. He asked if I was in the market. I told him I was not actively looking, but I was in the market NOW since the right car presented itself to me. He knew the time was right for him. I knew the time was right for me. He did not wonder if he could have gotten more by waiting. I did not entertain the thought of waiting for the next one.

You are in the center of your real estate decisions. Do what is best for your needs and don’t worry about it…..and according to us Realtors, now is always a good time, LOL!

Where are the entry level brand new affordable homes?

by John Rice

When the ink on my real estate license was still drying, Lexington was already getting pretty expensive for first time buyers. Yes, I know $150k for a brand new home in Masterson sounds absurdly cheap right now, but there was a time when that was just beyond the reach of your then millennial first time buyer. Back then, your choice for entry level new construction money was a 2 bedroom/1.5 bath townhouse in Lexington or a 3 bedroom/2 bath ranch in Nicholasville.

Nicholasville was close to Lexington. Even closer now. It was just another 20 minutes of driving to get a better house. That was enough for all those My Space loving kids to pull the trigger. You got your own yard, a two car garage and didn’t have to share a wall with anybody.

Where is that happening today? Richmond. A quick search for brand new 3 bedroom/2 bath ranch homes under $300k shows that. Yeah, there are a few in Georgetown but not many. Forget about it in Lexington. Nicholasville? Nope. Nicholasville has become a legit suburb of Lexington. The market there is now more mid and upper level homes for new construction.

Best question to ask your Realtor

by John Rice

Where is the best place to spend (insert your budget here)?

That is the single best question to ask your real estate agent if you are buying in an area you know nothing about.

I recently worked with an out of town buyer who found a for sale by owner home in a town not too far outside of Lexington. It was a very nice home. Seemed to offer a lot for the money. Large lot. Great view. Nicely updated.

I could not recommend this house though.

My buyer asked me a few questions about this home. I told them that while it is a very nice house, it is NOT in a neighborhood most people in this small town pick at this higher price point. I then mentioned a very popular neighborhood in this town, saying that is the one most local people find the most desirable. I then said that to local people, that super desirable neighborhood is the one they grew up with as the pinnacle place to live. If they reach the point of being able to afford that neighborhood, they move there. I also told them the house they were interested in will likely sell to an out of town buyer who doesn’t know anything about the local real estate market.

Well, when I went to check on the comparable recent sales in this price range, guess what? Almost ALL of the recent sales were in that exact neighborhood I mentioned. Know what else? My buyer told me that the seller had told them that almost everybody who has seen the house was from out of town.

And all this is why you should ask your real estate agent where is the best place to buy within your budget. You do not want to get stuck with a house that will later be hard to sell because you knew nothing about the local market.

Which is better? Older or newer homes?

by John Rice

I often get asked by buyers if they should buy an older house or a newer house. My usual response is to say that it depends on what kind of problems they want to have. I get crazy looks when I say that, but it is just my way of telling them that all houses will have problems. If you don’t have one now, just wait because your newer house will become an older house quicker than you think. Basically, it is your house verses Mother Nature and Father Time……and those parents usually win.

I have lived in both older and newer houses all my life. When I was a kid, I went from a 1910ish four square to a 3-year-old ranch. Next, my parents bought a house in Kenwick  from the 1930s. My first house was built around 1915. My second was 1973. Then from 1997 and 1986, plus a collection of rentals built from the 1940s through 2006. All of them had things to deal with. 

There seems to be this misconception that old houses were built better. True, MOST were built with more care than today’s homes are. I say most because my first house, the one built around 1915, was nowhere near as well-built as my parent’s Kenwick house from the 1930s. I thought it would be, but once I moved in, I started to realize it wasn’t.

Old House misconception #2 has to do with today. Many people think that any older house is better than any newer house is today. After living in a lot of older houses and showing a bunch to my clients, I can tell you that what it comes down to is maintenance. Even the best built house from yesterday will be nothing but trouble today if somebody didn’t keep it up. Remember, an older house has been in the ring with Father Time for more rounds than a newer house will have.

Here are some of the common old house issues: Inadequate electrical, plumbing, insulation, lack of maintenance, and poorly done improvements to any of those prior items.

Newer house issues: Rushed construction by unskilled/uncaring workers sums it all up the best. I have a friend whose house was practically rebuilt after a fire. It had no insulation on one side of the house because the drywall contractors showed up before the insulation contractors were done. On my house from 1997, poor mortar joints on a brick window sill allowed water to run down the inside of the brick veneer and rot some of the sill plate. I only found it out when I did the demo for a new floor in 2010 when it was only a 13 year old house. If today’s workers would apply to their trade the same care they use to draw naked women in their potapotties, we would have the best built houses of all time!

Occasionally I do see both a really well-built newer home and a fantastic older home. I represented a builder who did a great job of making decisions that the buyer wouldn’t even begin to appreciate for years to come. He did a lot of little things way above minimum code. I also just sold an older house that had been well maintained and had recently been overhauled by a good contractor. That combination made it a pretty unique older home and a good pick…..I guess that buyer got the best of both worlds and none of the negatives!

Best advice when buying a home

by John Rice

It is amazing to me to think about the extreme markets I have seen.

I spent most of 2011 until COVID giving advice based on my experience of seeing how hard it was to sell ANY house during the Great Recession.

I think I will spend the next decade giving advice based on my experience of seeing how easy it was to sell ANY house right after COVID.

We are now back to a more normal market. Inventory is up a little, but seems really high compared to the days of only 3-4 houses being on the market in any price range.

I recently had an out of state buyer. It is always fun when somebody rolls into town with a mission of finding a house. I get to literally see almost any house worth considering, and all within a few days.

I sorted through about 90 houses in their price range. I narrowed it down to about the best 15 houses. Man, it sure was nice to be able to do this. I haven’t been able to do so in many years. Just not too long ago, there were not 90 houses for sale in all prices ranges in the whole Bluegrass area.

Many from this list were new listings. Most sold immediately. We ended up finding an ideal home that was clearly the nicest in it’s price range since there were multiple offers. After going over the list price, waiving inspections and paying cash, I am happy to say it closed last week.

The whole time I was out with these buyers, I was thinking about those other 75 or so houses for sale. I am sure none of them had back to back showings like practically every house I showed my clients. A couple of years ago, any of those houses would have gotten multiple offers the first day and possibly sold for over the list price…….but not today. Today they are nothing anybody wants. They all had some bigger negative like being on a busy road, in poor condition, a bad lot, etc.

Which takes me back to some timeless advice I have been giving for years: Buy a house that will be easy to sell in a bad market. Buyers in any market all want the best house available to them. I remember getting multiple offers on listings in 2009 when there were literally hundreds of houses available to those buyers who all wanted my listing. What house is that? One with a good floor plan. One with a good lot. One that is in a desirable location. One that fits into it’s neighborhood nicely. One that has no big negatives. One that has at least one unique feature that gives it a little pizzaz. How will you know this house when you see it? Take me along and I will let you know.