Madison County

Why buying now always beats waiting

by John Rice

I reckon this is sort of like a market update type of post.

I showed a very affordable house in Berea last weekend. It was very nice. Good sized. More than one bathroom. In good condition with a couple of nice features. The list price was $229k.

The house sold 15 months ago for $205k. From the pictures of when it sold back then, about all that is different is that it was vacant.

15 months ago was a little different of a market. We had just seen rates rapidly rise to about where they are today. Buyers were still in a little bit of shock. Back then I predicted that the market would pick back up as people acclimated to current rates and the period of super low rates disappeared in the rearview mirror. Guess I was correct although that was a pretty safe prediction to have made.

The house sat on the market for a few months back then. It being vacant didn’t help. If at all possible, you always want to sell your house with some furniture in it to warm it up a bit. Most buyers have a hard time envisioning what a house would be like when it is empty.

Back to today. We were one of four offers. We went $5k over the list price and waived the home inspection. Know what? We still didn’t get it.

That means this house sold for at least 14% more in those 15 months. That’s a really good return for not having done any updates and in a small town that isn’t really considered a hotbed for growth.

I am totally sure that the seller of this house was anxious about their purchase 15 months ago. They probably felt like they paid top dollar for it and were anxious about their interest rate. Want to be this person? All you have to do is think about where you’ll be a year, five years, ten years down the road and not focus on today’s fear. Other than the Great Recession, it’s hard to go wrong with homeownership.

What’s it really like living in the country?

by John Rice

I’ve been in the sticks for almost a year now. I get asked this a lot. For the most part, it has been everything I hoped. I enjoy it. I did have some concerns before we moved, and of course there are a few things I had not thought about.

My biggest concern was getting stuck out here in the winter. I don’t know why, but for some reason ice on my street in the country bothered me more than ice on the street at my old house in a neighborhood. It was about two miles inside the neighborhood at my old house before I got to well maintained road. Well, I live about the same distance from a major state highway. Guess what? Two miles of ice is still two miles regardless of where you live. The good thing for me is that my road gets plowed and salted faster than my old neighborhood road did. My next door neighbor out here is the police chief, so I guess they want him to be able to get out easily if there is an emergency.

I was worried about crime. That is probably because having grown up in neighborhoods, the thought of nobody being close by was scary. That’s been a non-issue. Only your neighbors drive past your house unless you live on a main road and there seems to be a real strong sense of respecting the property of others out here. And for those that aren’t so respectful, they assume everybody has a gun so they don’t really want to risk getting shot at for your stuff.

There are really only two things that I didn’t think about. Neither are big deals thankfully.

The first is that most people in the country keep to themselves. My neighbors will wave to me. Several stopped and introduced themselves to me when I was new. But most of the time it is just like a neighborhood where you mostly just smile and wave. I guess small talk is harder to do at the mailbox when your houses are so far apart.

The other thing, and this one is what bothers me the most, is that there are no storm sewers. In a neighborhood, the rain water runs neatly down the curb into the storm sewer and disappears. Out in the country, the water runs down a hill, crosses the road leaving mud and gravel for daaaaaaaaays after it quits raining. This probably wouldn’t bother me if I wasn’t trying to keep my cars clean. As soon as it all dries up, here comes another rain to do it all again.

And that’s it. Other than these few things, it really isn’t that much different than I expected. Sure, I have to drive longer to get anywhere and I have a lot more grass to mow. That is totally worth it to me to get the peace, quiet, calmness and beauty that county life offers.

I love showing rural properties. Nothing like a fun drive in the country and then getting to see a house and some land. Here are the counties I work in for both rural and neighborhood properties: Fayette, Scott, Jessamine, Clark, Madison, Woodford, Bourbon, Montgomery, Franklin and Garrard Counties.

Something more important than location?

by John Rice

Yeah yeah yeah.  We’ve all been told by real estate professionals for years that the single most important thing when picking a house is it’s location.  I’m telling you right now that there is something even more critical than that.

Let me tell you a few things about location first.  It’s subjective.  People pick where they want to live for lots of reasons:  Proximity to main roads, their job, schools, parks, low crime, etc.  It’s always a compromise too.  One buyer may be willing to be far from parks if their kid can be in a better rated school.  Another buyer may be willing to put up with a higher crime rate if it is super close to their job…..so, one person’s great location may not be as great to other buyers.  Also, locations are sort of price dependent.  What is considered a good location for somebody with a $100k budget will definitely be a bad location for a $400k buyer.

What do ALL buyers have in common though when picking a house?  They all want as good of a lot as they can get.  In all 15 years of my career, I have never had somebody say they wanted a house that backed to a busy road, had a steep driveway, lacked privacy or had a backyard that was unusable due to a slope.

Why is the lot so important?  For starters, it is often a buyers first impression.  If a buyer tries to pull in the driveway and their car scrapes the pavement, bad sign.  If they are out of breath before they get to the front door, bad sign.  If they step out of their car and can hear New Circle Road or the Interstate that is behind the house, bad sign.  Additionally, the lot affects just about anything you do with the property.

What should you look for in a lot?

  1.  As flat as possible is the biggest thing around here.  Lexington is pretty flat.  The severely sloping lot is unusual here.  Go to Richmond or parts of Scott County and it is more common.  For what’s it is worth, nobody has ever told me they didn’t like a house I showed them because the lot was too flat.
  2. A nice view is always a plus.  If you can’t get a good view, then no view at all is safe.  We don’t have a lot of greenspace views and even fewer water views in Lexington.  It is totally okay to just have a flat backyard that backs to other houses.  I would avoid backing to anything than other houses, such as businesses, apartments or a road…..and ideally it backs to houses that are equal or higher in value than the one you’re viewing.
  3.  Get a lot size and shape that is normal for the neighborhood.  If you are looking at a house that has a tiny or oddly shaped lot unlike any other in the neighborhood, don’t buy it.  The same doesn’t always apply for lots that are bigger.  Most of the time the biggest lot in the neighborhood is the most desirable unless it is in a neighborhood where the most likely buyer will be a retiree or somebody downsizing to get away from a lot of maintenance.
  4.  I would avoid a corner lot if possible.  There are a few buyers who prefer a corner lot but most people view them as twice as much sidewalk to deal with.  Plus, most neighborhoods only allow you to fence a corner lot from the rear edge of the house, meaning that you have much less space if you want to fence it in.  (I’ve got a good friend who looooves his corner lot and will likely find out I said this…..sorry Peter!)

Want to know my absolute favorite thing about getting a good lot?  It never needs updating and never goes out of style.

 

Bluegrass market update & fun with a calculator

by John Rice

I’ve always been a number person.  When I was a kid, my dad gave me a calculator.  I would make pretend budgets, figure out things like compound interest, and do things like type 77345 and flip the calculator upside down to see that I spelled ShELL.

So I guess I am not surprised that I get excited when my local real estate board publishes the statistical info once a month.

It is also nice to see if my own experience is echoing what is happening in the whole market.  It usually is.

For example, I hardly show any houses any more because there is so little for sale.  I used to be out 3-4 nights a week and ALL weekend just showing houses.  Now I may show 4-5 a week and have the same amount of buyer clients……on a busy week.  There just aren’t enough houses to show people, and buyers are making fast decisions because they don’t want to lose a good house while waiting for a great one.

In Fayette Co, sales from Jan 18- April 18 are down 11% from the same period in 2017.  Listing are down 9%.  You’d think a decrease in sales would be bad, but since listings are down by a similar number, it is still a super tight market, especially in the sub $200k range.

All the Bluegrass counties have a big decrease in listings.  Most have an equally big decrease in sales too.  Makes sense.  If there are fewer houses to buy, there will be fewer houses sold.  Unless you are in Scott, Madison or Jessamine Counties.  Those places are the only ones where sales have increased from this same time last year while listings have decreased.  I know, I know.  How can that be?  This is just my gut, but I think those counties had more on the market last year that just sat and didn’t sell.

I also feel like I am spending more time in surrounding counties than I have in a long time.  When I first got into this business, there were a lot of people moving to Jessamine Co in search of a cheaper house.  But then gas prices went crazy and nobody in Fayette County wanted to leave.  Now gas is fairly cheap and people have returned to moving outside of Fayette Co again.  Jessamine County has the tightest market under $180k.  There is literally next to nothing for sale there.

Just this past March, we had a net loss of 61 households in Fayette County.  Scott and Jessamine Counties were the only ones that saw much of a gain in new households.  Yep, Fayette County folks are back at it.

I still play with my calculator a lot.  Only now I’m using it to determine what a house is worth before listing it or making an offer.  Maybe with all this extra time I have from not showing houses every night, I can figure out some new words my calculator will spell?