Nicholasville

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.

When a nice house is a bad choice

by John Rice

Some houses are just a bad choice.

I was out with a buyer this past week. We looked at several new/newer homes in neighborhoods all over town. All within a similar size and price range too.

One house in particular was on my buyer’s radar. It had a 3 car garage. He liked that. Being a car guy, so did I!

Before going to see the house, I looked at the recent sales in the neighborhood. I found that most of the houses were 1400-1600 square feet and were selling for $270-290k. While there were several lots left to build upon, my realtor red flag was raised and frantically swinging when I saw the house we were going to see was also about the size and was priced at $340k. I am probably somebody who personally would pay a premium for that third garage spot, but even I wouldn’t pay $50k more for it.

I thought perhaps the house had some other features that would make it stand out from the significantly cheaper ones that made most of the neighborhood?

Once we got there, it was clear that the third car garage was about the only difference. Upon viewing the house, I noticed that the primary bedroom was sort of small compared to other new homes in the same price range. Also, all the backyards were really small in the whole neighborhood. The location of this neighborhood was also what I would call less than Grade A.

So, what did I do? I told my buyer that I just did not see this house being worth $50k more just for the garage. I also told him that when he goes to sell it, buyers with good realtors will tell their clients the same as well as how the backyard and primary bedroom were small. Long story short, I think this particular house is always going to be harder to sell and likely won’t appreciate as much. I think this neighborhood is a fine pick though for any buyer wanting a new/newer home whose budget tops out at under $300k.

My buyer saw what I was saying and while he would love to have had that huge garage, he chose another house.

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.

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?

How I won in multiple offers

by John Rice

I was working with a client for several months who was buying in Nicholasville.  The market there is even worse than it is in Lexington for a sub $200k buyer since there are only about 8 neighborhoods to choose from.

A great house came on the market.  I scheduled a showing.

I just knew this would be the one.  I checked out the recent sales in the neighborhood to get an idea about what this house was worth.  I even prepared all the docs my buyer would need to sign so we would be ready to go.  All I needed to do was fill in the offer price and have her sign it from her phone.

We looked at the house.  It was a winner.  I call to tell the listing agent that I just sent an offer and was told that there was already one offer on the table and another one was coming.

We revised our offer to be slightly over the list price.  I asked all my usual questions that can help with getting an offer accepted……When would the seller like to close?  Do they need delayed possession?  Would they like the inspection type where the buyer either takes it or leaves it after the inspection?  Other than price, what would the seller’s ideal offer be?

The seller didn’t need anything special, so I knew this one would come down just to price.

A few hours later I get a call telling me that the third offer arrived and it had an escalation clause.  That made me pretty nervous.

I tell my buyer this and suggest we also do an escalation clause.  I tell her that the default setting for most agents is to offer $1000 more than the highest offer, so we better do more.  Otherwise all we would accomplish was knocking out the third buyer.

She agreed to a number we discussed and that she would pay that much higher than any offer up to certain price.  The list price was $192,900 and all the offers were higher than that.

I was a nervous wreck all day.  I really wanted to see my buyer get this house.  It was perfect for her and she had been waiting so long to get a house.

Finally, I get the call that she won the house.  Turns out all the offers were $194k, and the other offeror’s escalation clause was the predictable $1000 that I suspected.

It was sort of funny for me because it was the first time I had ever called to tell a buyer they had just bought a house and they didn’t yet know what they were paying for it.  I tried to make her guess, you know, like she was a contestant on The Price is Right, but she was so anxious that she said “JUST TELL ME THE PRICE!!”