sellers market

Always make this your first priority when picking a house

by John Rice

Let’s face it, most houses in any price range are all pretty similar. It is rare in Lexington to get something unique in the sense of a feature or design that is different from anything else. We have old houses that mostly have the same character from the time period they were built. We have new houses with their open floor plans. We have updated houses. We have outdated houses. We mostly have houses with average lots. We also have houses with less than average lots. Basically you can pick what part of town you want, what age house you want, whether you have to have it updated or not and just like that, you’ll find about every house that makes your list is pretty darn similar to every other house on your list.

While this isn’t necessarily a bad think, it can make your house harder to sell whenever the market softens……which right now appears will never happen.

Tastes change. Things go out of style. The 90s saw a bread drawer in the corner of every kitchen plus a built in desk. Cherry cabinets were the rage. It won’t be all too long before white shaker cabinets and shiplap will become negatives to buyers rather than something that makes them want the house.

What should you do to make your house be among the best when you go to sell it? The best thing to do is pick a good lot. Why? It never goes out of style and never needs updating.

I recently sold a townhouse in a nice complex on the edge of downtown. The location is great and always will be. The thing is that about half the units are totally identical to each other. The one I sold was an end unit. That means you only share a wall with one neighbor. It also gives you windows on the other side. This unit backed to the houses in a historic neighborhood. You looked out your rear windows and saw trees and grass with the neighboring houses far away. The other units all backed to each other. This unit was on the edge of the complex. It had some greenspace across the street out front. All the others faced other units. There was plenty of guest parking and since it was on the edge of the complex, it is the least likely to be used. This was the best lot in the entire complex.

I told my buyers to picture it is 2008 all over again. They decide to sell when there are 15 other identical units for sale at the same time. Which unit is that one buyer in the market going to pick? Their unit, because the lot will never go out of style and never need updating.

$30k over list and STILL wasn’t the best offer??

by John Rice

Yesterday was sort of a bummer.

It began with a sale falling apart. My buyers had a contingency contract on a house since they needed to sell their old one first. Somebody else came along without a contingency and kicked them out. Time to start all over.

Then late last night, I found out that another buyer did not get a house on which we had submitted an offer. We went $30,000 over the list price, which was close to 10% over list. There were 22 offers on that house. My poor buyers will likely be competing with those other 20 buyers who didn’t get the house on the next new listing in their price range.

I did at least get one of my listings sold for $5000 over the list price.

It’s shaping up to be another crazy year in real estate. It’s a tough market. It’s tough for everybody except the sellers.

Why say NO to a perfect house?

by John Rice

I showed a house to a family yesterday. It was a perfect house. It was in move in ready condition. Had character. Even a salt water pool. It was on 5 glorious acres in a great location in Woodford County. It was even priced really good.

The buyer didn’t like it.

And that was okay. It wasn’t as good of a fit for he and his family as he had hoped.

He realized that having a primary bedroom on the main level was very important to him. He also realized he didn’t want to maintain that many acres.

It was a good day because we learned something. We narrowed down what he wants in a house. The simple fact is that the more houses you see, the more you learn about what you want/don’t want in your next house.

Often Buyers will apologize to me for wasting my time to show them a house they aren’t interested in buying. I always tell them that finding the right one is a process. It’s really not even about the houses. It’s about self discovery…..learning what’s most important. This Buyer now wants a big yard, but not acreage and a house with a primary bedroom on the main level. Had we not see this fabulous house yesterday, neither of us would have known this.

We are one step closer to finding HIS perfect home.

Want the lowest price you’ll see in 2023?

by John Rice

I have always said that late winter and early spring are the best times to buy a house if you’re worried about prices.

Why? Very simple.

Regardless of the temperature of the market, you are still buying at last years prices. We never know what the market will be like until the Spring buying season begins. Once the market pops for the year, prices begin to go up. The past few years they really went up.

While I don’t see this year having the same crazy appreciation, there are enough signs that prices WILL go up:

  1. There will be fewer houses for sale since most people bought or refinanced when rates were very low. We are back to people moving because they need to instread of just wanting an upgrade.
  2. Rates are stabilizing and projected to go down a little more. Every time recently that rates have gotten to about 6%, buyer activity really picks up.
  3. Aaaaaaaaand the obvious is inflation is causing the prices of everything to go up!

By the time all the leaves are on the trees, anybody who plans on buying a house will be out there submitting their highest and best offer. Your best chance to get the lowest price for the year is to get out there now. The house you can buy today WILL be worth more by the end of 2023.

How old neighborhoods become desirable

by John Rice

There are really two types of old neighborhoods. The kind that always were desirable. Think Chevy Chase Then there are those that became desirable. Think, in varying degrees, Kenwick, The Meadows, Meadowthorpe and Southland.

Chevy Chase is rare. It has never ever gone though any type of normal cycle where there is a decline in desirability. It has the perfect combination of location and character.

What is most common for older neighborhoods is to have gone through one or more cycles of decline. Most were solid middle class neighborhoods when new. Sometimes worse neighborhoods surrounded them and brought them down. Often the owners moved away to newer, more modern suburban neighborhoods in the 1950s through the 1970s. These types of neighborhoods became more and more affordable to subsequent buyers since their spot on the preferred neighborhood hierarchy dropped. Some eventually stabilized. Some keep sliding all the way to the very bottom…..like it if were a Totem Pole, they would be the part that is in the ground.

Kenwick is the perfect example of one that declined to became a stable “C Grade” neighborhood. It worked its way up to “B Grade”, then “A Grade” and is now a legit “A+ Grade” neighborhood. My family moved to Kenwick in the mid 1980s. It was just a blue collar, working class neighborhood. My parents picked it because they loved Chevy Chase but couldn’t afford it at the time. It offered 80% of the location and style for 30% of the price. Over the years I have watched Kenwick go from being the affordable second choice to standing proudly on it’s own two feet. People today pick Kenwick because they love Kenwick, not because it is all they can afford.

The modern equivalent of Kenwick is The Meadows. The Meadows saw a pretty rapid decline in the 70s as most of the new schools, shopping and dining moved towards the south end of town .What was once a solid neighborhood built in the 1950s for returning vets and first time buyers saw a lot of neglect. Many houses became cheap rentals. The foreclosure crisis hit it hard about 15 years ago. With very few affordable older neighborhoods left, it has become a good way to get into an older house and get the old neighborhood vibe for cheap. I don’t really know where future generations will go to fulfill their desire for an older house in an older neighborhood. There aren’t many left. With all the tiny 1000 square foot generic spec homes of the 60s and 70s aging, maybe we will see neighborhoods such as Woodhill, Rookwood, Cardinal Valley and Idle Hour become the trendy spot for affordable older homes. It’s the same formula after all.

Sometimes new development around an older neighborhood helps it become more desirable. Meadowthorpe is prime example of this. When new, it was on the very edge of town. It was probably originally viewed like Masterson Station was in the early days. I remember when Masterson Station was new, people we like “Nice, but why is it all the way out there in the middle of nowhere?” I think few people were even aware of Meadowthorpe when I moved here in the 1980s. It was just some random, cool, neighborhood on a forgotten end of town. Back then, being close to downtown wasn’t as cool as it is now. There was no Distillery District. There wasn’t even that shopping center with Kroger. I think what really helped Meadowthorpe was Masterson Station. Sure, the Distillery District and it’s proximity to downtown contributed, but the continuing development of Master Station solidified the west end of town being part of Lexington instead of feeling like you’re midway to Midway.

Southland is a good example of how a nice, middle of the road neighborhood becomes trendy. It already had a good location on the south end of town between everything out Nicholasville Road and UK. It has always had a good school district. It has always been a nice choice for affordable homes. It seemed like a logical place for people to live and fix up their houses. More and more people starting buying and renovating their houses just as many of the long time owners were leaving. This made prices really shoot up quite a bit in recent years. Today it is common to see extremely nice renovated homes selling for over $500k.

So, if you’ve made it this far, you can see that most old neighborhoods typically become more desirable in these ways:

  1. They already were really desirable-Chevy Chase.
  2. They declined enough to become super affordable and were rejuvenated-Kenwick and The Meadows.
  3. New development and/or changes in the areas-Meadowthorpe.
  4. They were always nice, but became even nicer and more desirable for a variety of reasons-Southland.