The LEXpert

Is building the answer?

by John Rice

A lot of people think that we need to build our way out of the shortage of houses for sale.

I don’t.

The only places left to build in Fayette County are on the edges of town at a time when there is more and more interest in living closer in.  No builder is going to use the little bit of land we have left for anything less than a $173,950 house, which is the base price of the cheapest model Ball Homes will build in Masterson Station.  A quick search on LBAR shows the cheapest actively listed new construction home is $202,900.

I think the problem is affordability for first time buyers.  I have always said that it is the first time buyer who greases the entire real estate market.  They are usually the only group that doesn’t need to sell a house in order to buy.  It is like the bases are loaded and the first time buyer is the one who hits the home run so everybody standing on all those bases gets to move.

A lot of first time buyers are and will continue to look outside of Fayette County.  They will look in Lexington neighborhoods they would not have considered 10 years ago to make their numbers work.   They might even consider a townhouse or condo.

Like my baseball example, the bases are loaded.  The first time buyer is waiting to hit their home run, only there are no balls being thrown.  If more affordable houses come on the market, it will make sellers in all price ranges less worried about finding their next house.  Sellers know they can sell quickly but are worried about finding a house.  Remove that fear and we’ll have more houses for sale.

I thought this was a seller’s market?

by John Rice

It is, but that doesn’t mean all price ranges are super hot right now.

I was doing a market update for a listing I have.  I try to keep my sellers up to date with what has been listed, pending sales, price reductions and closed sales that will become comps for an appraiser.

 

Check out these stats for single family homes in all of Lexington:

$100-150k has 34 listings.

$150-200k has 52 listings.

$200k-250k has 67 listings.
$250k-300k has 64 listings.
$300-350k has 106 listings.
$350k-400k has 68 listings.
$400k-450k has 38 listings.
$400k-500k has 40 listings.
If you’re a buyer in the $100-150k range you better do whatever it takes to get a house, your market is sizzling.
If you’re a seller in the $300-350k range, I would suggest a price reduction because you are not really in a seller’s market at the moment.
Why is this?  Nobody can say conclusively, but my experience is that most sellers in the $100-200k range move up to the $200-300k range.  Most sellers in the $200-300k range move up to the $400k and up range, so that leaves a vacuum in the $300-350k range.

The perfect day in real estate

by John Rice

I just love warm weather.  I love being outside.  Feeling the sun and seeing the blue sky.  Driving with the top town.  Meeting clients.  Looking at houses.

I had one of those perfect days this week.

It started out by showing a fixer-upper to some friends who want to get into the rental market.  We always have a great time and they always pick interesting houses.  The one I showed them this week had two baths, which is normally a good thing…..only the 2nd bath was where a closet use to be.  I am glad I took a picture because there is no way I could possibly describe it.

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From there, I drove with the top down in the M Roadster to see a house on 10 acres with a pool.  I had to wear a hat to keep my forehead from burning.  I normally would have been a little anxious about having “Hat Head” but the buyer is a repeat client that I really like….he knows I am no fashionista.

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I had a couples hours of down time before heading to Jessamine County to show the next house.  I took all back roads to get there because I’d rather have a pretty view and be moving than stuck in traffic.  This place sits on an acre and was a super cool house.  My clients have two young sons that are always a lot of fun to talk with.

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I wrapped up that showing close to sunset.  I had a nice drive home with the cooler evening temperatures on the same back roads, only this time heading towards home.

Great clients.  Great properties.  Great day!

What working with buyers is like now

by John Rice

Working with buyers these days feels like this guy:

You beat the same bushes everyday in search of something for your people.  It is even harder if somebody needs a certain neighborhood or school district.  It is the toughest market I have ever seen for buyers.  It is harder right now to be a buyer than it was to be a seller after the market crashed.  Most houses get multiple offers.  The deciding factor often comes down to something minor like which buyer has a better closing date, or which buyer has stronger financing.  That is about all you have left to differentiate one buyer from another when all the offers are full price.  I recently got 7 offers on a listing.  The top 4 of those offers were the exact same price.  We went with the one that had a local lender I knew.  That was what got that buyer a signed contract.

 

And when you do finally have a house to show your people, this is what it feels like:

When a house that meets your buyer’s criteria hits the market, you get them in it ASAP.  If they like the house enough to make an offer, you rush to make sure you’ve got a current preapproval letter, you find out when the sellers would prefer to close, what their occupancy needs are….anything the sellers want that might help your buyers look more appealing since you know the best offers are going to be similar in price.

Being a buyer’s agent these days is equal parts boredom and excitement…..but it is all very rewarding when you do get your people a home they love.

How I grew up to become The LEXpert

by John Rice

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A little tubular box just like this one is what got me into real estate.  I remember all the times I sat in my grandparent’s family room and the thrill of pulling that plastic top off the cardboard container.  My grandfather would be sitting in his green plaid Lazy-Boy recliner watching golf or some sport on the 19 inch TV with a rabbit ear antenna.  The room was paneled.  Had a giant brick fireplace that took up most of the wall.  I would sit and built houses with these 50-60 pieces.  I played with these so much that the cardboard tube was badly frayed where the lid goes from taking it off and putting it on so many time.

 

Then I stepped up to this:

105 pieces of pure real estate pleasure.  It totally amazes me now to think how far Legos have come.  Most today are about building something and following a plan.  Back then, it was about being creative and making something that only existed in your mind.

I mainly did modern, flat roof houses because with only 105 pieces, you didn’t want to use half of them to make a sloped roof.

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Then I started to draw floor plans.  It was the 80s.  The dawn of the open floor plan for the masses.  There was still enough 70s left over that things like Conversation Pits, like I have in this house, were as cool as firepits and reclaimed wood are today.  My grandfather got me the drafting kit for something like my 10th or 11th birthday.  I still have the note inside that he wrote me.  I wish it had a date on it, but neither of us realized I might need it nearly 40 years later for something called a blog.

Then I got into neighborhoods.  Thinking about how one street compared to another and such.  Asking myself which house was better, which lot was better, what I liked or disliked about each.  We lived in Frankfort at the time.  I remember thinking our cul de sac was one of the better ones in the neighborhood, but I didn’t like that it sat at the bottom of the hill, and that the house behind us sat slightly higher than ours……but it was still far better than the houses closer to the East-West Connector Road with all the traffic noise.

I’d go to Florida in the summers to see my grandparents.  My entertainment was having them drive me around cool neighborhoods and going to model homes to see new houses.

People often ask me how long I have been in real estate.  I tell them I’ve had my license since 2005, but I’ve been in real estate all my life.