I think it is an interesting concept that warrants discussion.

I am not smart enough to analyze the macroeconomic effects on the entire economy and whether bailing out more entities, institutions or debt-laden consumers with tax payer money is a good or bad idea. I will leave that to the folks who do these types of studies for a living. What I am saying, is in the micro, the idea has merit and this is why.

Right now, I would make the argument that there is the largest percentage of people in the US who are ‘incorrectly housed’ than ever before. I am pretty sure that ‘incorrectly housed’ is not an official statistic tracked by some agency (can you imagine the Incorrectly Housed Americans Department or I.H.A.D.) but if it was, it would track those people who are in houses that are either too small, too large, in the wrong location or designed in a way that no longer fits a lifestyle. This demographic of IHAD’s is larger than ever before.

While we have been living through the effects of an economic meltdown during which almost all economic activity ceased, other facets of life didn’t stop changing. Aging has not stopped…families expanding has not….children growing and leaving has not….children moving BACK home has not….moving to another city for a job has not….in other words, life has not stopped.

The inputs that define whether or not a home is efficient for your stage of life do not change because the value of the home has changed but the ability to do anything about it has. Living inefficiently has its own costs on the market that no one speaks about. Heating and cooling extra space and longer commutes are obvious negatives but what about the stresses caused on young couples living in condominiums or townhomes who now have children and a need for green spaces? It is a real issue and I can name countless examples.

The common thread in all cases is that the market is frozen in place and people are stuck. No amount of stimulus can fix it until you fix debt/equity ratio. As a seller, EVEN if you are able to break even on the sale of your home, the mortgage products that exist now to buy the next one are much more restrictive. Selling your house is a battle, but finding the down payment to go to the next home is even more challenging, and consequently, people stay in place.

Unlocking the ability to allow all of us match our houses to our situation will balance the market better than 3.75% interest rates. Interest rates, while low, do not erase debt or create down payments. Until those two factors are back in balance, we will not see balance in our market.

What do you think?

For more information, see Richmond VA Condos.

Government: “We Forgive You?” is a post from: Richmond VA Condos

AAAAAAAAAHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!

Each and every day, I get asked about dues when showing condominiums. While some of the questions are quite astute and on point, many indicate a complete lack of understanding of what ‘dues’ really are. It is frustrating in that it is not a question that can be answered in a sentence or two. It is also a question that needs support from both agents in a transaction to help a buyer unfamiliar with the condominium ownership structure become comfortable with the concept of ‘dues.’

The emergence and acceptance of the condominium as a living option is a relatively new development in Richmond. The condominium market, as we now know it, did not really exist as little as 7 years ago in Downtown Richmond. The rapid rise and growth of condos in the City created a steep learning curve for both the Realtor community as well as the buyers. Some agents sought the knowledge (or at least engaged in learning the basics) and kudos to them, however, many did not. This lack of knowledge has manifested itself in an inability for many buyer’s agents to adequately explain ‘dues’ on either an actual or conceptual level.

So…..in my never ending quest to defend my beloved condo market, I thought I would take to task “the dues question” and why they are so misunderstood.

I cannot tell you how many times I hear that “single family homes don’t have dues” or some derivative of that statement. If you are a buyer and your agent tells you single family house do not have dues, fire them on the spot. You should not take their advice.

Single family houses have dues….you just aren’t made aware of them in the same way as you are in a condo.

Before we get started, let’s apply some numbers so that we know what we are talking about.

The majority of the condos in Richmond have a dues structure of roughly $2.50 -3.25 per square foot per year of dues expense. In other words, a 1000 SF condo with a parking garage and an elevator will typically generate $200-300 per month in dues or somewhere in the neighborhood of $3000 a year.

Do you get a water or sewer bill at your home? Well, in a condo, water and sewer is typically a part of your dues ($200-300 per year is about right)

Do you pay hazard insurance? In a condo, since the structure is owned collectively, then it must be insured by the association. Therefore, the large majority of your insurance bill is paid for as part of your dues. (about $500-700 per year)

So to truly look at the difference between single family and condos, you first must adjust for the insurance and the utilities.

The second (and most misunderstood component) is the maintenance and reserve budget.

Do you have a roof on your single family home? I’ll bet you do. What does that cost to replace? When will it happen? Are you putting any money away for that replacement? The condo people are.

Do you have exterior walls on your home? What does it cost to keep them painted or cleaned? What does it cost to replace the rotten siding or wood trim? Are you putting money away for this repair? The condo people are.

Each month, some portion of the dues go into an account for future repairs and maintenance items. In lieu of waiting for the repair to be needed and then asking for each person to put up their pro-rata share, the money is available. If the repair is not needed, then the money is not spent. It is sitting in an account, waiting to be used.

Who cuts your grass? Who maintains your pool? Who cleans your cutters? You get the point.

Is putting $2000 a year towards both current AND future repairs that much different than a single family home? Take a look back at your checkbook last year and then answer that question. If the answer surprises you, look back five years and you will understand even more. My bet is that living in a condo is actually cheaper than living in a single family home when the entire cost of ownership it truly examined.

Take this point with you – all improved properties (single family, commercial, apartment, condominiums) have ‘dues,’ the question is whether or not they are paid collectively in advance (as they are in condos) or in a lump sum in arrears (as they are in single family). To say that one property type has dues and one does not is naïve basing your purchase decision based on dues/no dues is not going to lead to the correct outcome.

If you are struggling with ‘the dues question’ then lay it all out on a spreadsheet and review the budget (which by law you have the right to do) and then make your decision. Living in a condo may or may not be the right decision for you, but strive to understand the true differences before blindly dismissing condominiums because they have dues.

What do you think?

For more information, see Richmond VA Condos.

To Dues or Not to Dues, That is the Question is a post from: Richmond VA Condos

You should buy a house or condo.

Now I understand that my position on this is not without bias. I am a Realtor who sells a lot of property in and around both the VCU Campus and the MCV/VCU Health Systems Campus. It benefits me when you buy. It does not really benefit me when you rent. I am now done disclaiming my conflict of interest.

That being said, it does not mean that I am wrong.

I am not going to give you the rent vs. buy calculator argument because we can all tweak the numbers until we can get it to show what we want it to. Depending on inflation and appreciation and tax effects, I can get one of those things to spew out some amazing numbers. Those are interesting tools and they have their place. This is not a debate for the rent vs. buy calculator.

My argument is more macro in nature and relates to the following set of circumstances:

• Prices are down 20-30% depending on your market and asset type
• Interest rates are being held down (somewhat artificially) by the Fed and are still hovering around 5%.
• College tuition and college room and board is going up despite the rest of the economic world moving the other direction. See http://www.collegeboard.com/student/pay/add-it-up/4494.html.

Renting a property for roughly $1.30 per SF per month (which translates to about $1,200-1,400/mo for the typical 2-bedroom apartment in City of Richmond in or around the VCU campus) or buying a property for about $190-210 per square foot yields about the same monthly cash payment at the end of the day.

Which one gives you some upside? It is pretty obvious that buying has the promise of upside.

I know that the counter argument is simply that many are not sure that the pricing declines behind us.

The facts are as follows:

- On January 1 2009 there were over 400 condos for sale in Richmond, VA

- On January 1 2010 there were less than 200 condos for sale in Richmond, VA

- There is no new projects in the pipeline that offer “for sale” product coming on-line in 2010 or 2011 that would skew those numbers

Life, at least financial life is about managing/pricing/understanding risk. Betting large sums of money on risky endeavors with no upside is not smart. Betting medium sums of money with a low cost-of-capital in a market that has balanced itself with no competition coming on line sounds like a pretty decent bet to me.

Don’t let the national media scare you off. While extremism and negativity sells, I have yet to see report on the college-driven housing market on 60 Minutes. As a matter of a fact, the student housing market is one of the healthiest housing sectors in the market (http://www.forbes.com/2010/02/23/real-estate-advisor-personal-finance-college-reit.html?feed=rss_tickers) and owning a home that is underpinned by a rental option to students is a way to remove a great deal of risk from the equation.

I am personally a buyer now. I was not last year.

Buying vs. Renting Near VCU/MCV is a post from: Richmond VA Condos

The article gave me a chance to highlight The Reserve, The Marshall Street Bakery, 212 Condos, and the Emrick Flats.

The entire article is here.

What do you think?

For more information, see Richmond VA Condos.

Richmond Grid Article Focuses on Downtown Richmond Condo Opportunities is a post from: Richmond VA Condos

The 212 Condos got a great mention in Richmond Grid this week.

The article highlights the condo owned by Michael Falcone and showcases the extraordinary job he has done decorating his unit. The pictures alone are worth the visit!

The entire article is here.

What do you think?

For more information, see Richmond Virginia Condos.

212 Condos In The News is a post from: Richmond VA Condos

You can read the entire blog post and see all the cool pictures here.

What do you think…ready for Manchester?

For more information, see Richmond Virginia Condos.

More Buzz about the Manchester Pie Factory is a post from: Richmond VA Condos

The Google Fiber for Communities Project is an experiment to build an ultra-high speed broadband network that will deliver internet speeds more than 100 times faster than what most Americans have access to today. The planned network will offer speeds over one gigabit per second in the fiber-to-the-home connections. Google plans to offer service at a competitive price and an open network.

Exactly how amazing would that be? Answer: Very Amazing. What could you do with gigabit fiber?

Imagine sitting in a rural health clinic, streaming three-dimensional medical imaging over the web, and discussing a unique condition with a specialist in New York. Or downloading a high-definition, full-length feature film in less than five minutes. Or collaborating with classmates around the world while watching live 3D video of a university lecture. Universal, ultra high-speed Internet access will make all this, and more possible.

So, how can you help?

“One of the deciding factors in Google’s decision will be community support and it is imperative that we enlist everyone we can to join our application effort. Residents can join us on our social media sites and show Google that Richmond is the city that will embrace their project and help make it a success,” said Mayor Jones.

You can read more about the potential project here, and make sure you go here to show your support by nominating Richmond, VA.

Do you part…nominate Richmond!

For more information, see Richmond VA Condos.

Richmond Vying for Google Fiber is a post from: Richmond VA Condos

Venture Richmond, a downtown advocacy group, is sponsoring a Downtown Loft Tour of 15 lofts in six neighborhoods two weeks from today — on Saturday, March 27.

“I wouldn’t live anywhere else but downtown,” said Tom McFalls, leasing manager at the River Lofts at Tobacco Row, whose industrial chic apartment will be open for the tour.

The author makes a great point about one of the benefits people thinking about moving downtown get out of the tour:

Lucy B. Meade, Venture Richmond’s director of marketing and development, said 7,700 people live in downtown Richmond and yet it doesn’t appear as if the city has that much residential space.

“The only way to believe it is to see it,” she said.

The owners of the lofts on the open house will be at their homes to talk with visitors. “It’s an opportunity to hear about why people love living downtown,” Meade said.

You can read the entire article here.

We’re co-sponsoring the Tour again this year, and one of our coolest listings, the Manchester Pie Factory, is featured on this year’s tour. It’s a must see condo.

Are you going to join us?

For more information, see Richmond Virginia Condos.

RTD Article on 3rd Annual Loft Tour is a post from: Richmond VA Condos

Housing economists have long held that the housing rebound, when it comes, will be uneven. The markets that benefit first will be the ones with the strongest core dynamics; places where house prices never got out of hand, cities where a diverse and progressive employment base drives job creation, towns that continue to draw population despite the economic recession.

Richmond comes in at #12 out of the top twenty markets in this survey!

Specifically, they say the following about Richmond:

Market Health Indicator: 37.3

2009 Total Building Permits: 3,042

2010 Building Permit Forecast: 3,329

Richmond is another market on the mend. The city of 1.24 million is a state capital and home to several universities. The median price of a home here, $198,000, fell only 5% last year. Now, the region, which boasted a below average unemployment rate of 8.4% at year end, is poised to start adding jobs again. Market Intelligence expects employment to rise 0.3% in 2010. Permit levels are expected to rise by roughly 10%, though they won’t come close to 2008′s level of 4,970.

You can read the entire article here.

What do you think? Are we poised to see a better-than-average real estate market here in Richmond?

For more information, see Richmond VA Condos.

Richmond VA Seen On the Mend is a post from: Richmond VA Condos

We’re co-sponsoring the 2010 Richmond Loft Tour!

The Tour is always a great way to compare and contrast several different types of Lofts in one day…we highly recommend it.

The brochure for this year’s tour can be found here.

2010 Loft Tour To Be Held March 27 from 10am to 5pm is a post from: Richmond VA Condos