(This is going to be one of those posts that gets me in hot water with a lot of folks but it relates to one of my pet peeves – folks trying to start another housing bubble so I’ll go on and post it…)
It seems like despite what realtors are telling folks lately, the market here is still mostly for fixer uppers and more reasonably priced houses. There’s a lot of inventory popping up but at ridiculous prices that aren’t backed up by sales.
It’s the seller’s call what they want to ask but I think it does more harm than good to have so many listings so far out of line with reality in our neighborhood. I guess if one of the listings can find a sucker they can set a precedent, but as of now I’m not seeing anything to justify asking price for a lot of the current listings.
http://www.zillow.com/homedetails/2813-E-Grace-St-Richmond-VA-23223/12520196_zpid/ Nice house… but not $200/sq ft nice (at least in Church Hill). This one is by the same realtor who had that ridiculous $730k listing recently (which didn’t sell). If the seller is serious about moving it, that price is going to need to come down pretty significantly IMO. Zillow and the city estimate both have in the 400s which feels closer. Maybe low $500s tops.
Then there’s this one: http://www.zillow.com/homedetails/316-N-23rd-St-Richmond-VA-23223/12518873_zpid/ The size is right but how many people are going to pay $400k for a house with a metal sheet over the brick on the side and a kitchen that looks like a generic Short Pump apartment. There’s a much nicer one right across the street for less that looks like it will move quickly. I guess the seller is content to wait that one out even though the other one is clearly nicer?
If I offend any of the sellers of these houses, I’m just trying to give you one potential buyer’s perspective. Your realtor is telling you bullshit. You can keep paying your mortgage for a year until you figure that out or you can get someone who knows the market here and will list your house to actually move.
A few that I do like right now that are worth the big bucks IMO:
Alex, in general I agree with you. I happen to know the 2601 E. Franklin St. property well and yes it should sell at that price or something close to it, maybe a bit less but not much. The one at 2813 E. Grace is known to old timers as Bruce Tyler’s old house but I agree, think it is over priced. You missed one though – I have heard that 11 N. 29th is for sale for around $730, 000 – or did he take it off the market?
In general the prices on this chpn thread for what has sold are in line with reality. (Although the one in the 2600 block of Broad I would have thought would be less, it needs a total renovation, but as I know the former owner, I’m glad he got something for it).
Alex the idea that we live in an area that can support the sale of houses at $700,000 seems to be outside of reality. I think I agree with your pet peeve. At the height of the bubble, 2603 East Franklin brought something around $500 or $600, and 11 1/2 North 29th brought (I think) around $645, and that was absolutely the top of the bubble.
Like it or not Alex….there are properties in the SOB area that are selling for close to the asking price. Some of these homes are very large, great renovations and incorporate high end finishes. it’s not unreasonable at all for these sales to be close to $200 per square foot. Church Hill is not a subdivision where an average value can be assumed for most properties. Each home is very unique in size, amenities offered, quality of renovation, and caliber of finish.
Alex, I suspect you may live NOB…and I agree with you, these prices are unheard of for that area. SOB…location, location, location!
@5 – I live OB actually. Give me one example of a house that SOLD for $200 sq/ft in Church Hill recently? I’m quite familiar with how pricing works here.
Even SOB most of the sales are below the $200 sq/ft threshold (though closer to it obviously). A few of the ones i cited above were actually getting into $300 sq/ft (730k for 2200 sq ft) territory.
If you feel these asking prices are accurate, I’d love to make a friendly wager with you.
@3 – 11 N 29th is still up as far as I can tell. I didn’t list that as a.) it was a bit bigger than some of these for same money and b.) it actually did have a unique enough location that I could see it selling for >$500k.
As far as I can tell, despite all the hype – there has been ONE house that SOLD for more than $550k in the last year (NOB or SOB) and that house was 5000 sq/ft (2200 block of E Broad went for $675k). We’ve got about a dozen asking that now.
@8 – so in other words, you couldn’t find anything above $200 sq/ft either? I think the market SOB for a nice renovation is around $150-175 per and your numbers confirm that also ($75-125 NOB or for lesser renovations SOB).
So my question remains – why are folks suddenly asking as much as 2x that right now?
The condo’s probably a *bit* overpriced but maybe 10% above market vs. 100% above like the $730k house. Presumably most buyers will try an offer 10% below asking if they like a place but a lot of the others are so far out of range folks won’t even bother with an offer.
They’re just going to sit there for a year or two clogging up the market. I’m all for higher home prices but those prices need to be SELLING prices. Too many bullshit ASKING prices is going to scare prospective buyers away from even considering Church Hill.
A house is worth exactly what a buyer will pay for it. Zillow doesn’t know the CH area, or its micro-neighborhoods, at all and in my opinion should be used only for gathering data about locations and not estimates.
As #10 Anne pointed out, 2813 E Grace is under contract within about 37 days of listing. A pretty good guess is that the selling price is somewhere between $185 – 195 per square foot. It definitely is not “low $500s tops” as one poster has surmised.
Location, condition and what a buyer will pay dictates selling price – not opinions or Zillow. And the market will force realtors and sellers to set correct pricing.
@12 – you do recognize though that this is a pretty big jump from what recent comps have gone for ($150-175) right? So either there’s a pretty big step change happening or someone is overpaying. Either are concerning signs given recent real estate history. While I’d love it as much as anyone if all our homes start jumping because Church Hill becomes the new Fan, the skeptic in me worries that this is a new bubble forming.
To be fair, I did take another look at the listing and it appears that 2813 does appear to have a bigger than average lot. If that’s the case, it may be that the price per sq ft is a bit misleading because it ignores the land value.
I still will be shocked if the other two I listed earlier get asking price unless we enter another bubble or the $730k house gets anywhere near asking (that one was $300 sq/ft!).
@13 – Yes, it’s a big jump from some of the comps we’ve seen. But, the location, lot and house itself are top-notch. And, you’re right – we don’t need a new bubble.
The Richmond market has recently shown that higher-end properties are in demand (BizSense – within the last two weeks I think). Granted, a lot of those properties were in the Fan, West End or suburbia land. But, people do have money they’ve been sitting on and some are looking to buy higher priced homes.
Even in the worst of the housing crisis, high-end properties were in demand by those that could afford them. And the lower-end properties have been selling pretty well. The middle of the road properties either had to drop down a lot to be sold or they didn’t sell.
In CH it seems that a lot of foreclosures and lower-priced homes have been sold or put on the market. Maybe that’s why price per square foot has been low – most of the homes sold thus far have been of lower value.
So how do the more desirable homes get priced? Obviously, the realtor and seller can throw a number out there and see what happens. And, like you’ve said, a number of those places will probably sit for quite awhile unless they have a major price adjustment. I was trying to point out that the market will dictate what is ultimately a fair price, and that maybe realtors/sellers are testing the price point.
But some of the higher listings as of late may not be as far out of line as we may think because comparable comps are very difficult to come by for some of the more desirable properties and locations (probably not $100 per square foot out of line, however).
IMO, there is demand out there for higher end properties and > $200 might not be out of the question. Let’s hope so, as that will eventually help out the entire CH neighborhood property values.
Good for us if its real and sustainable I guess. I just worry that we’re going to have to foot the bill for another bailout once prices go crazy again. And I’m having a hard time believing that things have turned around so much that a house that sold for 400s in 2008 is worth almost 50% more when the general housing trend has been flat since then.
@14 agreed…In Church Hill over the past few years, there have not been many high end properties on the market (or sold) for good comps. Some of the more recent listings are great quality renovations, in great areas, and have terrific features and amenities. I don’t think $200/sqft is unreasonable for these properties (especially some of the smaller sq footage properties). The law of diminishing returns seems to come into play once larger square footage properties come into play (3500 sqft plus).
@16 – the diminishing returns piece is a combination of a couple of things I think.
First, the land alone in some of the better neighborhoods is worth about $100k for a typical plot. A lot of those larger homes don’t have much more land. If you take the land value out, the price for the structure is more consistent.
Second is customer base. There’s not anywhere near as deep a pool of customers for a $700k house in Richmond. So even if the house is theoretically worth it given the right buyer, how many families are there in Richmond that want a big old house, are ok with crappy schools and have $700k to spend? For that reason, sellers often are best served to come down a bit unless they want to sit on a mortgage for a year or two waiting.
19 comments
RT @chpn: Home sales in the area Jan-Mar 2013 http://t.co/ZHYj8i9W6H
Really glad to see the house on Broad St is finally for sale. Hopefully someone will do it some justice.
(This is going to be one of those posts that gets me in hot water with a lot of folks but it relates to one of my pet peeves – folks trying to start another housing bubble so I’ll go on and post it…)
It seems like despite what realtors are telling folks lately, the market here is still mostly for fixer uppers and more reasonably priced houses. There’s a lot of inventory popping up but at ridiculous prices that aren’t backed up by sales.
It’s the seller’s call what they want to ask but I think it does more harm than good to have so many listings so far out of line with reality in our neighborhood. I guess if one of the listings can find a sucker they can set a precedent, but as of now I’m not seeing anything to justify asking price for a lot of the current listings.
For example, this listing:
http://www.zillow.com/homedetails/2204-E-Grace-St-Richmond-VA-23223/12518902_zpid/
has been on the market for at least a year now at the same price. It’s clearly way too much to ask for a 2BR. It would sell in the high 200s, maybe low 300s is my guess but seller wants Fan prices.
http://www.zillow.com/homedetails/2813-E-Grace-St-Richmond-VA-23223/12520196_zpid/
Nice house… but not $200/sq ft nice (at least in Church Hill). This one is by the same realtor who had that ridiculous $730k listing recently (which didn’t sell). If the seller is serious about moving it, that price is going to need to come down pretty significantly IMO. Zillow and the city estimate both have in the 400s which feels closer. Maybe low $500s tops.
Then there’s this one:
http://www.zillow.com/homedetails/316-N-23rd-St-Richmond-VA-23223/12518873_zpid/
The size is right but how many people are going to pay $400k for a house with a metal sheet over the brick on the side and a kitchen that looks like a generic Short Pump apartment. There’s a much nicer one right across the street for less that looks like it will move quickly. I guess the seller is content to wait that one out even though the other one is clearly nicer?
If I offend any of the sellers of these houses, I’m just trying to give you one potential buyer’s perspective. Your realtor is telling you bullshit. You can keep paying your mortgage for a year until you figure that out or you can get someone who knows the market here and will list your house to actually move.
A few that I do like right now that are worth the big bucks IMO:
http://www.zillow.com/homedetails/2601-E-Franklin-St-Richmond-VA-23223/12519680_zpid/
This house is pimp. Would be surprised if it doesn’t move fast at low 100s per sq/ft.
http://www.zillow.com/homedetails/2600-E-Grace-St-Richmond-VA-23223/2114286367_zpid/
Sweet condo for River Lofts monthly payments. This should also move fairly soon.
http://www.zillow.com/homedetails/3601-E-Broad-St-Richmond-VA-23223/12523068_zpid/
Might be a bit high also but this house is in the right ballpark. My guess is it will move in the mid-400s.
Alex, in general I agree with you. I happen to know the 2601 E. Franklin St. property well and yes it should sell at that price or something close to it, maybe a bit less but not much. The one at 2813 E. Grace is known to old timers as Bruce Tyler’s old house but I agree, think it is over priced. You missed one though – I have heard that 11 N. 29th is for sale for around $730, 000 – or did he take it off the market?
In general the prices on this chpn thread for what has sold are in line with reality. (Although the one in the 2600 block of Broad I would have thought would be less, it needs a total renovation, but as I know the former owner, I’m glad he got something for it).
Alex the idea that we live in an area that can support the sale of houses at $700,000 seems to be outside of reality. I think I agree with your pet peeve. At the height of the bubble, 2603 East Franklin brought something around $500 or $600, and 11 1/2 North 29th brought (I think) around $645, and that was absolutely the top of the bubble.
@Alex- Okay one more time- Alex run for mayor.
Like it or not Alex….there are properties in the SOB area that are selling for close to the asking price. Some of these homes are very large, great renovations and incorporate high end finishes. it’s not unreasonable at all for these sales to be close to $200 per square foot. Church Hill is not a subdivision where an average value can be assumed for most properties. Each home is very unique in size, amenities offered, quality of renovation, and caliber of finish.
Alex, I suspect you may live NOB…and I agree with you, these prices are unheard of for that area. SOB…location, location, location!
@5 – I live OB actually. Give me one example of a house that SOLD for $200 sq/ft in Church Hill recently? I’m quite familiar with how pricing works here.
Even SOB most of the sales are below the $200 sq/ft threshold (though closer to it obviously). A few of the ones i cited above were actually getting into $300 sq/ft (730k for 2200 sq ft) territory.
If you feel these asking prices are accurate, I’d love to make a friendly wager with you.
@3 – 11 N 29th is still up as far as I can tell. I didn’t list that as a.) it was a bit bigger than some of these for same money and b.) it actually did have a unique enough location that I could see it selling for >$500k.
As far as I can tell, despite all the hype – there has been ONE house that SOLD for more than $550k in the last year (NOB or SOB) and that house was 5000 sq/ft (2200 block of E Broad went for $675k). We’ve got about a dozen asking that now.
2516 E Grace – $515K – $155/sqft …. 2600 E Franklin St. Under contract for $509K -$174/sqft. …. 2910 E Broad St $287K ….$157/sqft 100s per sq/ft.
http://www.zillow.com/homedetails/2600-E-Grace-St-Richmond-VA-23223/2114286367_zpid/
Sweet condo for River Lofts monthly payments. This should also move fairly soon. Never happen at $297K…this is a $250 condo.
@8 – so in other words, you couldn’t find anything above $200 sq/ft either? I think the market SOB for a nice renovation is around $150-175 per and your numbers confirm that also ($75-125 NOB or for lesser renovations SOB).
So my question remains – why are folks suddenly asking as much as 2x that right now?
The condo’s probably a *bit* overpriced but maybe 10% above market vs. 100% above like the $730k house. Presumably most buyers will try an offer 10% below asking if they like a place but a lot of the others are so far out of range folks won’t even bother with an offer.
They’re just going to sit there for a year or two clogging up the market. I’m all for higher home prices but those prices need to be SELLING prices. Too many bullshit ASKING prices is going to scare prospective buyers away from even considering Church Hill.
FYI, 2813 East Grace is now under contract.
Let’s see if they can find an appraiser willing to sign off on that one. Any idea what the offer is?
A house is worth exactly what a buyer will pay for it. Zillow doesn’t know the CH area, or its micro-neighborhoods, at all and in my opinion should be used only for gathering data about locations and not estimates.
As #10 Anne pointed out, 2813 E Grace is under contract within about 37 days of listing. A pretty good guess is that the selling price is somewhere between $185 – 195 per square foot. It definitely is not “low $500s tops” as one poster has surmised.
Location, condition and what a buyer will pay dictates selling price – not opinions or Zillow. And the market will force realtors and sellers to set correct pricing.
@12 – you do recognize though that this is a pretty big jump from what recent comps have gone for ($150-175) right? So either there’s a pretty big step change happening or someone is overpaying. Either are concerning signs given recent real estate history. While I’d love it as much as anyone if all our homes start jumping because Church Hill becomes the new Fan, the skeptic in me worries that this is a new bubble forming.
To be fair, I did take another look at the listing and it appears that 2813 does appear to have a bigger than average lot. If that’s the case, it may be that the price per sq ft is a bit misleading because it ignores the land value.
I still will be shocked if the other two I listed earlier get asking price unless we enter another bubble or the $730k house gets anywhere near asking (that one was $300 sq/ft!).
@13 – Yes, it’s a big jump from some of the comps we’ve seen. But, the location, lot and house itself are top-notch. And, you’re right – we don’t need a new bubble.
The Richmond market has recently shown that higher-end properties are in demand (BizSense – within the last two weeks I think). Granted, a lot of those properties were in the Fan, West End or suburbia land. But, people do have money they’ve been sitting on and some are looking to buy higher priced homes.
Even in the worst of the housing crisis, high-end properties were in demand by those that could afford them. And the lower-end properties have been selling pretty well. The middle of the road properties either had to drop down a lot to be sold or they didn’t sell.
In CH it seems that a lot of foreclosures and lower-priced homes have been sold or put on the market. Maybe that’s why price per square foot has been low – most of the homes sold thus far have been of lower value.
So how do the more desirable homes get priced? Obviously, the realtor and seller can throw a number out there and see what happens. And, like you’ve said, a number of those places will probably sit for quite awhile unless they have a major price adjustment. I was trying to point out that the market will dictate what is ultimately a fair price, and that maybe realtors/sellers are testing the price point.
But some of the higher listings as of late may not be as far out of line as we may think because comparable comps are very difficult to come by for some of the more desirable properties and locations (probably not $100 per square foot out of line, however).
IMO, there is demand out there for higher end properties and > $200 might not be out of the question. Let’s hope so, as that will eventually help out the entire CH neighborhood property values.
Good for us if its real and sustainable I guess. I just worry that we’re going to have to foot the bill for another bailout once prices go crazy again. And I’m having a hard time believing that things have turned around so much that a house that sold for 400s in 2008 is worth almost 50% more when the general housing trend has been flat since then.
@14 agreed…In Church Hill over the past few years, there have not been many high end properties on the market (or sold) for good comps. Some of the more recent listings are great quality renovations, in great areas, and have terrific features and amenities. I don’t think $200/sqft is unreasonable for these properties (especially some of the smaller sq footage properties). The law of diminishing returns seems to come into play once larger square footage properties come into play (3500 sqft plus).
@16 – the diminishing returns piece is a combination of a couple of things I think.
First, the land alone in some of the better neighborhoods is worth about $100k for a typical plot. A lot of those larger homes don’t have much more land. If you take the land value out, the price for the structure is more consistent.
Second is customer base. There’s not anywhere near as deep a pool of customers for a $700k house in Richmond. So even if the house is theoretically worth it given the right buyer, how many families are there in Richmond that want a big old house, are ok with crappy schools and have $700k to spend? For that reason, sellers often are best served to come down a bit unless they want to sit on a mortgage for a year or two waiting.
2813 E. Grace closed at $579,000, which makes it the highest price for a single family home sold in Church Hill since 2209 East Broad last summer.