Can't speak for anyone else, but I do not cold call, text or door knock. I might send a mailing or a note to someone who has been in their house for X+ years in a particular neighborhood, but hopefully that's not terribly offensive.

I am not going to rag on my colleagues that do cold calling and door knocking, but it's not something I'm good at or comfortable doing, and I wouldn't want someone to do it to me. So I understand your comment. Fair.

Ah! My area of expertise! I do lots of Fan stuff, live in the Fan and have sold bunch of multifamily both for and to my investor clients.

There are lots of Fan duplex comps. Why do you say there were no comps for your duplex? And unless you have some very specific reason you need to sell off market - which is possible, don't get me wrong - you will not maximize your return unless you put the property on the open market.

Dream crusher! :)

No, seriously, I'm glad to hear the information from a lender. I 100% agree, unless you can do this all with cash, you are better off buying a cabin/small house in [pick your location]. If you don't have to be in RVA and are willing to consider other locations, I'd suggest (personally) Fluvanna, Nelson, Bath Counties. Staunton is super cool IMO, as is Lynchburg.

You can't time the real estate market any more than you can time the stock market. Sorry to hear about the 2006 house purchase, but you probably got into new for around 3% for 30 years, which is amazing. So hopefully it all balanced out.

If you want to DM me your budget and your list of wants and needs, I'm happy to send you some thoughts. Welcome to RVA! Hope you are liking it.

ETA: Spelling

Okay just trying to make sure I understand. You paid $X (unknown) for house, You put $10,000 down, your original loan was $190,000. You've probably paid down $40,000 on that $190,000 loan. You're saying the house is now worth $X, which gives you $190,000 in equity.

Your question is: What should you do?

IF YOU ARE DISCIPLINED: I'd consider getting a home equity line of credit ("HELOC") against the equity in your home. Basically that is a line of credit - like a credit card.

BUT......

I personally would only do that if you are disciplined, won't use it, it's only there for some unforseen emergency. Because you are effectively using the equity in your home as a potential credit card. And the interest rate will be prime + points, so it's like a credit card interest rate. This is exactly what got people in huge trouble in the 2007 recession.

But in an uncertain financial environment it can be a positive to have access to cash if you absolutely need it

Talk to your financial advisor, if you have one. And if you will be tempted to use a HELOC for wants, rather than needs - new car, vacation, etc. - don't even open the door.

Because that's what 30 year fixed is at RN.

I don't think I understand your question. What did you pay for your house? How much did you put down? And lastly, how much do you owe on the loan?

Good to know. I need to take you to lunch next week so you can educate me about lending options. I swear I've only done 30 year fixed conventional and some FHA, maybe a VA loan or two over the last 14 years!

Yes I'm in what I call my "carry me out in a box" house. 😆 I do not plan on moving.

Okay I know NOTHING about Chesterfield County. That's my partner's expertise, so can't help you there. Same with Hanover County, I just don't know it well enough to be value added.

Lots depends on budget, need for decent school district, etc. If you are looking at $300,000+ but need a good elementary school, I like Westhampton Annex. If you don't need a decent elementary school, I really like Bryan Park and the area around Westwood Racquet Club. But I also like older homes, if you prefer new construction you'd probably look other places.

No. Here's my reasoning:

If you are buying new construction in a still-to-be-built-out project, the new units will always be more valuable than your unit. Here's what I mean. Say I bought a unit at the Libbie Mill townhouse project in the first phase of the project. Say the total project has a 2-4 year build out. What happens if you want to move in Year 3? Isn't someone going to buy a brand new unit, rather than your unit?

I guess it's possible the entire project could increase in value, such that the new units have increased so much in price over and above what you paid that even at a discount to the new unit price you'd be making more than you paid. But the other issue is timing. How are you going to sell your (used) unit unless it's cheaper than the new units? And how much cheaper does it have to be to be "worth it" to not buy new?

Maybe I am not thinking of this correctly, and I freely admit I have not sold a lot of new construction. But I did represent developers who did a number of condominium conversions in 2006-2010, and we definitely experienced that. If there was a "new" unit available, and an existing owner wanted to sell, they needed to provide a pretty significant discount relative to the new unit.

But for people that want new construction that's a personal preference and it might be worth it for those reasons. And if you plan to be there 5+ years, beyond the build out of the whole project, maybe it doesn't matter.

Watching real estate for fun is actually one of the reasons I got into the business. :)

Actually I feel like I am seeing a LOT of price drops. Some of that may be the sellers are in the denial stage of grief, and are forcing their agents to list at the now-aggressive-price that might have flown in May 2022, but ain't flying in October 2022.

But I think new construction projects are probably a good indicator, since they are building a whole bunch of very similar product. The Outlook at Brewers Row (I think that's the name, I can't be bothered to look it up, sorry) has had a number of price reductions. I am also getting video messages from the sales office people - "send your clients this weekend! We'll do everything!" AND some builders are even offering bonuses. So I think the market is definitely softening, especially for something like that, which is a commodity product.

But if you are looking for a $600,000 single family house in Westham, and something completely renovated came on the market, I suspect there would be multiple offers waiving contingencies.

So the most desirable locations in move-in ready condition are still commanding tip top dollar. And that's a reflection of the fact that even though the market has slowed down a bit, we still have an inventory shortage.

I believe at least FHA loans now have that assumability built in. Not sure about a regular conventional. But I did forget you can only assume the balance, so you'd need to be able to bring a chunk of change to closing.

Ah, yes, I have a feeling I will be doing lots of education with lenders in the not-distant future, to re-learn all the stuff about ARMs, and assumptions, etc. It's been nothing but 30 year fixed rate deals since 2008.

There are some folks on here that are much better sources of information for the construction cost stuff than I. For example u/Charlesinrichmond can probably tell you what current costs of construction are for something that is X square feet.

But it just so happens that I am obsessed with tiny houses, so I will share what I know. Of course everything depends on materials, and right now between Covid supply chain mess and the number of people who decided "Hey, I'm stuck at my house for the next 12 months, why don't I do that ____ project I've always wanted to do", construction materials are still through the roof. Like 3x and 4x what they were. I'm personally hoping that is calming down. Charles, is that wishful thinking?

Of course if you do something with a container, or do something like a 3D printed house, maybe the costs are way below this. But from what I was looking into a 750/SF "tiny" house could be built for somewhere between $125,000-$150,000. That's with a bathroom and a kitchen, not on a trailer, fixed in place. I am not sure what it would cost you to buy a lot - I'd say certain parts of Church Hill and Northside you can buy a lot for $20,000.

Does that seem about in line with what you've guesstimated?

Yes.

OK. I'm not trying to be an *sshole, I promise. And if you are one of the people who were waiting to buy, and missed the 3% rates, it can't feel good to hear me say that ship has sailed, but....that ship has sailed.

3% rates were INSANE and historically low, and likely never to be seen again. It was a result of the Greatest Depression since the 1929 crash. So it's a once-in-a-100-year type deal. The entire housing market in the United States crashed, because people who had absolutely no business borrowing to buy a house were borrowing on crazy adjustable rate mortgages, acting like the appreciation wave was going to go on forever, and using their houses as piggy banks to pay for fancy cars, vacations, whatever. Then the ARMS adjusted and all of a sudden borrowers were paying $1,000s more a month on their mortgage payment. Then the mortgage industry collapsed, people's homes lost 25%+ of their value, people were all of a sudden underwater on their mortgages, and the foreclosure wave happened.

But everyone needs to understand that was a mortgage lending-driven crash. It was the FINANCING that was completely screwed up. And yes, developers were borrowing money to build more housing, and that also came to a screeching halt when the mortgage markets fell apart.

The economy was so screwed up the Fed lowered the federal funds rate to 0%. And it stayed there until this year. Which allowed for major economic growth, and a resurgence in the housing market, and then the weird Covid-accelerated and manipulated real estate market and now.....the Fed is trying to put the brakes on inflation. And the only tool they have is raising interest rates.

So the crazy low interest rates = result of a 100 year event, 2007 market collapse.

And I understand that if you are 30 years old right now and looking to buy your first house, the 2007 collapse happened when you were 15, and you have only been an adult in the world of 3% interest rates. But that's not normal. It is in fact completely abnormal. 6% is actually historically pretty low. My parents bought their first house when interest rates were 12%. Of course, their first house cost $12,000. But that's a discussion for another day.

If we get to mid-5% rates anytime in the near future, I'd jump on that. Now there are going to be options for adjustable rate mortgages ("ARMs") that offer rates somewhere in the 5s and they aren't "evil," they are a tool, so long as you understand what they mean and how they work. Another option may be an assumption, which allows you to assume the seller's mortgage and whatever their interest rate is. I need to educate myself on how assumptions will work moving forward. But I'd certainly raise it with my lender.

They may be doing that on purpose, because they may want to empty out the building to renovate the units, to then put them back on the market at a much higher rate. Happens a lot when apartment buildings are sold.

I think the inventory right now is sparse for all the reasons you named: market shift + normal seasonality + higher than normal sales activity since really June 2020.

We should see the normal uptick in listings in the Spring. Even if it's not as much as it's been in the past in a "normal" Spring, I just think we will have more to sell in the normally highest volume sales season. I guess if there is some insane world event, that could change. But I find it hard to imagine what that could be, absent something truly horrible that arises out of the Ukrainian war.

Keep in mind, while you will have more selection in the Spring, you will also have more competition in the Spring. More buyers will be out looking to buy, so more inventory doesn't necessarily translate into better negotiating power. Winter is typically when buyers have the most leverage over sellers, because generally buyers selling in the winter market really have to sell for some reason - death in the family, divorce, job relocation.

Ha! The funny thing is in my previous life I was a Big Firm Lawyer. So I say "my lawyer answer" with more than a little of my tongue planted firmly in my cheek.

Awww......thanks! I really appreciate that. Hopefully it's helpful to someone. I understand the real estate market and the entire home buying process is more than a little opaque. There are still way too many misconceptions about buying real estate.

I wouldn't say the waive inspection/sells on Day 1/no appraisal stuff has completely gone away. In the last few weeks I've had clients compete on an $850,000 City listing, they waived appraisal - although not inspection - and offered a not-insignificant-amount over list, and did not get it. The seller started showings on Friday, evaluated offers on Saturday, and made a decision by Saturday night. There were at least several other offers and the agent told me someone was trying to fly in from California to see it in time to write. So houses that are completely "done," in premiere locations are still commanding multiple offers with waiving all contingencies.

The good news for buyers: If you are willing to buy something that's not perfect, might need a bit of TLC, the buyer definitely has more bargaining power. But it's not 100% a buyers market by any means. The average Days on Market ("DOM") in the Central Virginia MLS has gone from 6 DOM in July 2022 to 8 DOM in September 2022.

For rent to go down you'd need to decrease demand for rentals OR increase supply of rental units.

On the supply side, they keep building more apartments. I mean, just Scott's Addition and Manchester must have added 1,000s of units over the last 2-3 years. And I keep saying "There is NO WAY they are going to get $____ for a 1BR unit!" and/or "There is NO WAY we still need all of these apartments in RVA!" And guess what? I keep being wrong. People way smarter than me build more units, and they fill right on up.

NOTE: As an aside, if there is anyone out there who has counted up the number of units added to RVA's apartment inventory since 2018, or knows of a source where I could find those numbers, please share!

On the demand side, more and more people keep moving to RVA. The influx from Northern Virginia/DC ALONE is azy-cray. And many of the people moving in are coming from high cost of living markets - think NoVa, DC, NYC, the West Coast - and they may be making their high cost-of-living salary while working remotely here in RVA. So our rental rates look cheap to them. So unfortunately, for those of us from here, or for those of us who have been here a while, especially if you are making a normal Richmond wage, and not a NYC remote worker wage, these rental rate increases are putting rents in the core of the City out of reach. I mean, I don't understand why any one person would pay $2,000/month to rent an apartment. That's just crazy to me. But the days of $1,200/month 2BR apartments in the Fan is I think, sadly, over.

So it's not that rents CAN'T go down. It's just that we need to have an oversupply of units and/or a whole bunch of people moving out of Richmond.

I thought it was 30% of gross, but certainly 30% of net would be more conservative. It's really only a rule of thumb, so you have a rough way to measure. At the end of the day, what are you comfortable with?

Yes, TONS going on in Oak Grove too. On the grocery store thing, another real estate saying, albeit from the commercial world, is "retail follows roof tops." I have to think with all the new apartment units going in, as well as the single family houses being rehabbed or built, there will be a grocery store in Manchester soon. I mean, how many units have come on line since 2020, and how many more are in the planning and development stage?

Grow the most in terms of added housing units?

North of the River: I think all of "Greater Scotts Addition" which according to the City planners is now everything east of Arthur Ashe Boulevard, north of Broad, all the way to at least Lombardy, maybe even Harrison, including the Diamond District, the Sauers' parcels, and everything going up around Hardywood Brewery on the Hermitage corridor all the way over to Brook Road (Northside).

South of the River: Manchester/Blackwell. Every time I go over there I am amazed, it feels like someone has just plopped down another 10+ story tower. Unfortunately most of what is going up in Manchester/Blackwell seems to be rental, it doesn't seem like there are many for sale units. I'd really like to see more condos/townhouses/houses, not just rental. [NOTE: I could be wrong on that, the amount of "for sale" stuff, I am much more immersed in the north of the river neighborhoods because that's where I grew up and currently live].

But these are not the most undervalued neighborhoods IMO if you are looking to buy, if that's what you are asking. For that I'd pick Randolph and Maymont (North of the River) and Blackwell and Woodstock (South of the River). I also really like Hammond Place and Rosedale in Northside.