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Kindly_Boysenberry_7 OP t1_iu6l8ic wrote

Reply to comment by blueskieslemontrees in RVA Real Estate AMA - "What The H*ll Is Happening?" Edition by Kindly_Boysenberry_7

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.

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blueskieslemontrees t1_iu6mepm wrote

Knowing you don't have a crystal ball, just going by gut instinct. Do you think come spring, if rates are still higher, buying new constriction will be the best decision price / investment wise

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Kindly_Boysenberry_7 OP t1_iu6o36h wrote

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.

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blueskieslemontrees t1_iu6omgp wrote

Yeah the plan is for our next house to be home for 20+ years barring a major life change

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Kindly_Boysenberry_7 OP t1_iu6raza wrote

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

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