Reston, VA Real Estate The High~Low Game

So let me come clean here and admit that the the title this post isn’t original. In fact I’ve, err, um, well lets just say I’ve borrowed it from another blogger, our own local mystery man (I assume man) blogger, Restonian.

Of course when he writes about the high and the low of Reston real estate he’s full of witticisms that I will not be able to replicate. However I love the idea and would like to offer some insights into the high/low and in between real estate in Reston.

Reston Town Center - Image by Matthew and Tracie via Flickr

We are fortunate to have so much diversity in our real estate market. There are 115 properties in between the high and the low—which is a painfully small number of properties On the low end we have a 2 bedroom 2 bath condo listed at $102,500.00, it’s a short sale over in South Reston. At the other end of the spectrum is single family home with 4 bedrooms, 2.5 baths and 2 fire places also in South Reston listed at $1,399,000.

The inventory in Reston, (yes, inventory is what we real estate agents call your home once we’ve put it on the market), has been low for the past 18 months. While this lack of inventory usually creates pent up demand, the market is still very price sensitive, leaving properties listed above market value languishing unsold, while appropriately priced properties sell fairly quickly. The average price of these 115 properties is $461,000.00. The housing types include 26 single family home, 47 townhouses and 42 condominiums.

What does this mean for you?

If you’re a buyer it may seem there’s not a lot to choose from, but doing a little home work could make all the difference. Consider focusing on properties that have been on the market for more than 90 days. Have your agent pull comparable listings and make your offer based on the data. Most important: when you find the home you want, don’t wait! If it’s priced right it won’t last. If you feel it’s priced too high still– make your best offer. There’s nothing worse than losing “the one” because of inactivity.

If you are a seller low inventory suggests that the market is in your favor and it is… At least, it could be… If you’ve cleared away the clutter (including your husband’s college beer can collection), put fresh neutral paint on the walls and priced it within spitting distance of the comparable properties in your area. Then you are in good shape and can expect a sale within a fairly short period of time. However, if you add an extra 10 or 15 thousand to the number your agent recommends so that you’ll have some “room to negotiate” it’s going to be a long winter.

Bottom line — when inventory is tight, and the market competitive, all sides are best served by coming well prepared to the high/low real estate game.

I have a friend used to say that there was a Seinfeld story line to cover

A story line for situation in life.

every situation in life. I thought of that recently when talking to a Seller about their feeling that they had “lost money” in their home which they purchased 15 years ago and which still had its original mortgage.

In my Seller’s mind the loss of value from 2006 to 2010, an amount of approximately 20% in his market felt like money out of his pocket. He was really disappointed that they had delayed making the decision to move from the big single family home into the condo that they hoped would better suit their empty nester lifestyle.

It’s always hard to get people to grasp that the housing market is just like any market—very, very, immediate. When you go to sell your Oracle® stock its worth whatever it’s selling for THAT DAY, it doesn’t matter what it sold for in the past or what it might sell for in the future, the only thing that matters is today. Same thing with the family house, except the price is influenced up or down by condition and the horrible irony here is that poor condition of property creates more downward pressure on home values than good condition creates an upward trend in home value.

Good property condition makes your home more marketable and makes it sell faster but you do not get a dollar for dollar return for the upgrades that you do prior to putting your home on the market.

So, what’s the take away for my Seller?

Sell high, buy high.

Had he sold in the fever pitched market of a few years ago he would have also been buying in that same market. Then his situation would have been all together different and he may very well have been sitting on a property with an upside down mortgage. As it is he will be selling his home after
seeing property values nearly triple and then moderate a bit, and he will being buying in a market that has seen some serious price correction. While my Seller may feel like he is selling low…the truth is that he is buying low; he is going to make a lot on money on the sale of his home and he’s going to buy a great condo for way, way less than he would have if he had made his purchase when he first contemplated a change.

So, which Seinfeld episode fits this situation? The one where a series of ridiculous events cause Jerry to believe that he’s always going to stay even. Sell low, maybe but you’ll also be buying low, but really it’s not low, it’s the current market.