Was at a Forest Lakes Board meeting, the other night, and as often happens, my neighbors were asking me how the local real estate market was?

Sponsored by: Forest Lakes Properties

I always wonder how best to answer that question.

Should I give an honest answer, a truthful answer, or a friendly answer?

I mean, I don't want to add to the 'Gloom and Doom' that is so prevelant, today, what with the state of our economy.  Nor do I wish to be part of a self-fulfilling prophecy.

But I AM worried.

I'm worried about how current economics is causing us and our leaders, to react when it comes to planning and development.  Whenever we see tough economic times we also tend to see pressures on government to relax rules, regulations, and standard practices in favor of developers.

Heck, just this past week people started calling for renewed oil drilling in the Gulf Coast.  Republicans were calling for suspension of EPA Clean Air laws in order to make it cheaper for refineries and oil producers to generate their products.

Around Charlottesville, we see our Supervisers relaxing standard development proceedures and previously agreed proffers in order, they say, to help builders build and thereby jump start our economy with more jobs and business. One of the Supervisors was quoted as saying "...I don't see why we need a plan, developers will do what's right..." !!

Unfortunately, that's not how it works.

Here, in Central Virginia, we have about a 40% commercial vacancy rate.  You couple that with increased building of both more commercial space as well as residential units, and then add on to that any of the projected defaults of commercial paper forecast for the next few years...well, you can see how this could affect our home values in Forest Lakes and the rest of the region.

With more units comes more glut of inventory (currently have more than 16 months of inventory.  And there is over 1 million sq ft of commercial space reportedly available, or being built--that the county has said would take 20 YEARS to absorb !!).

And, as more people (supposedly) buy these residential units, there is more demand on existing infrastructure.

School student population grows, increasing ratio of students per teacher.  Sometimes the growth is greater than projected and communities are forced to add out-buildings as 'temporary' classrooms.  Sometimes they are faced with a greater burden of having to build a new school.  A cost that is always borne by the tax-payer.

The ability to commute gets stifled as more people means more traffic. Roadways require more maintenance, quicker.  And VDOT (Virginia Dept of Transportation) is already strapped for funds.

There is more call for emergency services.

And as our development standards lessen, developers build with less and less regard to asthetic beauty, and the uglyfication of our community continues in earnest.

This in turn means that perspective homeowners start to steer away from previously desirable Forest Lakes, and as a result of fewer buyers, prices have to drop.

You can already see this in action just north of Charlottesville in the poorer community of Ruckersville where they embraced business to such a degree that development has racked the land. However, many in that community would tell you that they are pleased that Wal-Mart and Lowes came to town.  They will tell you they "planned" development so that a large percentage of it occurs along the much traveled Rte 29 corridor. Unfortunately, this corridor is hideously ugly, with buildings smattered willy-nilly with little attention to aesthetics. The population is less, in Ruckersville, and they welcomed business as a means to lower the tax burden on individuals. The result: free reign for business, ugly area.

But enough of my pontificating!  Let's look at the Forest Lakes Housing Market.

There are currently 10 single family detached homes for sale.
The Average Days on Market (DOM) is: 128
Prices range from $249,900 to $620,000
Price per square foot is: $155

There are 10 single family detached homes under contract, (pending sale).
--We do not yet know the actual contract sales price of these comparables--most likely these figures will be lower in sales price, and price per sq ft.
The Average Days on Market (DOM) is: 165
Prices range from $219,900 to $500,000
Price per square foot is: $144

Since November of 2010, 9 single family detached homes have sold, (2 since January 1st of this year).
The Average Days on Market (DOM) was: 125
Prices ranged from $210,000 to $410,000
Price per square foot was: $137

Analysis:

5 of the properties listed as active just came on the market in the past week, or so.  This brings the DOM down, artificially, because stats show that market times increase as the price per sq ft increases.

For appraisal purposes (bank ordered to secure financing--not to be confused with assessment which town bases property tax schedule), sold comps hold the most weight.  In Forest Lakes, since November of last year, 9 properties sold and only 2 of those since the first of this year!

It looks as if sellers are disregarding these comps, though, and pricing higher than the market can bear. The "Spring Market" has got them excited...too bad their dreams will most likely not come to fruition as the realities of our market become all too evident over time.

I'll revisit this post in a year, or so.  I'll want to see if my analysis was right.  I'll do this NOT to say "HAH! I TOLD you so!" but rather to punctuate our very real need to plan development, to anticipate the cost and burden to our infrastructure, and the ever present necessity to fight for our quality of life--especially in the hardest of economic times.

Sponsored by: Forest Lakes Properties and

Fulton W. Gaylord--Associate Broker, ABR, SRES, e-Pro
Registered HUD Broker, Certified REO Specialist
Keller Williams Realty
1885 Seminole Trail, Ste 100
Charlottesville, VA  22901
434-220-2228
fulton@fkw.com