We had a chance this week to watch as buyers had their final walk thrus of units in two new condo buildings in the D.C. area. One was in a very popular high rise in the Mount Vernon Square area and the other was in a smaller building in downtown Bethesda. In both instances, the developers had a pre-walk thru a week prior to settlement where the buyers produced a punch list of items in their units that were either not completed or not completed to their satisfaction. In both cases, the buyers were warned to be very careful in compiling this list because only items noted on the list would be corrected by the developer – and in both cases, the buyers brought in a professional home inspector to help prepare the punch list.
That’s where the similarities ended. In the downtown condo, the “punch list” was handled by a representative of the builder/developer who was the gate-keeper for what went on the list. In other words, if the purchaser (or purchaser’s inspector) determined that something was unacceptable, it only went on the list if the developer’s representative agreed. In the Bethesda building, the gatekeeper was a third party who was handling the warranty for the developer. While the D.C. developer’s rep was clearly trying to keep things off his list, the warranty company’s representative in Bethesda was anxious to have all deficiencies noted so that they could be repaired prior to his company taking over responsibility. It’s clear which system worked best for the buyer – and I’d argue (in the long run) for the builder/developer.
I think you can guess the end of the story. It was a nightmare in the D.C. building. The purchaser felt strongly about a flooring deficiency – for which the developer absolutely refused to accept responsibility. It almost ended up with the buyer refusing to go to settlement – which would have undoubtedly...
So if you buy into the idea of
micro-niches, and I’d argue that you’d be silly not to buy in, then where do “emotion” properties fit in? By definition, an “emotion” property is one that has that special something (or those special somethings) that pull in a buyer (or buyers) – usually either an architectural feature, a location detail (i.e., looking out over the Potomac River or the Avenel Golf Course), or an “aura” that’s probably undefineable (another one of those things that you “know it when you see it”). An “emotion” property could exist within a micro-niche…or outside of a micro-niche – and, in either case, does not rely on the micro-niche (or lack of same) for its inherent value.
Now that I’ve got you completely confused (I think I’ve even confused myself!), let’s look at a couple of examples. A recent listing of ours in Chevy Chase, D.C. sat in a desirable subdivision, on a charming street (micro-niche), but it sold fairly quickly in a slowing market in great part (in my humble opinion) to an “emotion” factor. The house boasted a couple of wonderful additions, the most spectacular of which was a third floor loft/studio with a wall of windows. At the couple of open houses that I held, it was fun to watch people wander thru the first floor (which had its own charm), head upstairs -- and 10 minutes later, reappear with smiles on their faces. The 3rd floor brought the “wow” factor, the “emotion” factor…and the quick sale.
Another listing that we had the pleasure of marketing was in an area of Silver Spring that brought many conveniences, but probably didn’t stand out as any particularly desirable micro-niche. The house, however, was a true stand out. Owned...
Gretchen's Real Estate Reflections Series
I’ve been doing this (selling real estate in the Washington, DC area) so long that I remember going thru this seller’s market before. During the last such market, I got a call from the family of an elderly woman. They wanted their mom to sell her home and move into something smaller. I went thru the house with the family and came up with a list of 15 items (painting, patching, adding carpet, refinishing floors, landscaping, etc., etc. etc.) that needed to be done in order to sell the property. Well, the owner refused to move and spent another 5 years in the house.
The next time the family called, she was in a nursing home and the house needed to be sold. Somehow or another, I still had my notes and the list of 15 items from my previous visit (no, I’m usually NOT that organized..it was just a fluke). None of the suggested repairs/improvements had been made…but the market had changed. When I went back to the house, I only saw one of those 15 items that really needed to be done in order to market and sell the house.
Today we’re back to the list of 15 items.
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In a previous blog post, we discussed the issue of micro niches…how you can’t talk about the Washington Metropolitan market, or even the Bethesda market, or even the Downtown Bethesda market. Instead, you have to go almost block-by-block, and consider not only location, but also product….or how about location within a product? For example, I showed a condo in NW Washington D.C. a couple of weeks ago in a building that is somewhat challenged because of high monthly fees. Most of the time, units in this building tend to sit for weeks on end. In this case, however, this particular apartment had one of the most fabulous terraces I’ve ever seen. It wrapped around the entire unit and faced open spaces and greenery…with an unobstructed view of The National Cathedral in the distance. It came as no surprise, that even in this “tough” market, this apartment was under contract in less than three weeks. It was a micro niche within a micro niche within a micro niche…
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For all the downtown Bethesda Townhome lovers, come to my open house tomorrow at 4908 Montgomery Lane. And for you who can't make it, I didn't want to leave you out so I've attached a virtual tour at the bottom of this post.
Quick description: Located in the highly desirable City Homes of Edgemoorthis unique 4 level townhome with 2-car garage offers a wonderful opportunity for in-town living. With a 1st floor office, an open gourmet kitchen with high end appliances, a gas fireplace, a full floor of master bedroom suite, 2 additional bedrooms with ensuite baths, plus a “wonderful, walkable” downtown Bethesda location, it's hard to beat! Offered at $1,299,000
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Even in the greatest exuberance of a seller’s market, there are seasonal changes in real estate transactions. Historically, the time between Thanksgiving and the beginning of the new year is a great time to be a buyer. Why? It just seems as though most people are busy doing other things than house shopping. The downside for buyers, in a seller’s market, is that inventory is usually low and not many people put their homes on the market during this holiday season.
Fast forward to today’s market, where inventory is high and buyers are scarce…and now we have the holiday season. It’s a great time to consider a house purchase. You’ll be most successful if you concentrate on homes that have been on the market for at least six weeks and if the property is vacant, that usually indicates even more chance for a “deal” to be made with a serious seller.
Either way, enjoy the holidays….and there’s still time to enjoy them in a new house!
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Articles from Realtor Magazine, a national publication sent to every Realtor in the country, rarely resonate with me. Because real estate is so local, much of the content is normally not applicable to the Washington DC area real estate market. But I just finished reading a short piece, "The Rise of Micro Markets" and it was one of the first pieces that I've read that has clearly outlined the concept of "markets within markets". Short and concise, it didn't specifically mention the Washington, D.C. market (in fact it spoke mostly about San Jose, California), but its content certainly applies to us.
The Micro-market?
What it says, in a nutshell, is that in a slowing market, a property's location becomes even more important and that you can't generalize about a city...or even about a neighborhood within the city. Instead, "Micro Markets" can be defined in terms of blocks or sometimes in terms of types of housing. Since I do a lot of my business, for instance, in downtown Bethesda townhomes, I have often argued that this product is a "micro niche." You can neither compare this housing to Bethesda as a whole, nor can you compare to townhomes in general. And, in fact, the very limited complexes of downtown Bethesda townhomes are, in my opinion, each a "micro, micro niche."
Simply said, it's all about location....and even locations within locations...and the value of each mini location becomes even more pronounced in a "slower" market.
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