Tim Merrick’s Fall 2011 Newsletter
Fall is upon us. Chilly evenings and cool bright clear days! Best time of the year! The leaves are just starting to begin to turn from the top down. The next six weeks will be the most spectacular and beautiful of the year and very active with events.
Come visit and bring your friends and family. Since my summer newsletter, we have completed the “Pooch Park” on the old Summit House site above the mountain office. We have put in a Bocce court, Shuffle Board, Corn Hole Game Boards, picnic tables, umbrellas, decks, rock gardens, a propane grill and a gazebo. Our colleague, Dick Carroll and his contractors, did a wonderful job.
I encourage you to bring your kids, dogs, and friends, to enjoy this beautiful new park. It has stunning views and has been host to picnics with bands and artists and even our first wedding. Kim Smith’s son got married last month in the thick clouds. It was unique and beautiful. WREC has received compliments on the addition of the new park such as the following.
“WREC is an outstanding corporate leader for the effort on the Pooch Park. You don’t see that very often.”
Many great activities are planned on the mountain in the coming weeks: Next weekend is September 24, 2011 Oktoberfest (if you love great imported and local brewed beer) Fall Foliage Festivals and Golf Championships fill out many of the other fall activities.
One of the big exciting events in the near future is the Tough Mudder. It will be one of the biggest attractions ever to occur at Wintergreen. It will be held on Oct. 21 and 22, 2011. Imagine the biggest ski weekend you have experienced, then double the number of people. Thousands of people will be on the mountain for this race from all over the world. But, they will be bused from parking areas in the valley. You will understand the attraction when you see the web site. There is a good map of the course on the web. Check out the web site, well worth it.
Now to what is happening in real estate world: the best place to start this fall is with the Fed: If one interprets the latest Fed’s statements regarding economic conditions, they mentioned the markets “warrant exceptionally low levels for the fed funds rate at least through mid-2013.” Thankfully, the low fund funds rates will likely help keep mortgage rates low. We may even see rates drop lower. Right now 30 year fixed rate money with zero points is about 4% and we may even see it drop to 3.5%. Regardless, these are now the lowest rates we have seen in this country in 60 years. It has helped sales, no doubt, but it has also done little to generate the expected urgency to purchase in either the primary or secondary markets because consumers interpret this as meaning the weak economic conditions could lead to even lower home and condo prices. There are properties at Wintergreen that are overpriced, given the slow market, but there are also houses, condos and lots priced correctly and they are good bargains. The well-priced properties are selling. Due to the low interest rates, it is one of the best times to buy or refinance a property in our history and the perfect time to recommend to friends to purchase at Wintergreen or in Stoney Creek or the surrounding areas of Charlottesville and the Shenandoah Valley. Your referral will be a big favor to them and of course, to me.
Sales in general seem to be getting better, we have 57 sales and listings closed for over $20,000,000 YTD and a good number of transactions pending, so I am encouraged that properties are selling going in to the fall and early ski season. There are about the same number of houses and condos on the market as there were in my last newsletter. As of this date, about 105 condos and townhomes and 88 homes are for sale on the mountain, 45 homes and townhouses in Stoney Creek and about 55 lots on the mountain with 68 in Stoney Creek. All in all, it is not a bad ratio of re-sale properties to standing inventory.
Regardless of the low interest rates, there is also concern that inflation is just around the corner as I have mentioned in the past. Interest rates have to go up. Last week there was an early indicator. The Producer Price Index (which measures inflation at the wholesale level) remained unchanged in August, but the year-over-year Core Consumer Price Index (CPI) jumped up to hit the upper-end of the Fed’s threshold of 2%. This is significant because ifinflation rises, investors in Bonds will demand a higher yield to offset the lost buying power inflation imposes on a fixed payment. And as home loan interest rates are tied to Mortgage Bonds, this would mean home loan rates will move higher.Once inflation starts to emerge, it can manifest rather quickly so it bears watching. Future inflation readings such as the CPI (about 3.8%), unemployment (9% plus) will be closely watched to see if a higher trend is emerging, and as more money flows into the system it will also fuel inflation. If inflation heats up, the Fed will likely back off their “low rates until mid-2013” mandate. Inflation really does change everything. The bottom line is that home loan rates remain near historic lows, now is the time to purchase or refinance a home. If I can answer any questions at all for you or your clients, call or email me anytime.
The other obstacles I see in our market, in addition to the general market uncertainty, is overpricing. Overpricing a home can have many ramifications for a seller. It limits the number of potential buyers who can afford the home, it reduces showings and it creates an impression in the marketplace that the sellers aren’t really serious about selling their home. Folks who overprice their home often get caught in the trap of price reduction after price reduction trying to catch a falling market. Many sellers have the mistaken idea that they can hold out for an inflated price and eventually the market will come to them. When selling a place its value is determined by one thing and one thing only – what a qualified buyer is willing to pay for it. The secret to pricing a home to sellis not what you think the home is worth, but what a reasonable buyer will think your home is worth. It will ultimately determine if the home or condo will sell. Every buyer knows that the seller has no obligation to sell their home at any price and to purchase the home the buyer will have to make them an offer they won’t refuse. Buyers are under no obligation to buy, and no amount of marketing, open houses, website presences, or advertising will motivate a buyer to purchase an overpriced home, because they can buy one of other homes or condos for sale for less. One of the most important considerations in pricing a home at Wintergreen or anywhere else is doing an accurate Comparative Market Analysis. It is a report that compares a “subject home” with other homes in a specific area. This analysis is then used to provide an anticipated sales price or price range for the subject property. The report provides home buyers and home sellers with a clear understanding of the market data that affects their opinion of value. We do these CMA’s because the information it provides is crucial to getting a property sold in a reasonable amount of time. Many homeowners attempt to put the responsibility of getting both top dollar and fast sale on the back of the real estate agent and the result can be summed up in one word – frustration. Real estate agents don’t do miracles. A real estate agent’s job is to provide marketing, expert advice, and negotiating services, and they don’t make the final decisions on pricing. The seller does, and ultimately the seller’s asking price will in large part determine how slowly or quickly the home will sell. The agent only advises the owner where the house or condo should be priced given the market. Successful sellers take ownership of their pricing decisions by making a clear decision about which is more important to them, selling quickly or selling for top dollar. Successful sellers have learned that to price their home accurately means they need to think like a buyer. Most buyers would probably start online by viewing listings at websites like www.wintergreenrealestate.com or www.caar.com (local MLS) www.realtor.com www.tulia.com www.yahoo.com/realestate or www.zillow.com to get a general feel for local home prices. Feeling good about their findings, they call us and might then venture out to begin viewing homes in person. The internet has greatly informed buyers and they become so knowledgeable about the market that toward the end they are able to guess, with reasonable accuracy, each homes listing price before we tell them.
A final note: A young friend from Nelson County, and a very recent graduate of The University of Virginia, Jonathan Goff, wants to start his own business by offering a unique new service for owners .This newsletter is my small way of helping him. Jonathan is a great kid, dependable, and wants to create his own opportunities. “Le Concierge” Jonathan Goff 434-962-4644 and his email: email@example.com and address … 454 Shiloh Loop, Faber, Va. 22938. Some of the services provided: grocery and dry cleaning delivery….house-sitting and pet-sitting….property management….garbage and wine/ beer, etc. pick-up….misc. residential services, in short, whatever you want him to do.. Good kid, and will treat your home like his Momma’s.
Contributed by Tim Merrick