NRV Real Estate and Covid Pt. 2: Migration from City Centers

In this, the second of a 2 part series, I want to share some research we’ve done on what we can expect in the future for the NRV real estate market based on experts’ predictions about how Covid is effecting where people choose to work and live. Click here to read Pt. 1 about the impact Covid has had on the university system specifically connected to Virginia Tech and Radford.

As I wrote in Pt. 1, when March 2020 arrived and we realized that Covid-19 was here to stay, our expectations were that the virus would finally stop the historic real estate market we have experienced. Paired with that, our assumption was that potential unemployment and uncertainty with the economy would make leasing investment properties difficult this year.

THE REALITY HAS BEEN THE EXACT OPPOSITE:

• (There have been 25% less homes for sale) + (Buyer demand has INCREASED) + (Historically Low Mortgage Rates) = a 13% INCREASE in sales prices comparing summer 2019 with summer 2020!

• At Townside, where we manage around 700 rentals, only 3 went unleased for 2020-2021.

The potential impact of Covid on where people live and work

As the onset of Covid caused offices to close, many workers who began to work from home beginning the avalanche of zoom meetings that we’ve all grown accustomed to. For a growing number of workers living in expensive city centers, the ability to work from home has opened up the possibility of living in lower cost areas that offer a more attractive pace of life. A microcosm of this was reported on the NBC Evening News which you can view in this video:

Location Independence and NRV Real Estate

When you can work anywhere, you can live anywhere.

Location independent work environments accelerated by Covid are resulting in more people to have the option to move to more affordable areas that offer a high quality of life.

This is potentially great news for the NRV! With the tens of thousands of VT and Radford grads spread out all over the country, it will only take a small percentage of them to consider moving back to the NRV and working from here to keep our housing market stable and even growing.

We already see this trend with retirees who have historically made the NRV a top location in the country to retire. This trend has the potential to accelerate if VT and Radford grads, along with anyone desiring affordable housing in a beautiful mountain setting, decide to settle here in the NRV.

What are these potential buyers looking for?

As you consider selling your home or investing in a rental targeted toward someone ‘migrating’ to the NRV, keep these amenities in mind:

• This type of buyer/renter will be looking for an updated, move in ready home

• For retiree buyers/renters, they would prioritize hassle free living where exterior maintenance is provided - such as in an HOA. Places where one can age in place with amenities like a master on main are important.

• For buyers/renters looking to work from home: a dedicated office space that is separate from the main living area. Potentially even multiple spaces that could be used for office/school.

Conclusion

Covid has turned life upside down in many ways and there will be lasting effects of the disease and the pain it has caused for some time to come. There are also impacts of covid that have accelerated trends that were already present in our culture that could have some positive effects in some arenas of life such as real estate.

Speaking purely in terms of NRV real estate, with the potential that the universities in our area will rebound as well as the desirability to live in a region that has as much to offer as ours does, there is good reason to remain positive about the long term outlook of our real estate market.

Do you know a seller who is ready to get their property listed?

Are you trying to figure out how to purchase a home in this fast paced market?

Do you want to learn how to build long term wealth through real estate?

Please get in touch. It would be my privilege to help you.

Philip Bowling, REALTOR

PhilipBowling@gmail.com

(978) 473-0587 (c)

May 2020 NRV Real Estate Market - Everything's Changed, Everything's the Same

As I am writing this post, states across the US are beginning to slowly reopen after being shut down by Covid-19. While the shut down has affected the real estate market in the NRV, it is not necessarily how you might expect. Read on to get a market snapshot for the area as well as a few takeaways on how this might affect buyers, sellers, and investors.

Bottom Line: The low number of houses on the market has gotten even lower as sellers have decided not to list because of the uncertain economic outlook. This has increased buyer demand even more, driving prices higher and selling the few homes on the market that are priced well quickly.

Market Data

Active Listings for Sale

Number of Sales YTD

Average Days on the Market

Avg Increase in % Sales Price for Homes Under $450k

As you can see from the data above*, sellers have become wary of selling resulting in fewer listings. However, with continued buyer demand these fewer listings are selling in less days on the market for higher prices than they were at this time last year in a historically hot market!

What does this mean for:

Sellers

• Now is a good time to sell. There are buyers hungry for homes and investments in the New River Valley and, at least for right now, you will be listing at a market high with less competition than is typical for a spring/summer market.

• Depending on what changes with the local universities, offices transitioning to work from home environments, and how the economic recovery pans out there is a chance we will see a market decline in the next year making now potentially the best time to consider a sell if that is something you might consider in the next 1-3 years.

Buyers

• If you are waiting for the market to drop due to Covid-19, you will have to wait longer. Indications are that current market conditions will continue through this summer because of continued high buyer demand connected to the growth of the area. The decreased inventory has only increased this demand as there are fewer sellers deciding not to list than buyers deciding not to buy.

• Make sure you are pre-approved with a local lender. Lending restrictions have become more strict in the past couple of months so make sure you will be able to qualify for financing.

Investors

• Risk breeds opportunity. We have not seen a softening of the undergraduate housing market as of yet - properties on the bus line next to the university are still moving quickly for high prices. However, if there is an indication of a change this fall, buying opportunities might present themselves as uncertainty scares some parents and investors out of the market. Have cash and financing ready to go.

• There are currently opportunities to purchase cash flowing homes/townhouses in Christiansburg and Radford. There are two properties in particular I have been watching that I believe would make sound investments. The NRV is still growing and the demand for affordable housing is still there outside of the university market.

Conclusion: For now, even though it feels like everything has changed, in many ways the market has stayed the same: homes moving for close to list price very quickly. Will this last? It is hard to say. More information from Virginia Tech and Radford about their future plans as well as whether or not Covid-19 remerges with a vengeance later in the year have the potential to dramatically impact the market this fall and beyond.

Do you know a seller who is ready to get their property listed?

Are you trying to figure out how to purchase a home in this fast paced market?

Do you want to learn how to build long term wealth through real estate?

Please get in touch. It would be my privilege to help you out.

Philip Bowling, REALTOR

PhilipBowling@gmail.com

(978) 473-0587 (c)

*Data comes from statistics pulled from InfoSparks, a service provided by the NRVAR.

Covid-19 and the New River Valley Real Estate Market

How is Covid-19 Affecting the Real Estate Market in the New River Valley?

To say that all that has happened with Covid-19 in the past few months was unexpected is the understatement of the century. Who would have thought as the economy was humming along at an incredible rate in January that everything would be ground to a stop in March?

While it will not be possible to know the long term effects of Covid-19 on the overall economy and real estate market for some time, here is some information about how the pandemic is affecting the real estate market today.

Covid-19 and the NRV Real Estate Market

• Housing inventory is down in the past month due to Covid-19 fears, however home values have remained stable.  Home values are projected to remain stable for at least the next 6 months because of continued buyer demand.

• For investor owners, as of April, 2020, we have just seen a slight decrease at Townside Property Management in the pace of leases being signed for the fall.  However, even in the midst of Covid-19 we still have leases being signed for next year every day.

• You might consider refinancing your mortgage.  Rates are at historic lows and you could potentially save a substantial amount of money every month by refinancing at a lower interest rate. Fannie Mae projects that interest rates will continue to fall through 2021.

New Development Continues around the NRV

In Christiansburg on 114:

• Stateson Homes continues construction on the Clifton Town Center, modeled after the Daleville Town Center in Botetourt that will feature townhomes, apartments, office space, and a hotel.  

• Fralin Homes plans to begin developing 9 acres near New River Village into 14 townhomes and 132 apartments that will be called Magnolia Pointe.

• Takeaway:  There will still be homebuyers and renters who want to live in a mature associations and neighborhoods with full grown trees and wider streets.  Upgraded homes in established areas will continue to be highly desirable.

In Blacksburg

• Multiple builders are developing hundreds of bedrooms of luxury’ student housing that are renting for $700-$1100 per person per month - most are fully furnished.  Examples are Park37, The Retreat, and The Edge which are fully developed. 

• Terrace View on the corner of Tom’s Creek and Patrick Henry is under new ownership and going through extensive renovation. Jefferson St. Apartments on East Clay are adding 255 new bedrooms across 6 buildings that will rent for $400-$500/bedroom.

• Takeaway:  Many students will be priced out of the luxury market and will be looking for medium priced rentals that still offer some of the upgrades of the luxury units.  The increased rent that older, but upgraded, units can get can make them a good value even in today’s market.

Conclusion

• Even in these uncertain times, the real estate market has remained stable. There are less listings, but those still listings are still moving quickly for close to list price. Anecdotally, in the past week I listed a property, closed on a property, and am about to put 2 properties under contract - things are still happening!

• However, there is uncertainty in the market, which can lead both to buying and selling opportunities for savvy buyers and sellers.

• Continued, historically low interest rates make now an incredible time to refinance if you have an interest rate over 4%. The rates also create a unique buying opportunity - a lower rate essentially allows you to purchase a property on discount.

How are you feeling about the real estate market in the midst of Covid-19? I’d love to hear from you and help in any way I can!

If you have been thinking about getting into real estate as an investor or first time home buyer, with the extra time we all have on our hands, now is the perfect time to educate yourself to get ready to jump in the game when things pick back up. Please let me know if I can point you in the right direction!

Get in touch anytime - I’m here to help!

philipbowling@gmail.com // 978.473.0587