[badger74]

500 high paying new jobs coming. There go my home values-UP

http://www.newsadvance.com/lna/news/loc ... burg/5534/

[SuperJon]

Why will that make your home value go up?

[badger74]

I have two houses in the desirable 24503 area. That is only a short drive from the Areva building. With high gas prices and few new homes in the close-in mature areas demand goes higher. Prices go up. Same for the new cancer center that just opened. Even if only 50-100 choose to live in the neighborhood that is a nice increase in people looking to buy in the area.

[SuperJon]

It doesn't mean the prices will definitely go up. People have to want to pay more. Gas prices are high, along with everything else, so they're going to want to pay the least amount as possible for their house. With the taxes that Lynchburg has, people will pay the extra money to drive 5-10 miles further and live outside of the city limits in as nice of a house for 3/4 of the price.

[badger74]

There are always some who prefer older and classic over new and tacky. You don't get slate roofs, all brick construction, all hardwoods, plaster walls, and prestige in some faceless subdivision in the boonies. Even at the "high" rates taxes in L are cheap compared to what many are used to. My brother in NJ pays 5 times as much tax on a similar home.

[SuperJon]

Jersey is A LOT different than Lynchburg.

[Sly Fox]

I'm with badger on this one. I see highly educated engineers who have an appreciation for quality construction pushing Boonsboro properties up. This may not have a big impact across the entire area. But it will be a boost to higher end homes.

[Schfourteenteen]

My brother in NJ pays 5 times as much tax on a similar home.

Possibly understatement of the year

[LUconn]

I believe Badger's place is on Peakland. That street is basically in a vacuum. There are only so many houses on that street and they will always be in demand.

[4everfsu]

Good news for LU engineering school, can only help it to grow

[flamesbball84]

Good news for LU engineering school, can only help it to grow

Will help out MBA programs as well. Seems like a lot of engineers eventually end up getting their MBA. at least around here it seems like that.

[Sly Fox]

Did anybody notice that 84 just brought in a quality observation?

[SuperJon]

Blind squirrel finds a nut every so often.

I still stick by my people have to be willing to pay it before the price will go up theory. It wouldn't surprise me if it made a little bit of money, but it's not going to be anywhere close to what Scar made off of his house in the two or three years he had it.

[scuzdriver]

There are always some who prefer older and classic over new and tacky. You don't get slate roofs, all brick construction, all hardwoods, plaster walls, and prestige in some faceless subdivision in the boonies. Even at the "high" rates taxes in L are cheap compared to what many are used to. My brother in NJ pays 5 times as much tax on a similar home.

Old also means small, no closest or storage space, usually needs gutted and redone, and plaster walls do look great but they are the absolute worst to work with. Give me drywall anyday! BTW I live in a new house and it's anything but tacky, it must be the builders you have in Lynchburg.

[rogers3]

So my older home is near badger's and it has already been rewired, modernized, and it has closet space- plus slate roof and brick walls; better than anything of the same size built today. By the way badger, home prices in the burg were actually increasing before the job announcement and I think that you will see continued increases. I'm betting that all the nouveau riche who have gone to the suburbs for a bit of land to go with their mcmansion will be wishing they could dump their gas guzzling suburbans and get a bit closer to the urban center. There must be nothing worse than having to drive to get ANYWHERE!

[badger74]

Yes, L has been spared the worst of the home value downturn hitting most of the US as it never got that crazy to begin with. I follow things pretty closely thanks to the net and all the data out there. I was not saying things are going to jump 25% over night or anything. Just a nice little boost in demand in the higher price range over $200,000 as anyone coming to L from a major city will still find great bang for the buck in homes. And yes older homes might lack some of the stuff in the newer ones but there are at least some of us who can put up with smaller closets for the joy of a home built with real wood and quality. Even better new homes are built mostly with chip boards and the lumber used is really low grade. My homes were built in the late 30's so most of the systems were relatively modern--all copper plumbing, 200 amp wiring, etc. I do have gas fired boiler heat but it would be easy to change over to electric forced air as full AC is ducted throughout. When the old boiler dies that's probably what we'll do. But the Mosely guys say the old thing is still solid and could last another decade or more.

http://www.varealtor.com/Research/Virgi ... fault.aspx

[JDUB]

I still stick by my people have to be willing to pay it before the price will go up theory.

duh... obviously if people won't pay the price they won't go up. thats common sense. what everyone is saying is people will be willing to pay it

[SuperJon]

It's common sense, but there's a little more than common sense to it.


If someone is willing to pay $250,000 for a house and are trying to finance it, the house won't pass the appraisal if there aren't houses in the neighborhood already selling for close to that price. The seller can't ask for a price over and beyond that of what the neighborhood is going for. If most houses are going for, say, $225,000 then you can probably get away with asking $235,00 (even that's pushing it) but you're not going to get $250,000 for a house if everything is being sold for $225,000. Unless the people have insanely good credit or can put down a crap ton on the down payment, that thing's not passing the appraisal.

[Sly Fox]

Wow, lenders are being that tight in Virginia? Even with the subprime disaster lenders here will still recognize appreciation 3-4% They wouldn't have any customers down here otherwise.

Count me among those who will take an older custom home over a newer one of similar price. The quality of construction on even the highest end homes rarely touches the quality of a generation ago when real lumber was standard fare and the poured real floors in upstairs bathrooms. That's why we are renovated our current home after looking at new ones. Its easy to expand closet space and we are converting formals into more pracrtical uses for very little investment.

[SuperJon]

Wow, lenders are being that tight in Virginia? Even with the subprime disaster lenders here will still recognize appreciation 3-4% They wouldn't have any customers down here otherwise.

What I mentioned was slightly above a 4% appreciation.


Also, what you have to realize is that appraisers use comparable sales that have ideally been in the past six months. A 4% growth in six months is pretty lenient.

[rogers3]

Having bought in the Rivermont area, my experience is that comps are a bit more difficult to put your finger on in these older neighborhoods. The neighborhood comps have little bearing on the value that the bank will finance. Rivermont and Boonsboro are two areas that buck the common real estate standards; where else around here can you find houses within a few blocks of each other with a 600,000 difference in price. The comps might be drawn from a much wider area than normal. I'm not sure what your background in Lynchburg real estate is SJ, but I've found that the norms don't apply in these areas for the homes or the buyers. I would agree though, that in most areas of Lynchburg, including the Forest area, the comps within the neighborhood play a bigger role in the appraisal. I know of a couple of Realtors who pursue business in the 24503 zip code because they view it as a bit outside of the average.

[SuperJon]

I realize that in some cases, you have to go further than a neighborhood. Believe me, working in rural areas, that's obvious. However, you still compare houses to the closest, most-like house that has sold within the time frame. There are always exceptions, but you're not going to go 20 miles for a comparable when there are five other ones closer. The "neighborhood" in this instance might be something other than the "subdivision," but the rules still remain the same. Comparable sales are the factor that is most used in determining value of a home.

[rogers3]

Housing prices are also driven by the ability one has to purchase/finance and the willingness of a buyer to pay for the house. The argument is that in the Rivermont and Boonsboro area, buyers are often a bit different than the average and coming from elsewhere, are often willing to pay more than a comp might suggest necessary. Check the city's assessment data and compare look at the prices along the corridor and you'll see what I mean. The same is not true of the three different neighborhoods that three of my family members are living in now, all of which are less than 15 years old and have houses starting in the 300's. Theory is great, but experience is another thing.

[AZjonz]

If Peakland is the street I am thinking off of Boonesboro, then I would chose to live there if I had my choice and finances - assuming I moved back to Lynchburg. It has a uniqueness to it I dig. SJ, you look at comps and other data to try to come up with an objective value. How do you account for the subjective value? Or is that accounted for by market forces? Just curious now that it is being discussed.

(BTW – I know there’s a lot to home valuation, but the 101 version would work for me as I’m sure you don’t want to write a 10 page spew down on home appraisal.)

[SuperJon]

SJ, you look at comps and other data to try to come up with an objective value. How do you account for the subjective value? Or is that accounted for by market forces? Just curious now that it is being discussed.

What exactly are you considering subjective value? We have to get that clear before I even start to try to answer the question.