Market Update: Same Story, New Year
It's the same story, just a different year. The market slowed slightly in December and early January, but our inventory has never been lower. I have been around for a while, but even the grizzly 35-year real estate veterans have never experienced anything like this.
Some ask, but what about the rise in interest rates? Has that slowed the market down? The answer is no, and quite the opposite! With people fearing that interest rates will rise, they have jumped into the market hoping to snag a house before they increase even more. Despite the talk about rate jumps, top economists still predict that the DC, MD, and VA markets will thrive.
In my opinion, the pandemic has shown people how valuable owning a home is. Spending most of the day at home shifted the way people view their residence and brought to light the importance of function and comfort. Perhaps the pandemic also sparked an awakening in which people realized life is short, so don’t wait to go out and get what you want.
Prepping Your Home Before Listing
Seller’s market, you say?? Yes, it is absolutely a seller’s market, and inventory is at an all-time low. So you may be tempted to jump the gun and list your house ASAP! But…don’t forget that prepping your home before listing is still essential, and the market is handsomely rewarding sellers who don’t overlook this step!
Here is a plan I recently implemented with a seller:*
Cleared out everything from the home. This required several dumpsters.
Held an estate sale of anything in the house of value they didn’t intend to keep. This netted thousands of dollars, much more than anyone assumed.
Refreshed the bathrooms with new tile, vanities, toilets, and fixtures.
Sanded and refinished the hardwood floors. We used natural stain with a matte finish. Banging!
Painted the entire interior of the house with Sherwin Williams Snowbound white.
Replaced the light fixtures, including the chandeliers, recessed lights, and hall lights.
Installed new carpet in the basement.
Refreshed the landscaping by clearing out the overgrown backyard and adding new grass, a few bushes, and mulch.
Staging, staging, staging!!!
If you want to maximize the sale price, you need to not only have a plan, but also have the right resources to implement it! For example, a knowledgeable agent 🎺🎺 (tooting my own horn 🤣) with a list of reputable contractors to help get the job done!
*Typically, this is a mostly hands-off process for my sellers. But in this case, they wanted to be involved and absolutely worked their BLEEPS off throughout the entire process!
Was It Really Worth It?
When it comes to selling a house, we can’t exactly set up a controlled experiment to determine what it would have sold for pre- versus post-prep. But we can compare the property to other homes in the neighborhood that have closed within the last few months.
Two doors down, a similar home had recently sold for $1.85M without any pre-listing preparation. The property was about 1,000 square feet larger and had a 2-car garage, both of which can make a big difference in price. Knowing that, here was the outcome:
Original estimate as-is: $1.7M
Renovation and preparation budget: $125K
Closing price: $2.3M
Additional return: $425K!!
Crazy, right? If you know anyone that might want a complimentary evaluation of their home value as-is versus post-prep, please pass along this email or have them give me a ring. Also, if they do not have the cash to renovate before selling, Compass Concierge will take care of that. Compass will front the money to prepare the home, and then it gets paid back at the closing!
A New Way to Invest in Real Estate: The Metaverse
You’ve probably heard the buzz about the metaverse…but what the heck is it? The way I see it, it’s a turbocharged, virtual reality version of “playing house online.” You can create your avatar, go shopping, tend to your garden, connect with friends, play video games, go out on dates…nearly everything you can do in real life can be done in the metaverse. And now, you can even buy real estate with actual, real-life currency (be it dollars or crypto).
Why would I throw money at fake real estate? That was my initial thought when first hearing about this new trend. But after digging a little deeper, I started to understand the craze. Only a few months after Snoop Dogg announced he was building a virtual world in The Sandbox (one of several metaverse platforms), he sold a digital plot of land in it for $450,000. So why buy land in Snoopverse?
Imagine this: Snoop Dogg holds a virtual concert, for which metaverse users buy tickets to attend. Much like an in-person concert, people (or in this case, humans behind their avatars) may gather beforehand to grab a bite to eat and then head to the bar afterwards to talk about how fun the concert was. So, if I’m a brand, and I purchase a virtual plot of land near Snoop’s concert venue, I can then build a bar, restaurant, retail shop, etc., and sell my products to his fans. At the very least, I can create brand recognition that may convert to both virtual and real-life sales.
In essence, investing in the metaverse is a form of advertising. It’s about buying views, or what the online advertising industry calls impressions. Say you purchased the house next door to Snoop’s for $100K, and 1 million people see your branded banner out front while on their way to the rapper’s home. That’s only 10¢ per view. Businesses can justify this expense as part of their advertising and marketing efforts.
Okay, so hold on. Don’t jump just yet at the opportunity to buy land in Snoopverse because 1) the second-hand smoke may severely hurt your productivity level 2) it’s a volatile industry yet to be regulated 3) there are so many unknowns. But, if we look into our crystal ball, will our kids ask us 40 years from now why we didn’t invest back in the day?
Stay tuned! As this new world develops, we’ll keep you posted on the latest information in upcoming newsletters and blog posts.
Can I Ask for a Favor?
95% of my clients come to me through referrals from all of you, and I can’t express how grateful I am for that! I’m never too busy to take a call, so please don’t hesitate to continue sending people my way!