Braemar Property Value Report: September-October 2022 (Heritage Series)
It certainly did get bone chillingly cold in short order. And if you listen to talking heads about what rising mortgage interest rates are doing to the real estate market, you may see a metaphor coming. Not from me. Buyer activity has changed, but we are still in a seller’s market. In this edition of the Braemar Property Value Report, focused on Heritage homes in our neighborhood, the news will be one-hundred percent local, analyzed by me, who actually works full-time in the field.
Before we begin, let me clarify what qualifies a house in Braemar as a Heritage home. They are the mid-sized single family homes, built by Brookfield Homes in our neighborhood. They have two car attached garages and include the following floor plans: Exeter, Yardley, Zachery (a.k.a. Zurich) & Waverly. The homes built by Coscan (before Brookfield Homes took them over) in Braemar North Gate are also included in this group, as they are similar in size.
During the current reporting period of September and October, there were two Heritage homes that sold in Braemar. Both were Yardleys with partially finished basements. Details of those sales are below.
The sale highlighted in pink text was my listing. I was surprised to see another Yardley sell for more just days later, but once I saw the difference in the home, I understood. In fact, the difference between these two sales is a great lesson in “market extraction,” the method appraisers use to determine what an upgrade or feature in a home is worth. First, they must find homes similar. One without the feature(s) and one with the feature(s.) The difference is the “market extraction” for the feature or upgrade. In this case, if an appraiser wanted to know what hardwood floors on the entire main level and a walk-up exit from the basement were worth, that would be $22,000. While my listing did go under contract quickly for what was happening at the time, and get a great price, it did not have an exit from the basement and there were three types of flooring on the main level: hardwood in the foyer and dining room, carpet in the living room and family room and a one sheet vinyl installation in the kitchen and breakfast nook. We did talk about lifting the value with updating the flooring to LVP throughout, but what they would have spent would not have made up for it. They still didn’t have an exit from the basement. They got what they had in great shape and did very well on the market.
Taking these sales and combining them with the Heritage home sales dating back to November 2021, the six and twelve month data points are updated and still show a seller favored market.
Starting with an examination of the sold price column, both six month values are higher than their respective twelve month values. However the gap between them, compared to last report, is narrowing. The steep increase in mortgage interest rates has affect buyer behavior, but demand is still outpacing supply. Buyers are simply no longer prone to a feeding frenzy that has them bidding above list and waiving contingencies. Our values are still trending up, just not steeply.
Seller subsidy (closing cost assitance from seller to buyer) is surprisingly absent from the six month median values, unlike a lot of reports I have prepared for the same time period. It is not surprising to see small values in the six and twelve month average values. Mortgage interest rate buy downs are being requested by buyers, and in some cases, offered by sellers in lieu of lowering list prices.
Days on market shows a two day uptick in the six month average marketing time compared to the twelve month average marketing time. Meanwhile, the six and twelve month median marketing times are the same at six days. Despite the change in buyer behavior, homes are not taking very long to go under contract.
If you placed your Braemar Heritage home on the market, priced to current conditions, you could expect it to be under contract in about two weeks. You could also expect buyers to not be shy about asking for seller subsidy. You don’t need to offer it. If your home is well prepared, properly priced and professionally marketed, it should create enough buyer enthusiasm that a buyer may act without asking for closing cost assistance. Getting buyers excited about a listing in any market is the key to getting the best terms in the shortest amount of time.
The next Braemar Property Value Report will be out in January and will let us know how we ended the year. In the meantime, I hope you enjoy this upcoming holiday season. If a move pops up on your horizon, know that my business is open year round, connecting buyers and sellers no matter the season. Get in touch and let me know when you are planning to list so we can get a head start on creating that buyer enthusisam. Since 2005, No One Knows Braemar Better!