Rappahannock real estate sales drop in third quarter as slowdown creates a buyer’s market–with hesitant buyers
By James P. Gannon
The slump in the real estate market that began last year continued in the latest quarter, as the number of Rappahannock County property transfers declined nearly 40% and the value of properties sold dropped by more than half from a year earlier.
Land and home sales continued to decline from the 2006 pace, and with fewer expensive properties changing hands, the value of sales fell sharply, a review of property transfer records in the county Clerk’s office shows.
In the three months ended Sept. 30, a total of 23 sales transactions were recorded, compared with 38 such transfers in the July-through-September quarter a year earlier. The total value of properties sold in the third quarter this year exceeded $8.9 million, down sharply from more than $21 million in the comparable 2006 quarter.
Reflecting national trends in real estate, the local property market has turned in favor of buyers, but county Realtors report that buyers growing more hesitant and choosy. Prices have not declined significantly, as they have in many other markets, but some sellers are lowering asking prices and others are simply removing their properties from the market to wait for a better time to sell.
Local real estate agents use differing descriptions of the current state of the market, but their comments paint pretty much the same picture with variations in shading.
“The market is relatively quiet,” said Alan Zuschlag, an agent for Armfield Miller & Ripley in Washington, VA. “We have completed the shift from a seller’s market to a buyer’s market….Both potential buyers and sellers are more cautious and unwilling to take risks in this market,” he said. “This means pricing is a bit more conservative, properties take longer to sell, buyers are more thorough in their research before making a purchase.”
At Rappahannock Real Estate Resources, broker L.G. “Butch” Zindel said: “The market is active–buyers are looking but taking their time to write offers. Overpriced properties are not even receiving offers.”
Both Zuschlag and Zindel said potential-buyer traffic remains good. “I am very busy showing properties,” said the Armfield, Miller & Ripley agent. “What has changed is buyers’ willingness to actually write an offer on a property.” Most buyers have a “wait-and-see” attitude, he said: “They feel the longer they wait, the more flexible the sellers will be on price, and the more properties there will be to choose from.”
Zindel finds that “listings are continuing and sales are happening.” He said, “We have had three closings this month (October) and two scheduled before the end of the month….buying traffic has increased.”
On the other hand, prices are soft, though there’s been no sharp decline in values. It’s practically impossible to determine any kind of an “average” change in prices, because there are relatively few sales overall, and because Rappahannock County properties differ so much from each other that an “average” is meaningless.
Zindel puts it this way: “Prices have dropped to reasonable levels, and informed sellers are lowering asking prices, and negotiating.”
“If sellers are not getting their prices, they can simply take their properties off the market and sit tight until the market prices rebound to their levels,” Zuschlag said. “This is happening to a large extent. Some sellers who had unrealistic price expectations for their properties have adjusted their prices in line with market reality, but on the whole there has been no real price erosion in Rappahannock–nor do I expect there to be.”
Most Rappahannock County sellers to not “need” to sell, Zuschlag noted; they are not being transferred to another area, are not in financial difficulties or unable to meet mortgage payments–as is happening in many areas, including Northern Virginia. Rappahannock sellers can simply take their properties off the market, and “I have encouraged many sellers to do so,” Zuschlag added.
The mortgage credit crisis that’s affecting real estate in many parts of the county, with rising foreclosures and more buyers unable to afford payments, has had no impact so far in Rappahannock County, both Realtors agree. Given the high prices of homes and land here, buyers tend to be affluent, often paying cash or finding it easy to get credit and make monthly payments.
Still, fewer expensive properties are changing hands. In the latest quarter, there were only five property transfers recorded exceeding $500,000 in value, compared with 11 such sales in the third quarter of 2006, according to county records. September was a particularly slow month, with only five property sales totaling $1.4 million in value.
In the latest quarter, there were two sales exceeding $1 million each in value. In July, Richard S. Dimmell and wife sold a 100-acre property in Wakefield district for $1,211,500 to Gregory W. Vaught and wife of Front Royal, VA, according to clerk records; in August, Burke Realty Capital LLC sold 100 acres in two 50-acre parcels in Jackson District for $1.3 million to Robert E. O’Hara III and wife, of Saddle River, NJ. There were four such million-dollar-plus sales in the year-earlier quarter.
-- James P. Gannon
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