Although I said I'd put together waterfront residential sales broken down by price point at this point, I think that that will come a bit later in the week and right now I'll take a look at the "consequences" of the Fones Cliff rezoning.
As you may or may not know, this has been a very lengthy and expensive ongoing effort on the part of the owner to rezone the property. Although beautiful and full of natural resources that many consider to be irreplacable, those attributes are not the ones that have been most important to me. I have never thought that this was a nature versus economics decision. I have never really thought that by rezoning this the Board of Supervisors would totally lose their compass and start approving all sorts of inappropriate uses throughout Richmond county. What I thought from the beginning and said to a number of people....well "it either fails, or it fails." And what do I mean by that? Well, if it failed, meaning it didn't get rezoned, that is pretty clear. It just plain failed. If it were passed, then in my mind it goes into another mode of failure....it is perhaps just a bit more long term.
This subdivision and its ultimate success was/is related to facts and the presenters did not include a lot of reality in their approach. They did not talk to local realtors. They did not look at our sales data. They went with something I've seen before....first while working in marketing in a large firm in NYC and later while taking marketing classes at NYU in their graduate school of business. The people on the outside with big credentials often can see things that we, the little people can't. They can see the bigger picture. So what bigger picture did they see? They saw what is perfectly logical and makes sense to me every day of the week....the Northern Neck is close enough to a multitude of large cities and therefore there must be an overwhelming demand for the reasonable price of vacation, getaway, even resort property. Yes, it seems perfectly logical, except that the sales numbers don't bear this out. The numbers say that for all that is great about the Northern Neck, for all its proximity to DC, Richmond, Annapolis, Newport News, Fredericksburg and on and on, we are not swamped with buyers, and a few years into the "recovery" it is still a buyers market.
Depending on what segment of the land (lot) market you look at we have either 6 or 8 or 10 years worth of inventory (from time to time I do breaks on land and look at the amount of inventory...I'll do that again if not until year's end). Many of these lots have been on the market for years. Other owners who had been trying to sell have withdrawn their properties after extended periods where the listing languished. So the numbers we refer to as "inventory" are perhaps the tip of the iceberg. It may be that the 6 year inventory segment is actually 8 and the 8 is actually 10 and the 10 is actually 12. Land isn't selling quickly or in great numbers.
We also have many many subdivisions that are at various stages of moving forward with many sitting with lots of vacant lots....waiting for the next wave, but it may take a long time. As I've said repeatedly, it is not very sensible to start building a home when costs of materials and labor are high...when you can purchase a property that is already built and at a discount. Also, most of the best lots on the Northern Neck are already built on. People knew what they were looking at 10 and 20 and 30 and more years ago.
So now with the rezoning, Fones Cliffs has the opportunity to become a thriving resort, provided someone will buy it and develop it. But let us look at what this location brings to the buyers. First, it is far from a quart of milk. That is one of my key criteria for comfort. Yes, they say the plan is to put in a store, but when in the process of the development will that happen, and do the sophisticated, upscale people (who as best I can tell the local real estate agents haven't yet found) want only one store to go to? Do they want to drive 20 or 30 minutes to small towns, with limited places to shop? Do they want to spend their lives exclusively in a location where they are living close by to their 200 or 300 or 700 neighbors? What is the cachet? Is it the golf course? Is it the equestrian center? Is it being able to walk over to look over the cliffs? Is it to climb down 30 or 40 or 50 or more steps to get to a small boat or kayak? We who have been selling in the Northern Neck know that waterfront most often needs to be easily accessible....so Fones Cliffs doesn't offer reasonable accessibility. Probably a property that was inland....wouldn't cost a zillion dollars, was more centrally located, would make a lot more sense for a developer to consider if they were sure that golf and horses would be a huge draw.
In talking with a friend yesterday I speculated that the land market for a property (waterfront and lots of acres) has probably declined in the year or so since this ongoing Fones Cliffs rezoning controversy has been causing everyone to stop and focus on the owner's ideas and place them ahead of our own planning. I thought, hmmm, wonder if after all they spent, if the market has declined and no one is buying land to do developments, I wonder if the value of the property has dropped in the last twelve months. In order to better consider this, I looked at waterfront property that has sold in the last few years....50 acres plus. Here is how it pans out:
2011. There was one property sale (waterfront land over 50 acres). It sold for $2,074,000. This was for 277 acres and it sold for $7487 per acre.
2012. There was one property sale (waterfront land over 50 acres). It sold for $201,000 and was for 75 acres. The cost per acre was $2680.
2013. Two properties sold. One for $170,000 for 59.2 acres at a cost per acre of $2871. The second for $367,500 for 121 acres at a $3037/acre cost.
2014. Again, two sold. One for $185,000 for 84.7 acres at a per acre cost of $2,184. The second for 725,000 for 99.11 acres at a cost of $7315.10.
2015.......hmmm, none. So I looked at the next step down in our MLS which is 20 to 50 acres and yes, there has been one property sold.
Sales price of $315,000 for a parcel that is 42.78 acres. This for $7363/acre.
These numbers are from the full MLS from the NN Assocation of Realtors. I did not limit it to the four counties of the Northern Neck. Nor those counties plus Essx or those counties plus King George. I just left it for all counties. The majority of our listings come from the four or five counties but other counties are represented in our MLS.
To put the sold numbers in perspective I'm going back into our MLS and look at what is active in those two waterfront segments. Will have that in a minute. Back again.....So there are 8 properties that are 50 acres plus, waterfront and active on the market. For the segment 20-50 there are 12. And looking at some of the 50 acre pieces I see a parcel that is a much better fit for the Fones Cliffs development plan and that would be down at Bluff Point. Close to Kilmarnock and amenities, you'd be able to probably have reasonable pier access.....it is at an asking price of about $3.5 million and so much less expensive. We can only hope that whoever the big developer is who is looking to build on the Northern Neck--that after they do their homework they see that there are some great deals out there, and Fones Cliffs is not the place to put their dollars. We'll see what this rezoning really is all about, although it may take some time. Stay tuned.