Month: January 2012

A great time to buy…now?

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It is definitely an interesting time in real estate in Northern Virginia.  We have extremely low inventory levels that remain below normal for this time of year.  As an example in January of 2008, we averaged 15,500 active listings, in 2009 it was 10,200, in the year of Snowmagedon in 2010 it was 4,800 because people took their houses off the market and agents couldn’t get out and about to list them, in 2011 it was 5,800 and now we are at 4,700.  What is interesting to note is the month’s supply of houses in the same time frame – 2008 it was 10.8, 2009 4.0 and since then it has been 2.3 in 2010, 2.8 in 2011 and this year 2.2.  What this clearly indicates is there are buyers out in the marketplace looking for homes in the winter months – not just the spring months now.  Interest rates remain very low – below 4% for 30 year fixed rates – jobs are being created here so people are moving into the area and rental rates are rising throughout Northern Virginia. 

If your family circumstances, job status, or you just have the desire to sell your house and move up to a bigger home, now is a great time to do so.  Houses that are priced right, in the right condition and staged properly are attracting offers.  One of the biggest parts of this equation is the price – price sells today.  Sellers cannot price a little high for negotiations as we have seen that they languish on the market in this situation.  Price it competitively and it will sell.

Buyers have a great opportunity today.  The housing affordability index is at an all-time high  and in many cases house payments are less than rental payments even before considering the tax benefits of home ownership.  For buyers looking for the long term benefits of home ownership, there historically has not been a better time.  Prices are remaining stable, interest rates are low, and the housing industry is on the rebound meaning we have already hit the bottom and we are on the upswing if you were trying to time the market.

Whatever your situation is, we can help.  Please feel free to contact us to discuss your personal needs in more detail and see if now is the right time for you to make a move.

What’s 2012 looking like?

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As we enter 2012, there is much speculation about real estate yet again.  Will there be more foreclosures?  Will housing values continue to drop?  How long will interest rates stay low?  When will lending guidelines reverse their trend of more restrictive policies?  Should I buy or wait?  Will short sale guidelines become more uniform? What will it take to improve the housing market?  Well, as I have said in the past, my crystal ball is broken but I can look at trends, read reports and provide some guidance.  Let’s take a look at what we have seen recently.

Will there be more foreclosures?  As the inventory of short sales decrease and the notice of trustee sales in the papers remain low, we will not see a tremendous amount of foreclosures hit the Northern Virginia market.  When we see an increase they won’t have a significant impact like they had on our market in 2008-2010.  The inventory will come when banks begin to evict people who have been living in houses mortgage payment and rent free for several months.  Additionally we will see some foreclosures come on the as people lose their jobs.  Again, the impact will not be severe in my opinion and will be absorbed as inventory levels are at 2 year lows in Northern Virginia.

As inventory remains low, prices will remain stable and in some areas they will increase.  If owners invest in their homes by upgrading kitchens, bathrooms, and updating carpets, paint etc. they will see the return when they sell.  Homes in the right condition, staged and priced properly see multiple contracts and often get bid up above list price.

Interest rates will remain low for the foreseeable future. The Federal Reserve has stated they will keep their rates in the same range through mid-2013 and as such, mortgage rates should remain low.  There are of course some outside factors that could change this such as the European debt crisis, and energy costs rising but overall we will be in the 3.75-4.5% range for mortgage rates.

It doesn’t seem that lending guidelines will restrict any time in the near future.  Underwriters continue to ask for last minute items, credit is being checked for a second time just before settlement, requests for obscure items are being asked for and when you think you’ve heard it all, you hear something new.  On the bright side, mortgage insurance companies are becoming more flexible in their requirements which is helping in some instances.  Unless it is mandated by the government through the GSEs, I don’t see guidelines relaxing for some time.

If someone has found a home that meets their requirements as far as location, size, price and affordability then yes, now is the time to buy!  Especially if it is for a long term hold, you need to buy now.  In a recent survey, 78% of Americans believe housing is a great investment.  As previously mentioned, rates are excellent and you need to take advantage of them as well.

We are dealing with fewer short sales in Northern Virginia today but they do seem to be closing at a higher rate than before which is great for both buyers and sellers.  We anticipate this trend to continue.

So what will it take bring the market back? In a two words, I say, consumer confidence.  How does consumer confidence improve?  Here are a  few ideas – job creation, lower energy costs, and more positive press on the economy.  Let’s see how this goes with the election coming up later in the year.

With a little more insight into the market, go help people make the right decisions when buying or selling houses.  Get it?  Got it?  Good!

Now, go sell something!

 

Real estate normal?

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What is the new normal in real estate:

Today I am going to share with you a few ideas that are going to help you get on to a successful year in 2012 – you will also hear a few ideas from other agents that they have planned to make this their best year ever as well. The important thing to remember is to only adapt 6 of the strategies. If you try to do too many, you will be overwhelmed and not do any. I recommend starting with 6 things you are not doing today and incorporate them into your business. Once you have mastered 6 add another one in until mastered and then add another and so on. In addition, it is important to set strategies for accomplishing what you set out to do and review them regularly. You are in business for yourself but not by yourself so partner with someone in the room and hold each other accountable – meet before or after training, before or after a real estate exchange – make it easy for you but the big thing is to just do it.

When looking at the strategies you are going to put in place, you need to be clear and specific about what you want to accomplish and write them down. Know what roadblocks and obstacles you will need to overcome to achieve what you want to do and then how you will overcome them. What will you need to do to develop the skills and instill the discipline within yourself to make them happen. You will need deadlines, detailed plans of action – 5 or so for each action item, and have them where you can review them regularly. Lastly, think about and visualize your end result and what it will be like when you have accomplished what you have set out to do.

• Be positive – have the right attitude and eliminate complaining from your life • I like the “theme” of the day – will you do it?

• You are going to have to work more focused and be more intentional

• You are going to have to sell yourself passively and aggressively – explain

• Training is going to be paramount – especially in financing – increase your skills by attending seminars, getting a designation, going to REIX, office trainings, you need to be good at what you do to build referrals

• Video is going to be important – Casey Anthony is doing video diaries – video houses, your listings, neighborhoods, how’s the market, etc.

• Networking is going to be critical – find a group, start a group, join a chamber, Rotary club, coach kids in sports, join a PTA, get involved in a charity, become involved in something

• Learning and interpreting market trends – you have to know your numbers such as inventory levels and types of inventory, prices, DOM, people love to hear this

• Stay on top of values by previewing – especially new homes as they will continue to have an impact on the market – this is a great way to start with video. Video your house of the week, your bargain of the week, or whatever you want to call it.

• Read blogs for more information, see what others are saying about the market. You have to know what your competition is up to and what better way to learn than to read about their thoughts

• Start a blog and of course add video. Write about neighborhoods, your listings, interactions with agents, clients, trends, your services, how’s the market?

• Set your personal business standard and stick to it. Write the personal notes, make the phone calls, stop by and visit your past clients or meet new ones and track your daily conversations.

• Hold open houses on the right houses

• Track your business, determine what gives you the best results and do more of it.