Market Trends

Summertime market…it’s gonna be fun!

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The spring real estate market is hopping along as we enter the summertime “fun in the sun” buying and selling season.  Our inventory levels remain very low for this time of year – we actually have seen inventory levels on the decline in recent weeks.  Multiple contract situations are more the norm than the anomaly, which can be frustrating for buyers.  Prices have stabilized but we need to see them increase to help out people in the area that are still underwater with their house values.  Although we have people still underwater on their houses, distressed property inventory remains very low – only 11% of all inventory consists of short sales and foreclosures.

The big news this month seems to be the rise in consumer confidence in our area compared with the rest of the country.  My feeling is people are becoming more optimistic in Northern Virginia because we have jobs and our housing market is strong.  We have a 1.5 month’s supply of resale properties and a 1.1 month’s supply of rental properties.  People are not only out looking at properties but they are actually buying houses.  Agents are working hard and diligently working on listings and contracts.  The environment around the office is fast paced and optimistic as the agents are busy helping our clients buy and sell houses.  Our lenders and title partners are expressing a lot of the same sentiments with the market and its activity.  In addition, there is a lot of “good” publicity surrounding the real estate market which is a welcomed reprieve from the last several years of nothing but negative news.  All of this information will propel us into the summertime selling season so if you are looking at your options with real estate, give us a call.

Is the spring market coming?

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In Northern Virginia our inventory levels of active resale homes for sale continues to decline.  We are down to just over 4,600 homes on the market and we have a 1.8 month supply of homes.  Houses that went under contract the last 7 days hit a 6 month high this past week.  In a nutshell, houses are selling.  Why is this happening?   Interest rates hit another record low, we are creating jobs here, rental rates are increasing and our population is growing putting more demand on housing.

Last week I was asked when will we see the spring market or in other words, when will more houses be coming on the market?  Some people say when the banks start releasing foreclosures, some say mid-March, and some say when their price rise.  Let’s analyze each of these responses.

So far we have not seen the foreclosures hit the market and as a matter of record, the inventory has actually decreased to a 6 month low with only 311 currently for sale.  In addition, “Notice of Trustee sales” published have actually remained very low as well averaging only 3 pages per day versus substantially higher numbers in 2008-2010. Lastly, I started tracking short sale inventory just over 2 years ago and we are at an all-time low in this area as well – only 651 are for sale in Northern Virginia.

As far as the inventory levels increasing in mid-March, only time will tell but several agents have indicated they have houses in the process of being prepared to go on the market around this timeframe.  If they are not only preparing them for sale but are going to price them accordingly, they will sell.  Two properties we listed on Friday received multiple offers because they were price properly and in the right condition.  And now for the statement, “when my price increases, I will sell” is a tougher one to answer for many people.  Rise compared to what?  When they were purchased?  Compared to 2004-2007 prices?  Compared with the last sale in their neighborhood?  Until these questions can be answered, we can’t help them.

We continue to have one of the best real estate markets in the country and it will be this way for the foreseeable future.  Please feel free to contact us to learn more about how this market affects you and your situation.

Got to love great real estate minds….

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Wow, what Platinum Group today.  Agents are feisty, fed up and frustrated with lenders.  Issues were flying across the conference room fast and furious.  The question was asked – How’s the market?  Here is what came about – Financing problems are prevalent.  Some owner problems by not disclosing full details – not telling agent about businesses, tax situations or other properties owned.  But most seem to be lender problems – mainly, not telling the truth.  One lender didn’t tell the agent the Visa expired, said application was in all paperwork submitted and nothing was turned in – contract and lender letter said conventional then switched to FHA at appraisal time.  Lending guidelines are too strict, lenders are too ambiguous and regulations need to be relaxed to make well qualified, legitimate buyers home owners.  We are held accountable to performing at a higher standard and the lenders are not – it is a huge problem!  Lenders need to adhere to a business standard – develop one, make them sign it and if the lender doesn’t, don’t use them.  They have no skin in the game, no accountability and no repercussions.

Agents have buyers coming out of their ears.  Listings are being shown but there doesn’t seem to be any sense of urgency from the buyers.  Move up buyers seem to be lurking out in the market as well.

What prices are selling?  The lower price points are selling – mid price points are coming down and languishing on the market.  Prices are up year over year but are dropping month to month since July.  Keep an eye on this trend through the winter.  Prepare sellers to price competitively from the beginning or the house may not sell or you will end up chasing the market.

Are foreclosures coming?  Agents are not doing BPO’s, short sales are down, and notice of trustee sales in the papers is down so the answer is not now.  Asset managers don’t have any idea of what is coming down the road either.

How are short sales progressing?  One has been in process 2.5 years – has had 6 contracts and still not approved – it is a Bank of America deal…no surprise.   We had one agent had 3 short sales drop out last week.  Another one has 10 under contract and they are languishing on the market.

Is the loan limit reduction hurting your business?  It has had only a limited effect on the agents in the group.  Only one deal has had an impact with 10 agents and multiple transactions in process.

Agent’s years are about the same as last year.  Their volume is up but units are down but overall, income will be the same – we will see how the loan limit reduction will affect us next year.  How will 2012 be for you?  Spring is going to be strong.

All the agents agreed that this was one of the best meetings we have had which is great.  The energy was high, there was lots of passion and everyone left with enthusiasm.

Now, go sell something.

Top 5 Tips for Securing an Accurate Appraisal

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When it comes to buying or selling property, a successful outcome often hinges
upon an accurate appraisal. Unfortunately, due to unrest in the appraisal
industry sparked by government guidelines imposed by the Home Valuation Code of
Conduct (HVCC), securing an accurate appraisal can be hard to come by these
days. Colleagues have shared many a horror story about an appraisal gone wrong
and a client that’s left to pay the price.

As a member of the Top 5 in Real Estate Network®, however, I have learned that
there are steps you can take to help ensure an appraisal accurately reflects
the home’s value. Consider the following advice:

1. Keep it local. Inaccurate
appraisals are often the result of the current practice of using an appraiser
who is unfamiliar with your community…sometimes, they’re even coming from
another state! Talk to your agent and/or lender and insist that the appraiser
involved is local and, therefore, understands home values in your neighborhood.

2. Utilize comps.
Make sure your lender and appraiser are accurately leveraging comps (comparable
market sales) of local properties sold within the last six months to help
appraise your home. Your real estate agent can help in this area.

3. Put your best foot
forward. If you are selling your home, make sure it’s in the
best possible shape before the appraiser visit. Invest in any necessary repairs
and effective cosmetic changes. Consider how your home stacks up against other
homes in your neighborhood and let that be your guide.

4. Review carefully. Review
the appraisal thoroughly to make sure all the basic facts are correct: square
footage, features of the home, number of rooms, etc. If you find mistakes, call
the appraiser and ask to have them corrected. If the appraiser refuses to make
the corrections, file a complaint with your state’s real estate appraisal
board.

5. Don’t settle. You
are not bound to accept the appraisal results. Both buyers and sellers can
request a new appraisal. There is no guarantee that the bank will accept the
new appraisal, but it can be used to challenge the first appraisal.

An honest, accurate appraisal can make all the difference in your real estate
transaction. Follow the above steps and please e-mail
me for more details. I encourage you to forward this important information
to your social network, as well.

Looking to Buy a ‘Fixer-Upper’? The 203k Program Can Help Make It Happen

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Today’s real estate market presents a lot of opportunity for interested home
buyers—with the growing supply of foreclosure properties and short sales, there
are certainly some great deals to be had.

The problem in buying a “distressed” property, however, is that these homes are
often damaged due to lack of maintenance or prolonged vacancy. So while the
price tag might be right, the investment necessary to make the home livable
might just push buyers well beyond their budgets.

As a member of the Top 5 in Real Estate Network®, however, I have access to the
latest information on mortgage and financing options. One particular option
that is providing hope for many of today’s home buyers is HUD’s FHA 203k
program, a loan that enables buyers to not only secure a mortgage, but receive
the funds necessary to improve the home as well.

Here
are five facts about the 203k program to help you determine if it might be the
right fit for you:

1. The
FHA Section 203k program was originally introduced by HUD
in 1978 as a program to rehabilitate and repair single-family homes. The 203k
is a single mortgage loan that provides funds to purchase a home and make
repairs and improvements. A simpler version, the Streamline 203k, was
introduced in 2005. This version offers less documentation and lower loan fees
for renovations that don’t exceed $35,000.

2. In
today’s market, conventional financing, which often requires
20% – 25% down on a home and a perfect credit score, is often hard to come by.
However, with less-than-perfect credit and as little as 3.5% down, you can get
an FHA loan, such as the 203k.

3. The
203k approval process is a little more complicated than a
conventional loan. For example, you’re required to secure renovation costs from
an established, licensed contractor and deliver a package of the proper
paperwork to the lender to secure FHA approval. Make sure you work with an
agent—like a member of Top 5—who is well-versed in the 203k program, or who can
connect you with a lender that is.

4. The
203k loan is not just for foreclosure or distressed properties.
More than 80% of the homes in America were built before 1990—that’s over 100
million homes that are 20 years old or older—and almost every one is in need of
some amount of repair and updating. The 203k loan, therefore, offers advantages
for almost any home purchase.

5. The
203k loan is not just for home purchases but can be used to
finance a home improvement, as well!

For complete details on the HUD 203k program, you can visit www.fhainfo.com/fha203k.htm.
Please feel free to leave a comment or e-mail
me, since this information can be hard to digest and confusing.

Be Careful What You Read

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The Northern Virginia real estate market remains strong for
both buyers and sellers.  Although
inventory levels have increased slightly over the last few weeks – more houses
are selling as well!  Our absorption rate
remains steady at a 1.8 month supply of houses! 

Be careful what you read. 
In a recent article, it was noted by Fox
Business that new homes sales had dropped to record lows.  In our area, builders are seeing robust sales
and tremendous activity.  We have said it
before and will continue to say that we are in the best real estate market in
the nation – take what you see and what you hear about real estate with a grain
of salt because we are different and good news doesn’t sell!  We put a condo on the market in Manassas on Friday of last week and it was sold by Sunday –
the market is HOT!

For the best in real estate advice and news, please call us
to hear the true information about our market. 
We want our clients to be the most informed and up to date with our
local housing market.  We have the most
current stats, data and information on financing as well as the home buyer tax credit and
how it can affect you so feel free to call today!  We are here to help.  The Results Realty Group – 703-652-5777.

Shopping for a Condo? Ask These 4 Questions before You Buy

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Condominium homes have always been, and will likely
always be, an efficient and economical route to becoming a first-time
homeowner. They can offer the comfort, prestige, and even luxury appointments
that apartment living may lack, often at a cost that is not much different than
rent. With the current first-time home buyer tax credit and the deadline for
the move-up tax credit fast approaching, I advise you move fast on any condo
purchase you may be considering.


With my experience as Member of the Top 5 in Real Estate Network®, I am well
aware that not all condominiums are the same, however, so make sure you ask the
following four questions before you buy:

What will you own?
Read the bylaws and be sure you understand what you will be responsible for and
what belongs to the condo association. Will you own the boat dock at the back
of your unit? Can you elect to build a spa on your patio? Generally, unit owners
own and are responsible for the interior of their condos, while costs for
outside maintenance including common areas and sewer lines are the
association’s responsibility.

Who lives there?
Are the majority of residents owners or renters? Owners generally take more
interest in proper maintenance and are more willing than renters to serve on
the association board and enforce complex rules and regulations–including the
regular collection of homeowner dues.

How effective is
the homeowner’s association? Do they have legal counsel,
reasonable funds and a capable, caring volunteer board? One way to judge is to
check with residents about restrictions, oversight and timeliness of repairs
and upgrades. Another is to take a hard look at the grounds and be wary of
signs of neglect.

What about special
assessments? The association should have the power to special
assess for needed, one-time large expenditures. Otherwise, things that need to
be done may never get done at all, leaving the complex vulnerable to disrepair
and lowered property values.


Don’t miss this great opportunity to become a homeowner or to downsize by
buying a condo (remember, the move-up tax credit does not require you to move
to a larger or more expensive home).

Notes from Scott’s Desk

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There are houses selling…2 contracts per listing of late – and
in different price points, $250,000 and $850,000.  The contracts came in close to list price even
though they were in competition.

Some agents like Equator, the new Bank of America short sale
portal – because of their quick responses and live chat, but some still have
repeated problems with acceptance of forms in particular formats.  Once in the final stage of approval, it takes
about 6 weeks to close, and they take precautions to stave off foreclosure.

Ask for 90 day short sale contingency approval – don’t pull
contract in final stages of negotiation, swap out contracts with same terms to
keep the ball rolling – you don’t want to have to go back to the beginning.

Short sale listings are finding agents – agents aren’t
pursuing them as much, they are just coming in.

Go back to database – reach out and talk to your people to
grow your business.  We are in a
relationship business – build those relationships deeper and your success will
follow. 

What will happen at the end of April when the tax credit is
gone?  No, what will happen at the end of
March when the Fed stops buying MBS?  The
market will slow…buyers will be back on the fence…financing is tough enough –
hopefully the restrictions on obtaining financing won’t get any worse…rates
will increase – buyers will drop out of market – will prices drop?  Message to send out: look at the positive
side of things…rates are great, inventory is available, prices remain low, we
know what loan programs are available…we need to list out true picture of the
market, it’s our job.

How do properties not listed as short sales end up in hands
of investors prior to courthouse steps?  Are
these investors negotiating directly with the seller or going to the trustee at
the steps or are they going directly to the bank?  This is a question our group would like to
know the answer too.

Appraisers are asking to have snow removed from the roofs of
properties…appraisals are coming in low…fewer sales make appraisals a problem
this time of year…appraisers aren’t going into the house in some cases…on FHA
loans, the lender has the option of using the first appraisal or ordering a
second one, if you are caught in a low appraisal situation with FHA loans on
your listings, switch lenders…

Housing starts rise in January 2.8% – RISMEDIA, February 22,
2010—Nationwide housing production hit its strongest pace in the last six
months this January, posting a 2.8% gain to a seasonally adjusted annual rate
of 591,000 units, according to figures recently released by the U.S. Commerce
Department.

According to the latest indexes (Zillow and the Feds “flow
of funds report) negative owner equity has dropped as prices have begun to
increase and between the 1st and 3rd quarters last year,
home equity rose by $1 trillion as a combination of increased home values and
principal pay down.  Although this news
was good for a lot of the country, the sand states (FL, AZ, NM & CA)
continue to be viewed as a high risk factor.

Josh Burruss of Potomac Mortgage Group mentioned the
upcoming FHA financing changes and dates to keep in mind to create buyer
urgency.

The following are some images from our monthly Real Estate Exchange in Gainesville. 

IMG_7864

IMG_7866 

IMG_7869     IMG_7872 

IMG_7877     IMG_7878

 

Why Northern VA is the Place to Be in Real Estate

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Northern
Virginia is fortunate to have the fundamentals to be one of the top real estate
markets in the country.  Residential real
estate prices in the area had declined considerably in many areas over the past
few years but have likely bottomed in 2009. 
The demand for real estate in Northern Virginia continues to be on the
rise because of the strong job markets of Washington, D.C. and the surrounding
areas.  Many new corporate headquarters such
as the offices of Northrop Grumman, SAID, Volkswagen, Hilton and Merck have
recently moved to Northern Virginia bringing thousands of families to the
suburbs.  Contributing to the demand for
residential real estate in Northern Virginia are the many students and faculty
of several Colleges and Universities in the area, including; George Mason
University, Marymount University, Northern Virginia Community College and the
graduate and part-time student satellite campuses of Virginia Tech and the
University of Virginia.

Now
is a favorable time to invest in real estate in Northern Virginia.  Property values are affordable relative to
recent years and are expected to rise over the next several years as jobs
continue to be created here locally. 
Additionally, mortgage interest rates are near all time lows which
enable investors to capture higher returns on their investments.  Inventory numbers are down as more homes are
selling than are going on the market. 
The inventory levels are down this week 54% from the same week last year
and are down 70% from two years ago.  New
construction home builders are also reporting increased activity and sales in
recent months.  There is currently only a
2.5 month supply of homes in all of Fairfax County, Loudoun County, Prince
William County, Arlington County, Fauquier County, Alexandria City, Fairfax
City, Falls Church City, Manassas City and Manassas Park.  For rental properties in these areas, there
is only a 2.1 month supply which adds to the housing demand.

In
a recent Forbes article it was also noted that the premium for rent versus
mortgage payments helps determine when an area is determined to be a good
buying opportunity – well here is an excerpt from this article: 

For
people who want to own a home, the premium to buy—the spread between what
they’d spend to rent and what they’d pay for a mortgage—is much lower than the
15-year average in many cities.

To determine what
cities are smart buys, Forbes magazine computed the premium and also identified
locales where economists predict home prices will go up the most over the next
five years.

Here are the top
10 cities the magazine chose as the best places to buy right now.

  1. Boston-Cambridge-Quincy, Mass.
  2. Charlotte-Gastonia-Concord,
    N.C.-S.C.
  3. Chicago-Naperville-Joliet,
    Ill.-Ind.-Wis.
  4. Cincinnati-Middletown,
    Ohio-Ky.-Ind.
  5. Denver-Aurora-Broomfield, Colo
  6. Minneapolis-St. Paul-Bloomington,
    Minn.-Wis.
  7. Philadelphia-Camden-Wilmington,
    Pa.-N.J.-Del.-Md.
  8. Portland-Vancouver-Beaverton,
    Ore.-Wash.
  9. San Francisco-Oakland-Fremont,
    Calif.
  10. Washington-Arlington-Alexandria,
    D.C.-Va.-Md.-W.V.

 

As
a “Top Ten City”, we are even more encouraged to recommend buying in Northern
Virginia.

Two
particularly “hot” areas of expected property value increase over the next few
years are the neighborhoods of Herndon which are located within a two mile
radius of the future Herndon-Monroe stop on the Silver Line of the Metro and
the neighborhoods of Dumfries which are in close proximity to Fort
Belvoir.  The current Silver Line project
was secured by federal funding in December 2008 and will be completed in two
phases between 2013 and 2016.  With easy
access to public transportation, there will be more demand for housing in
Herndon.  In 2005, the Defense Department
announced that it would be shifting 18,000 jobs to Fort Belvoir.  This increase in jobs will cause more of a
demand for rental properties which, in turn, will keep inventory rates down, force
rental prices up and property values to rise.

We
believe that investors with a long term outlook on real estate will be well
served by investing today in Northern Virginia. 
If you have any additional questions or concerns, feel free to call …