real estate market

Prince William Listing Exchange

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Jason Smith’s comments:

Inventory levels up slightly but everything else is staying steady so the market is going strong!  We are just under a 2 month supply of houses in

Prince William County.  The active inventory has 36% of the market as distressed sales.  Nationally, inventory levels are up 7.6% in July – here we are down – houses continue to sell which is great news for us.  There was a home with 20 contracts on it in Piedmont priced under $350,000.  It is still a very competitive environment for us in the first time buyer price range.  New construction activity is up as well and KB Homes is coming back to our area – stay tuned on where as we haven’t heard yet.

Loan modifications aren’t working with a majority of the lenders – anywhere.  The push to modify from the government hasn’t yielded results from what we’ve heard. 

There are very few FSBO’s on the market as well.  Auction activity only showed 3 houses on the “block” in October – other auctions previously featured 100’s of houses…the tide is changing – inventory is getting absorbed prior to auction.

Scott’s comments:

Career Night, September 24th: Bring an agent and get into a drawing for a designation and your guest agent gets thrown into a separate drawing for a designation at the end of the night. We’d love for you to invite those agents that would be a great fit for our company.

Business planning retreat…Pat Cunningham is one of our wonderful sponsors. Friday starts with golf, spa, cocktail party, and business planning starts on Saturday. It’s going to be a different format this year  with tons of interaction to help jump start your 2010!  The location is easy to get to and it’s a beautiful resort – the Hyatt in Cambridge  be sure to sign up today.

In today’s Market Watch, our monthly market update you will see that there is not much to talk about this month. For the first time in a long time, there is nothing earth shattering. It’s been relatively quiet.  There is nothing new that we need to be concerned about – yet.  There is a lot coming down the pike so stay tuned.  So what’s next?  Is the loan limit going to stay $729,750 or is going to be cut back to revert back to $629,650. Is the first time buyer tax credit going to be extended or will it go away?   When are rates going to go up and how high? When is the government going to dismiss the FED’s advice to continue to purchase mortgage backed securities.   If inventory levels go up by a thousand houses – BOA foreclosures in

Northern Virginia – it’s not going to affect the market too drastically.

Right now we are at May of 2005 inventory levels.  We need more homes to sell!

Pat Cunningham agrees that there is not much has been going on the mortgage front.   Rates are awesome – ARM’s are coming more into favor because of better education and lower start rates.

A year ago I remember the mid September of last year and we were literally in a financial firestorm and one of the things I was thinking then is about the fact that that Fannie & Freddie were going out of the business and lending institution having a hard time making loan and wondering if there will there be a credit freeze.

Let’s fast forward to today, its business as usual. We’ve gotten out of the toughest financial market of our time.  Interest rates are at historic lows.  PMI may require anti-flipping rules to be enforced and will be scrutinized heavily on 91-120 days be on the lookout for changes in this arena.

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Converstations on Shorts sales, HERA with Ed Dean with Potomac Mortgage Group

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The shorts sales continue to rear their ugly head. Our agents continue to have problems with the time spent working on them, the energy devoted to them and the lack of results they are getting out of them.  It appears now that many of the banks have gone to call centers handling the shorts sale calls for the banks and these people have no training no experience, but more importantly no authority to make decisions on whether or not to approve or disapprove a short sale. 

Enough of short sales, now onto the mortgage news…

This week the head of FHA, Dave Stevens, made the announcement that FHA will not be going the way of HVCC because he is a wise man and recognizes the inherent problem associated with the HVCC.  Great news for all of us in this regard!

In a recent conversation with Ed Dean, we were further educated on the new TIL reforms and told us that 10 days is a reasonable amount of time to get a loan to close, you would have to move heaven and earth to get a loan done in 7 days (it can be done, but it’s not recommended), but his belief is that it is not going to have as much of an impact as many people are indicating. Check out his notes on the subject from our conversation.  Ed did a review of 5,000 loans that his former mortgage company had done and noted that only 30 of those loans would have needed re-disclosure. A majority of those 30 needed re-disclosure as a result of people failing to lock in their interest rate or it was initially a pre-qualification and it went to contract several months later. You’ll note at the bottom of page 3 of his notes, how significantly the numbers need to change to get a re-disclosure.

Other mortgage news included guidelines continue to get tougher on condos with more restrictions imposed. In addition it has become virtually standard operating procedure for every lender to pull the Form 4506 from the IRS to request the borrower’s tax returns to make sure they match the ones they provided in the loan application process. Basically with the way the loans are going today, you have to fit inside the box. There is no thinking outside, underwriting or loans being approved outside the box. And lastly, second trusts continue to have no future or part of the mortgage or sales landscape.

As is always we strive to keep you educated in the real estate world.  Get it? Got it? Good!

Platinum Club….another great meeting!

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Another Platinum Club meeting, another short sale discussion meeting, when will the madness end?  My short answer is, when the government steps in and does something GOOD for our industry and gets banks to streamline and systemize the short sale process.

A few observations from today’s meeting include:  the processor makes all the difference in short sales, not the bank; as the foreclosures diminish, REO managers are migrating to Loss Mitigation departments – too early to tell if this will work better or not but us being optimists in this group, believe it will; despite what others say, make calls on your cases everyday – the squeaky wheel gets the grease.  The belief is that short sale departments are small – not big like everyone may think – in one case, one processor is handling 5 cases for one of the agents; everyone in the chain is overworked – negotiator, processor, and listing agent – much of the paperwork is lost in the process; the deals continue to get more difficult and take longer – one agent lost 6 deals in the last month; if the bank knows the property is vacant, it will speed up the foreclosure process;  the short sale part of the business has made agents more suspicious of each other – no MLS updates or incorrect/unauthorized status changes, unprofessional and/or unethical processes are instituted by many agents – they have clients ratify multiple contracts, and releasing contracts & accepting others without bank rejection of first contract is becoming more commonplace are just a few examples of what is taking place in our market;  only about 23% of short sales are making it to closing due to bank rejection, banks asking for notes from mortgagor, and the time it takes to get them to close today that buyers are releasing themselves from the contract.  From the listing side, to get better success, have buyers remove all contingencies prior to submitting the offer – it is easy to do in multiple contract situations and gets buyer buy in – provide title work, your own BPO, and mock HUD 1 with the offer, don’t wait on these procedures.

Additional discussions covered foreclosures.  There isn’t much happening on the foreclosure front.  The promise of the flood of foreclosures coming on the market is continuing to be delayed – bring it on is what we say as our inventory level is down 56% from the same time last year and the most competitive market is in the first time buyer price range where many of the supposed foreclosures will be priced.  We can sell’em if they list’em.  Listing assignments are down 75% from last year.  BPO’s are up – suspect they are for short sales – not for potential bank inventory.  Last year 1 BPO for every 5 listings obtained, this year it is the opposite, 1 listing for every 5 BPO’s.

Many markets are still extremely price sensitive – even when they are priced just a little high.  When priced right, in the right condition and show well – they sell.  Get it?  Got it?  Good!

Now, go sell something!

We’re moving on up!

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It is true!  The housing market is making its comeback.  Last week we reported sales of existing homes rose 3 consecutive months and that new home sales were up in June over 3%.  Well, guess what?  New home sales were up 11% in July!   This is more great news for us to “build” upon moving into the dog days of summer. 

What is the reason for this growth?  There are several factors in my opinion:  low rates, the right price point, multiple offers on existing homes, the tax credit and the market conditions.  As we all know, rates have been low for an extended period of time and according to Ben Bernanke in his economic update, they are going to remain low as a strategy to aid in our economy’s recovery.  Builders, banks and home owners alike have been reducing prices to encourage offers – well, it appears that the sale of the century for housing has worked and buyers are coming out of the woodwork.  As these buyers are making offers on resale properties and losing out to other buyers, the frustration has lead them to new homes – no multiple offers on to be builts!  As the tax credit has aided in getting first time buyers off the fence, it has also spurred activity in the move up market which is resulting in the increase in new home sales as well.  And lastly, the market has been decreasing for over 4 years – June or July of 2005 is when we earmarked the down turn in housing.  Additionally, as we all know, what goes up must come down and vice versa so it was about time for the market to change.  You can’t keep a good thing down.

The housing recovery is critical in so many ways to the general economy’s recovery – let’s keep the momentum moving in a positive direction by spreading the word.  Get it?  Got it?  Good!