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So what is an absorption rate??

When I’m looking at a market to see if it’s leaning toward buyers, sellers — or neither — I look to the absorption rate. This means how long would it take to deplete the inventory at the rate that homes have gone under contract in the last 30 days. (Huh?) Read the rest of this entry »

The fall of every year has become the “buyers market” season of every real estate year in the past few. While inventory may still be tight in some of our markets in the DC area (the DMV), many purchasers have hibernated, thinking that if they wait till the spring, they’ll be able to have better luck at finding what they want.

Such thinking could cost you a brick of cash. Because = there’s another key component you overlook if you’re just keeping track of inventory as an indicator of when you should buy. It’s the interest rates. It could cost you thousands of dollars per year to wait when you consider where they are right now and what could happen by the spring of 2018.

Here are some simple calculations – if you’re buying a $500,000 house with 5% down at an interest rate of 3.5%, the payment is roughly $2,641 in Fairfax County, VA… When that rate moves up a percent to 4.5%, your cost goes to $2,915. Same house, same taxes – $3288 MORE per year…$16,444 over the next 5 years — more than $30K in 10 years.

Waiting could cost you. The smart buyer stops waiting and get’s in the game! Got a question or need professional help? Contact me here: http://www.anthonycarr.net/contact/. pmms_chart8.17

Okay, Okay – I saw a buncha my Realtor comrades grab a recent report from the BH&J Index – headlined: US Housing Market Moving into “Buy Territory.”

Well, the problem I have with that type of statement is that it treats the whole NATIONAL real estate market like it’s a stock. You know – like Ford, Apple or JC Penney. Well – it’s not. I’ve always said and will continue to stick to this gun – DON’T MAKE A LOCAL REAL ESTATE DECISION BASED ON NATIONAL INFORMATION. Oh, I’m sorry – did my CAP key get caught there?

Seriously, while this “national” index may be pointing to a “buyers” market “across the country,” don’t start writing contracts below asking price in the D.C. market. We currently are under a 1.6 months supply of homes – very hot! You will be a bidder, not a buyer. And don’t underwrite contracts in these other 5 Hot Markets, according to the National Association of Realtors. Until next time!

 

The D.C. housing market has been a shining light in an otherwise tepid economic picture for the region. Home sales prices are set to finish up for 2012 over 2011 — which will be the fourth year in a row that the region has enjoyed value appreciation.

The chart below is for Northern Virginia home prices, which had a high average price of more than $525,000 for the summer and finished December out with more than $518,000. (The average home price includes all housing types – condo, townhouse and single-family).

The December price is only 8.1% below the highest December price on record, which was set in 2005. The tortoise-speed appreciation over the years is actually a very healthy road to recovery, rather than the sky-rocketing fashioned appreciation of the mid-2000s.

Most home sellers and 

Northern Virginia Average Prices 2012buyers have not even noticed the recovery and many buyers are surprised at the level of activity at open houses these days when they visit on a Sunday. (First opens are drawing dozens of visitors these days, instead of t

he usual trickle in open houses of the past).

 

Home sellers can be assured of good traffic and a strong sale if their home is priced appropriately. Buyers are continually blessed with excellent mortgage interest rates.

Give us a call if you need more information about your particular market. We can be reached at Weichert Realtors/McLean at (703) 821-8300.

Home buyers are out in force in Northern Virginia. So far this month, there’s been a 17.4% increase in the number of contracts written compared to the same period January 2012. Nearly 1,000 buyers have put homes under contract in the counties of Fairfax and Arlington, and cities of Alexandria, Fairfax and Falls Church (the close-in burbs of Washington, D.C., for out-of-town readers).

The D.C. market has continued it’s bullish temperament, since Congress came up with its agreement to avoid the fiscal cliff (at least for now).

Image

Pending sales are tracking ahead of January 2012 by 16% for Northern Virginia (Fairfax and Arlington Counties, cities of Alexandria, Fairfax, Falls Church.

Nevertheless, the absorption rate is at spring-like levels, tracking at a 1.64 months supply (meaning that if no more listings were to become active, the current supply of homes would all go under contract in about 7 weeks.)

Job growth in the region, increasing rental rates and low mortgage interest rates are all three creating a perfect storm for the region.

Need help navigating it all? Give us a call at (703) 821-8300 at Weichert Realtors in the McLean/Old Dominion office.

 

 

The good thing about credit scores is that they are merely a snapshot of your credit at a given time. Missed payments, high credit vs. limits, too much credit, et. al., can all be corrected and cleaned up and your credit score return to a new high level.

Tim McLaughlin, senior vice president of Weichert Financial Services, answered a question from one a borrower about why all the good loans (low rates, low/zero point, and even product availability, seem to favor those with good credit 

Here’s his answer to the “five major dings” that affect your credit score:

There are five major “dings” that impact your DCS (Decision Credit Score, or FICO score) the most, some obvious, some not so obvious:

Maxed out credit cards: Doesn’t seem like a big deal in the grand scheme of things, right? Oh, it is: a maxed out credit card can reduce your DCS anywhere from 10 to 45 points, according to Fair Isaacs, a hefty price to pay for accumulating debt.

30 day late mortgage payment: In addition to the late fees, this occurrence adversely impacts your DCS by 60 to 110 points…a whopping impact for being late on your mortgage.

Debt settlement: Also known as debt arbitration or debt negotiation, it is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full. The downside, a 45 to 125 point drop in your DCS.

Foreclosure: Unfortunately, an occurrence we are seeing far too often as of late. In addition to the event, it will reduce your DCS 85 to 160 points.

Bankruptcy: The event that would have the single biggest negative impact on your DCS, reducing your score 130 to 240 points; an almost irreparable event.

In addition, there are dozens of more minor “dings” that could impact your credit score as well; stumble across enough of them and they will really add up, potentially costing you dearly.

For example, following a 30 day late mortgage payment, a consumer with a 720 original DCS could pay as much as $95 more each month on a home mortgage if they were looking to acquire or refinance a new loan (based on a $275K loan amount).”

Thanks Tim. For more information, Tim can be reached at www.weichertfinancial.com.

Virginia Association of RealtorsHere are the basics:

How Much:

  • First Timers: Up to $8,000 (10% of home purchase) but not for anyone buying a house more than $800,000
  • Move Up Seller/Buyer: Up to $6,500

Who?

  • First Timers – meaning you haven’t held title on a property in the previous 3 years.
  • Move up sellers/buyers: who have lived in their homes five consecutive years.

Income Limit:

  • Adjusted gross income of $125,000 (single); or $225,000 (married filing jointly). The credit fades out from these incomes and is elminated for those making more than $145,000 (single); or $245,000 for married filers.

Check out this link from the Virginia Association of Realtors for more details: http://www.varealtor.com/Portals/0/docs/ConsumerInformation/EXTENDED_First-Time_Home_Buyer_Credit_09.pdf

By Tim McLaughlin

According to a report released by CNN this past week, it may be the best time to buy a house in more than four years.

Valuations on home prices (the difference between what a home should cost and its actual price) are the lowest they’ve been since 2004, according to the report.

The Cleveland-based bank National City Corp, together with financial analysis firm Global Insight, revealed Tuesday that more than 88% of the 330 housing markets surveyed showed improved affordability during the last three months of 2007.

“Housing valuations are almost back to long-term norms,” said National City’s chief economist, Richard DeKaser. He called current affordability “the best in the past four years.”

The report compares actual median home prices with what the authors determine are proper home values based on population density, relative income levels and interest rates, as well as historically observed market premiums or discounts, to determine whether markets are over or under valued. The report also factors in market intangibles that make some areas more desirable places to live, and more expensive.

The survey covered home valuations during the last three months of 2007, but DeKaser pointed out there’s reason to believe that valuations are even more favorable for buyers today Interest rates, although they have inched up lately, have been steady or lower compared to late last year, and are certainly lower than historical norms.. There have even been wage gains; personal income rose 0.5% in December.

Takeaways: With the spring market upon us, economists and industry experts appear to be in agreement regarding the current value proposition regarding residential real estate and the strength in buying opportunities vs. any point in the foreseeable past. The home of your dreams in well within reach and more obtainable today than ever before. Fair market prices, affordable interest rates, and the most knowledgeable team of financial consultants can make that dream a reality. At Weichert Financial, with an array of product options and the expertise to assist, we are here to help. What can we do for you? It pays to ask.

Tim McLaughlin is senior vice president of secondary marketing for Weichert Financial Services.

By M. Anthony Carr

I’m in the middle of jury duty. As you approach the courthouse entrance there is obviously a very long line to check in. In a post 9/11 world, those of us in the Washington, D.C. area have become accustom to security forces rifling through our bags, computers and the like for entrance into any public place, including courthouses and ball games. It’s just a matter of life, these days. Yesterday, there were hundreds of us answering the cattle call from the district court. We had to walk through the metal detectors. You know the drill…open your bags, empty your pockets, remove your belt, turn on your computer-pda-cell phone.

As we came through the check-in, there were hundreds of us in line. We passed by signs in various languages directing those with cell phones that have cameras to turn them in to a sheriff’s deputy for safekeeping. No phones with cameras allowed. Period. So by the time anyone got up to the metal detector you have read the signs and there have been plenty of verbal instructions from the security team that phones with cameras must be turned in. The security team was also directing people who were not potential jurors that they may not need to be in the long line, but could use another, shorter entrance to get to court.

So let me set the stage – signs – about 3 x 5 feet big – were hanging in the hallway; deputies (2 – 3 at a time) were constantly giving verbal direction to us all of these instructions. However, you would have been amazed at how many people were “surprised” when they were turned back from the metal detector to the cell-phone station or had their phones confiscated because they didn’t read the signs about the limitations of camera phones. Were they illiterate? No, couldn’t be – otherwise how would they be there with the Juror Summons in their hands? Could they not understand the instructions because of a language barrier – not with what I could observe. Were they just tuning out anything that they had no interest in? Ahhh – that’s what it was. They weren’t paying attention.

The same is happening with those on the side lines of the real estate market.

Let me ask you something – as a buyer or seller are you doing the same thing when it comes to the state of the real estate market? Are you ignoring the signs that are there screaming that now is the time to buy?

Fact: The number of existing homes sold rose 0.4 percent nationally in November. (buyers are out there)

Fact: Month-to-Month prices have stabilized in most markets across the country. (Yes, they are down if you look year to year, but when you want to buy, you want to know when prices have hit bottom, not how much less they’re selling for than last year.)

Fact: Job growth continues (meaning more wealth)

Fact: Population is still growing (more need)

Fact: Interest rates are still at historic lows (cheap money)

Fact: Inventory is dropping steadily across the country (Houses are selling, sellers are taking them off the market, builders aren’t building as many houses)

Fact: Seller are providing buyers with closing costs so that buyers can move in with little or no money down (This is a temporary situation!)

Now let me ask the agents: Are YOU ignoring the signs? Do you see more buyers coming out to opens; more calls at the front desk; discussion coming up in social events…but are you armed to respond? Do you know the message? Do you know where you stand in your market? Can you answer immediately the condition of your individual market? Sales are down 11 percent for the year, but prices are at the same level? Can you say that? If not, you’re not the agent of change necessary to help buyers get the best deal they’re going to get in the next decade.

For more information on real estate investing, resources and news, check out my Commonsense Real Estate Blog at http://commonsenserealestate.blogspot.com/.

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