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The latest headlines from the national media have caused a little confusion in the marketplace. Of course, the headline doesn’t tell the whole story (see this one for 2017ytdjanpendingsnvaexample: http://www.cnbc.com/2017/02/27/pending-home-sales-drop-to-lowest-in-a-year-down-in-january.html). And keep in mind…

NEVER MAKE A LOCAL DECISION BASED ON NATIONAL NEWS!

In the DC market, the pendings are NOT down. In fact, year to date in Northern Virginia – pending sales are up for the year +15.8%) , for January (+18.3%) and MTD for February (+14%), according to data from the local multiple listing service.
It’s a strong market in N. Virginia even though the inventory has shrunk since last year, sellers are finding multiple offers in some cases, and buyers have continued enjoying affordable interest rates.

 

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.

The Spring season has started! Following the 2009/2010 blizzards that hit the Mid-Atlantic region, buyers have come out with a vengeance. We’ve been processing a contract or listing a day in the office and there are no signs of stopping. As I reported last month, prices across the Northern Virginia (D.C. suburb) area have turned around. For December, the average sales price jumped 12 percent compared to December 2008.

Now, buyers and sellers alike are focusing on the Expanded Home Buyer Tax Credit passed by Congress Nov. 6, 2009. The expanded CREDIT (not deduction!) provides cash benefits to first-time buyers and to homeowners who are purchasing a second primary home.

First-time buyers are classified as purchasers who have not owned a home in the last three years; repeat buyers are those who have owned within three years or currently own a home and are moving into another home that will be their primary residence. For doing this, either person, if they qualify, can apply for tax credits (up to $6,500 for repeat buyers; $8,000 for first-time buyers).

These tax credits mean cash in the buyer’s pocket. The credit is applied to your tax bill as if you had actually paid it to Uncle Sam. Then it either comes back to you with a lower tax bill for the tax credit amount, or in the form of a check from the U.S. Treasury. The reason for these generous credits is that the federal government figures most home buyers will spend the money on the house – paint, carpet, windows, doors, appliances – thus creating product demand, and thus creating jobs.

The market is lining up to be a perfect storm for buyers and sellers in Northern Virginia:

  • price appreciation (the bottom of the market is passed);
  • historically low interest rates (in the 5% range);
  • tax credits to help fix up your home (up to $8,000).

So What? What does that mean to you? Here’s the catch – you must have a ratified contract by April 30, 2010 and settle on your new home by June 30, 2010. If you’ve been looking to buy a home before prices escalate, with cheap money and get back money from Uncle Sam – now is the time.

As we look at the 2009 real estate market recovery in Northern Virginia, there are various indicators to pull out to demonstrate how hot the market has turned here. The first item to watch is the pending sales. (I know many people want to look at pricing, but the problem with watching pricing is you never know where the bottom is until it bounces back up!)

Pending sales let you know buyers believe prices have hit bottom and are starting to jump off the fence. As pending sales (contracts written) pick up speed, the number of closed sales follow suit. Once sales surpass year-over-year percentages, the media starts jumping on board, officially announcing the market has turned.  Well – we saw the turn last fall (nearly a year ago) and all the numbers have been in a positive run since.

Next – I reported that inventory was hitting lows that would result in higher prices. And that’s exactly what happened. In my last issue of Around Town, I shared with you how the average prices have been moving up now for 7 consecutive months– well, that’s now 8 months straight for the whole region. And that brings us to the final indicator of a turning market, and that would be the Days on Market.

As of July 2009, the average days on market (DOM) for houses sold in Northern Virginia has hit the 60-day mark. The significance of 60 days is that it is half the time it took (120 days) to sell a house at the height of the buyers market, which was in January 2008 (see the chart on the flipside of this newsletter).

So what? What does this mean to you? Well – it doesn’t take much to figure out what’s happening here. Prices hit the bottom for buyers, buyers jumped off the fence, inventory dropped, prices are moving upward and now more buyers are jumping in droves, dipping the time on market.

We are selling more and more regular sales these days – non-foreclosure – and that means regular sellers are moving up to the larger, more updated home since they have plenty of first-timers and move-up buyers in line to buy their home for a profit. The market is tightening up!

Make your move now while there is still plenty of higher-priced inventory available.

I was looking over the supply of houses on the market this week in Fairfax County, Virginia and it’s really getting dangerously low. Compared to May of 2008, we have 55% fewer homes on the market – and 20% more contracts written on them.

That leaves home buyers with only a 7-week supply of houses and it’s getting smaller. Officially – we’re in a sellers’ market. For pocket markets (townships, subdivisions, etc.) it’s as hot a market as it was in the peek of 2005-2006 – it’s just that the prices are much lower. Ergo – the opportunity. If you’ve ever heard about buy low, sell high – now is the time to buy low.

The same is true across the country. Pending sales are up all over Florida, in Seattle, Phoenix, Los Angeles, Las Vegas, you name it, and buyers are coming off the fence like they were stung by a bumble bee!

For a macro look at how this can benefit you – consider the suburban Washington DC market of Fairfax Countty. If you are sitting in a house purchased in 2000 or earlier, you’re most likely sitting on a lot of equity that could enable you to move up to a larger home with the upgrades you’ve wanted but couldn’t afford.

I know – this sounds like a sales pitch – but frankly – it’s just the simple truth. Sellers and buyers have a unique opportunity to purchase a house at prices that have been backed up several years and at interest rates not seen for decades (currently in the mid-5% range).

In fact – we haven’t seen these kind of rates since they’ve been tracking them at Freddie Mac (http://www.freddiemac.com/pmms/pmms30.htm).

The average price of a 4BR, 2BA house in Springfield, VA, for instance, sold for $235,665 10 years ago. Today, that same house sells at $371,549. While this price is down from the last five recent years, the pricing has leveled and starting to rise in pocket markets throughout Northern Virginia.

And if you’re wondering if the market has turned around consider this – the average days on market for that house in Springfield is down to 18 days. That is not a misprint – NOT 180 Days, but 18 Days – a little over 2 weeks. Many other towns in the area are in the same situation.

So what?

  • Inventory is beginning its dip downward because buyers are coming off the fence, the foreclosure rate in the Northern Virginia area has been cut nearly in half (see www.CRA-GMU.org) and
  • Regular owners have not yet decided to place their homes on the market yet.
  • We are experiencing multiple offers (7 – 10 is not unusual, we’ve seen upwards to 35)
  • Escalation offers are back – one of my team members lost a bid after escalating $75,000!

Just remember DON’T MAKE A LOCAL DECISION BASED ON NATIONAL INFORMATION!

Finally — it’s not just me. Forbes magazine is letting its readers know that the DC market is on the upswing. Take a look at the link above for the Top 10 as rated by Forbes.com

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/.

by M. Anthony Carr

I’ve had several friends come up to me in the last few weeks and ask: “Is this a good time to sell my house?” or “Is this a good time to buy a house?” Let me preface my 700-word answer with this: If nobody panics, we’ll all get out of this alive.


Many readers have accused me of being too optimistic on the real estate market. What they see as optimistic is actually an attitude steeped in the belief that you can make money in real estate in any market, you just have to know how to operate when the market’s moving up, leveling off, or cooling down.

When prices are up — sell. When prices are leveling or dropping — buy (or sell). When rents are moving up, don’t play Mr. Charity, raise your rents. When you enter this field of real estate as a wealth-building business investment, that’s exactly how you have to treat it — like a business.

When the market shifts, that’s okay if you’re looking at the market as a way of making money and building wealth. So last week when I read some reports from federal agencies that appreciation had slowed, I didn’t panic with many of the market prognosticators, I just shifted my business plan. Real estate investors and property owners can make money in any market, you just have to be wise on the market and be flexible on how much profit you want to make.

Consumers are definitely confused on whether they should buy a piece of property when many numbers are pointing at a housing market that is slipping in prices. Today’s tip is to approach it from a non-emotional business perspective. Watch these segments of the economy in your local area to determine if you should buy in your market:

A – The local economy

What’s happening? Are jobs growing? Are businesses opening? Are current businesses investing in themselves? What are the economists saying in your area? Research this data by a simple Google or Yahoo search of “economic report.” Through that search, the astute investor will find out where economists are predicting growth in suburban business centers and where the jobs are coming and going.

Forget what you’re hearing nationally and look for the growth on the local level — where you want to buy a house. Just like politics, real estate is local, which moves us to B.

B – The local real estate market

What’s happening? Are prices booming, leveling or slipping? This has to be researched on various levels. Start on the state level, drill it down to your county and then get a granular look at the zip code and community level.

These numbers can easily be found through your local Realtor association. For a list from across the country, start at Realtor.com and click the links to local real estate associations at the bottom of the page. Most local associations (definitely state groups) keep a public area on their web pages with local statistics on the number of homes sold, sales prices and year-to-year appreciation.

Look up government information as well on job growth, economic plans and forecasts. If the state and county governments are playing their role appropriately, they’re creating jobs AND allowing development of housing to house the workers who come along for those jobs.

If they haven’t come up with the latter, then you might have a good investment opportunity on your hands. More jobs and fewer houses spell lower supply and high demand, meaning equity growth and high rents.

And don’t forget the rental market. Is it growing? Are there a lot of vacancies? How much are the rents going up? Down? If rents are up, then you may be able to cover your monthly expenses. If they’re dropping, it could be because the location is down economically or because housing is so affordable (but appreciating) that renters are getting out of the rent track and buying a house instead.

C – The financial market

This market is actually the only real estate component that is usually measured on a national basis. It’s all about the cost of money and most interest rates are within a basis point or two from each other nationwide. Currently, they are still historically low (under 7 percent) which can be had for 1 or less points.

If you find that A is chugging along, B is still affordable and C is also affordable — then buy, buy, buy. A strong economy with a growing real estate market and strong rates, means you can buy a house for relatively little money down as an investor, put a renter in the house and obtain it with cheap money that the rent will pay for.

If you find you’re in a positive A situation, but B is unaffordable and C is still affordable, then you may need to wait or jump in the flow before B gets even more unaffordable.
If A is great, B is leveling and C is still affordable, and A looks like it’s going to keep growing — then buy while you can, because B is going to move up right after the break.

Finally, get a team together to help you analyze the data you’ve just researched. Are the prices trending upward? (And is that really a good thing right now?) Or are the prices dipping, meaning I should get in while I can because the jobs are coming? Work with your agent, lender and accountant to figure how the market can help you with your wealth-building goals.

Published: October 13, 2006

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