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I have a plumber in my house fixing a leak that I “thought” I noticed about a week ago. But I let it go. “Naah. It’s not a leak – probably just creekings of a 40-year-old house,” I second thought-ed it. Now – wet floor, carpet and drywall one week later – I realized again – I shouldn’t have waited.

There are plenty of things we shouldn’t wait on. Home maintenance and repair is one of them. Another for real estate professionals is how you treat your business. Work toward the market that’s coming, not in the market you’re in.

We are in a very hot market – low inventory, rising prices, few days on market – sound familiar? The difference this time, though is that there’s no frothing in the market and the appraisers are doing a good job at keeping prices in line. We’re not seeing consistent 10-20% increases in the values.

But – as a professional – work toward the market that’s coming. We know real estate, just like the stock market, runs in cycles. We may be ending this last run-up cycle. For Northern Virginia, we’re still running strong – but that doesn’t mean, keep marketing and working like you’ve been working and marketing the last 10 years.

It’s time to keep your finger on the pulse of pricing even more than before. Watch the inventory closer. Start connecting with your database of relationships consistently and letting them know what’s happening to the market and to their home value.

Note cards, popping by to see folks, and calling them to check in must be a consistent, daily routine for any real estate agent who wants to weather the ups and downs of our industry.

Don’t wait! When you think you should call someone, drop by and see them or send a note – do it!

If you really want to know how a real estate market is going, look at the absorption rate. The absorption rate measures how long it takes to absorb the inventory of homes at the rate houses are going under contract. I.e., if there are 100 homes and 50 go pending in the last 30 days, then that reflects a 2-months supply (100/50=2).

Sellers marketsSlide1 are under 3 months; normal are between 4-5 and anything over 6 is considered a buyers market. The DC market is pretty much a seller market all around. I measure the DC and Northern Virginia counties surrounding DC.

For more graphics, click this link to the RealtyHacks.net Facebook page.

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.

 

Here’s my take on the 2016 Presidential Election. Nothing.

Neither candidate would have250433, has had, would have had or ever will have (just trying to get all the tenses in there) an effect on my business plan to help as many investors, purchasers and sellers with their real estate needs as a real estate professional.

Nevertheless- Read the rest of this entry »

While the Washington, D.C. market has tightened into a sellers market, you may find a good deal in your favorite vacation destination as investors have started moving to second-home buying. Meanwhile, average prices in the D.C. area keep moving up, up, up!

The National Association of Realtors 2013 Investment and Vacation Home Buyer Survey “shows vacation-home sales rose 10.1 percent to 553,000 from 502,000 in 2011.  Investment-home sales declined 2.1 percent to 1.21 million from 1.23 million in 2011, but those sales had been well under a million during the market downturn.  Owner-occupied purchases jumped 17.4 percent to 3.27 million last year from 2.79 million in 2011,” according to www.Realtor.org.

The survey revealed that “11 percent of vacation buyers and 16 percent of investment buyers purchased the property for a family member, friend or relative to use, often for a son or daughter to use while attending school.”

A good number of investors and vacation home buyers also used their cash to invest: “half of investment buyers paid cash in 2012, as did 46 percent of vacation-home buyers.  Forty-seven percent of investment homes purchased in 2012 were distressed homes, as were 35 percent of vacation homes.”

Cash is still a popular means of purchasing even in the higher-end market of Northern Virginia. Buyers in Fairfax County in February 2013 paid all cash 13% of the time in February 2013 according to MRIS.com (the regional multiple listing service for the DC region.)

The median price of a home in Fairfax County was $420,000 in February – up more than 15% year over year. For a complete report for February 2013 sales, click here.

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.

 

 

As you see markets around the country drop inventory and increase pending sales, the question arises – is this for real? Has the market turned around?

In the shadow of Washington, D.C. – you betcha. While some observers may say it’s all about the home buyer tax credit and low interest rates – they haven’t been watching pocket markets around the country.

Northern Virginia is one of those markets that even if you doubled the inventory – it wouldn’t be enough in today’s market environment. Multiple offers (half dozen or more in many cases) are the norm; houses selling above asking price; prices moving up in zip code after zip code, month to month and year over year.

The absorption rate is dropping dramatically. (Absorption rates are measured by dividing the number of pending sales into the number of active inventory – any measurment under 3 months is considered a sellers market).

Absorption rates are pointing to a turning real estate market

While not all markets around the country have turned around at the rate here in the D.C. area – the sellers’ market has already arrived!

During the run up last time, interest rates were in the 8 – 9 percent range – so buyers aren’t afraid of rates nearly double today if they think they are buying in an escalating market. Which is starting to happen in market after market.

For more research, see www.MRIS.com and www.Realtor.org.

Until next time…

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.

With all the stimulus packages being floated out there at costs of up to $5,000 per tax payer (per program), the question comes begging about the Homebuyer Tax Credit.

“At $8,000 for each first-time homebuyer and now $6,500 for move-up buyers – how much is that going to cost the American taxpayers?”

Good question. Not knowing how many people will be able to take advantage of it, we’ll have to start with some guestimates.

Keep in mind, first, that about 4.5 million existing home sold in 2008 altogether and we have been on track to sell roughly the same in 2009.

For 2009, the tax credit was  only for first-time buyers and up to $8,000 (10% of the sales price, not to exceed $8,000). So not everyone received the $8,000 if they purchased a house less than $80,000 – but let’s go ahead and say they did for argument sake.

If the stats hold true, and that is about half of all buyers are first-timers, then there were 2.25 million buyers that qualified (assuming they didn’t go beyond the income limits – which many did). But for simplicity, we’ll say they all qualified.

Simple math puts the tax credits at $18 billion for 2009 – that doesn’t have to be paid back. For all the money that’s being floated out there to stimulate the economy, this is probably the best plan in play.

Now, before all my conservative friends blow a vein behind their eyeballs that are now popping – here’s what happens when a homeowner purchases a house (vs., say when someone buys a car or some other depreciating asset). They spend money on it. Lots of money.

The foreclosures/short sales that have made up most of the market for the last 2 years are mostly in paltry condition and need paint, carpet, appliances, countertops, cabinets, windows, landscaping, rot replacement, sump pumps, mold remediation, heat pumps, etc.

Unless you saw these houses, you just wouldn’t understand. I’m not talking “updating” homes that would otherwise be in good living condition, but making them inhabitable altogether. In fact, regular home buyers like you and me can’t even finance many of these houses because of the condition they’re in.

People get into a tizzy about home flippers swooping in and making “all this money” by flipping a house. Let me tell you – without the flippers some of these houses would completely fall apart. Remember, that lenders WON’T LEND MONEY on a house without complete bathrooms, that are mold invested, lack certain appliances, etc. And the REO banks WON’T fix them up to sell them. They just let them deteriorate while they wait for a buyer.

Enter the investor/rehabber who purchases the house with either cash or off-line financing, then fixes it up to pristine condition, sells it at a fair price and moves on to the next project. They are providing a much-needed service to even make the houses salable, much less inhabitable.

Now, as the market turns around in city after city (that’s what the increase in  pending sales is all about across the country), we’ll see an increase in sales and a use of the home buyer tax credit to fix up the housing pool.

The tax credit for home buyers has played its role and now it will go away April 30, 2010. The question for consumers is will they recognize and act on a good deal when they see it?

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

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