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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 »

You’re going to hear about an amazing surge in pending sales for May 2013 pretty soon, but be still. In the midst of a hot market, there’s always an explanation for why pending sales for pocket markets would escalate by 100+ percentage points. Taking a gander at the table below, you’ll see that several markets in the D.C. area surged ahead of May 2012 in the 100%-plus range.

The final numbers will differ a bit from the info below, but as of the 25th of May, the Alexandria zip code area of Fairfax County, for instance, was up a whopping 140%. In May 2012 there were 127 pending sales, this year for that same time period, buyers nabbed 305 contracts. The same type of surge occurred in Springfield (141%), Falls Church (120%), Fairfax (116%), etc.

While we’re excited about the surge, it’s tempered by looking at the headlines and economic events that were occurring last year at this time. Namely, the NY Times announced, “Jamie Dimon, the bank’s chief executive, announced in May that the bank had lost $2 billion in a bet on credit derivatives…” and subsequent reports put the loss at around $9 billion. (For more info, take a look at this wiki report: http://en.wikipedia.org/wiki/2012_JPMorgan_Chase_trading_loss). What followed last year was a 1,100 loss on the Dow from April 27 through June 1, 2012, an investigation and resignations of JPMorgan Chase executives.

As goes Wall Street, many times, so goes the real estate buyers’ confidence. This year – the stock market is in all-time record territory, job creation is eeking upward and jobs are really growing in Northern Virginia, resulting in confident buyers with good mortgages, competing for homes.

Meanwhile, other good local news includes: listings are up; prices are up; and days on market are down. Need more information? Call us at Weichert Realtors, McLean VA at (703) 821-8300 if you want to know how the latest news affects your real estate goals.

The data below is compiled from the local MLS, MRIS.com. 

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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.

You got to love when the media finally catches up to the state of the market – Washington Examiner reported today (January 17, 2013) that foreclosures in the D.C. area have “plunged over 2 years.”

Over two years? Forget that! They’ve plunged in the last year. Data gathered from the local multiple listing system (Metropolitan Regional Information Systems) shows that foreclosures and short sale listings are down 64.5% in January 2013 compared to the same type listings entering the market in 2012 at this time.

The Washington D.C. market has led the country throughout the recovery period and Northern Virginia has led D.C. While there are still many homes that are “under water,” the region has nearly recovered in the last few years its lost values. December 2007, the average price was $542,775 (the highest average price for December ever for the region). Last month, the average price was at $518,503, according to data from MRIS (see the data sheet here). That’s just $24,000 below the high average. Prices are on the rise and we can expect that many homeowners in the region who have been under water will recover sooner than later!

This year is standing to be a huge year for home sellers and buyers in the suburbs of D.C. Foreclosures are nearly off the market (there are only 5 available in the Northern Virginia MLS at this writing). Need more info or to talk with a professional? Leave a message here or call (703) 821-8300 to Weichert Realtors in McLean.

 

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

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.

Housing markets are turning around all across the country. The way this is measured is first through pending sales and then the following closed sales. By the time the national numbers turned, the recovery had already been happening for months.

Albuquerque is one such city. Prices are still down from last year, but they are now leveling out at around $180,000 (for about 8 months now). The pendings have been increasing for months and now the closed sales are following suit. The same is true for cities such as Las Vegas, Washington DC, Miami, and others.

Are you taking advantage of this advantage as a sales person? Are you getting the word out to your local sphere about what’s happening in the local market place?

The recovery has happened, predictably, in two fashions in the favor of buyers.

1 – While prices dipped, buyers could have named their price and received thousands of dollars back from the seller to buy their home.

We had a phrase of — “what would be the price you just couldn’t walk away from” on this house. The buyer would look it over and say — “Well — if it was $25,000 less, I would buy it.” So that’s what we’d offer – and that’s what they would get. While the market continued it’s slide, buyers got ahead of the drop and “stole” houses all over the country. To the shagrin of banks and owners, the buyers pulled in discounts in the hundreds of thousands. The agents who knew how to forecast that drop, helped buyers save a ton of money and made good incomes through the process.

2 – The cost of money kept dropping and then Uncle Sam started throwing in money to boost morale and buyer interest.

In the home-purchase process, buyers have to buy two huge commodities — the house – of course, everyone knows that. They keep waiting for the price to drop to the bottom and THEN jump in and buy. But you have to also look at that second product – the money.

The cost of money is measured in the interest rate and the points paid for such interest rates. This year, buyers have picked up money for interest rates as low as 4% – those are rates that my grandparents never saw!

So we have low prices and low interest rates. Did you pick up on that as the sales pro? More importantly – did you get your buyers on board and off the fence?

If you wanted to have predicted the come-back, then a look at sales on a state-by-state level would have been a good place to start. The media looks only at price. A very foolish move. A recovery begins when the buyers return – much sooner than when prices start upward.

On this table from Realtor.org you can see that the hardest hit states (California, Nevada, Arizona, Florida, Virginia) have now had the best quarters (up 100%+ in some markets).

Yea – we hit the bottom alright. Get ready for the bounce.

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