We wanted you to be the first to know that this morning the Fed lowered the discount rate by ¾ of a percent. This is the rate that has a direct impact on mortgage rates. We expect this change to have a substantial impact on the real estate market. Already today we have seen one lender offering 5 ½ % rates with no points! We look for even more aggressive pricing as the day progress’s.
Last July when the sub prime market crashed it “froze” our market leaving many sellers lowering their prices below actual market value and creating a lot of “low hanging fruit”. We expect that the Fed lowering the interest rates will jump-start our spring market early. The lower rates and the “low hanging fruit” mean unprecedented opportunities for the “early bird” buyers.
We have all been reading tales of doom and gloom regarding our real estate market and, it certainly has been better for buyers than sellers. However, while 2007 was certainly no 2004, it was still the 4th best year on record for real estate sales.
Our thinking is that this action may be politically motivated meaning that these lower rates may not be around for long. In addition, the “low hanging fruit” we spoke of will be plucked off the market quickly by savvy buyers. Bottom line, those that act early will reap the greatest rewards.
Spencer
P.S. More good news – Northern Virginia is ranked #3 for new jobs created in the nation – this is what sustains our local market and why our market does not feel anywhere near the pain that other states are feeling. Real Estate is a local business!
We update our local market stats monthly as we compile the information – check them out on our website under Local Information/Stats
Tuesday, January 22, 2008
Monday, January 14, 2008
The Year In Review
What a year we had in 2007. The first half of the year was a definite improvement over 2006 as far as the number of listings that were selling. By all early indicators 2006 was going to be the bottom of the market and we were on our way up. Inventory was shrinking monthly and was 20-25% below 2006 levels. Each month we were selling the exact same or slightly more than we did in the same month in 2006. So our number of sales rose slightly in the first half but our percentage of listings sold rose noticeably.
All that came to an abrupt end in July when the sub prime mess rose it’s ugly head. Inventory spiked, sales dropped, contracts fell out, lenders disappeared and consumer confidence hit rock bottom.
By October though the shock had worn off and our number of single family home sales came back into line with last years numbers although townhomes were still down by 25-30%. This is based on Centreville stats only. This varies by county and varies within the county. (We post all the stats monthly on our web site so you can review by area by visiting www.seln4u.com.)
The average LIST PRICE for ALL single family homes sold in CENTREVILLE in 2007 dropped to 602,293 from 663,621 in 2006. For ALL townhomes it dropped to 366,140 in 2007 from 391,827 in 2006. The total number of townhomes that came under contract in 2007 dropped to 648 from 826 in 2006 and 1,278 in 2005. The number of single family homes that came under contract actually increased to 279, up from 271 in 2006 but down from 434 in 2005.
The average number of single family homes that were available on the market in 2007 dropped (this is a good thing) to 151 from 172 in 2006 but still was almost double 2005’s number of 78. Townhomes did not fair quite as well averaging 274 active listings in any given month in 2007, down from 293 in 2006 but more than double the 127 in 2005. The real disparity comes in how we begin the year in 2008. With single family homes we are starting the year with 128 active listings up only slightly from the 118 of 2007 and 112 of 2006. Townhomes however are starting with 255 active listings compared with 153 in 2007 and 170 in 2006. This is primarily due to the changes in mortgage lending and availability of no money down loans and a higher percentage of foreclosures than in single family homes. Again these numbers are for Centreville only and we will not have the overall Northern Virginia Stats available until next issue. We will post them on our website as soon as we have the information properly formatted.
Overall 2007 will go down as the 4th best year on record at the NVAR and while it did not seem like it the only reason for that was that it is compared to 2003-2005. We sold all of the homes we listed (excluding those we still have on the market) and our days on market averaged just under 41. As this year unfolds we will continue to keep you informed.
All that came to an abrupt end in July when the sub prime mess rose it’s ugly head. Inventory spiked, sales dropped, contracts fell out, lenders disappeared and consumer confidence hit rock bottom.
By October though the shock had worn off and our number of single family home sales came back into line with last years numbers although townhomes were still down by 25-30%. This is based on Centreville stats only. This varies by county and varies within the county. (We post all the stats monthly on our web site so you can review by area by visiting www.seln4u.com.)
The average LIST PRICE for ALL single family homes sold in CENTREVILLE in 2007 dropped to 602,293 from 663,621 in 2006. For ALL townhomes it dropped to 366,140 in 2007 from 391,827 in 2006. The total number of townhomes that came under contract in 2007 dropped to 648 from 826 in 2006 and 1,278 in 2005. The number of single family homes that came under contract actually increased to 279, up from 271 in 2006 but down from 434 in 2005.
The average number of single family homes that were available on the market in 2007 dropped (this is a good thing) to 151 from 172 in 2006 but still was almost double 2005’s number of 78. Townhomes did not fair quite as well averaging 274 active listings in any given month in 2007, down from 293 in 2006 but more than double the 127 in 2005. The real disparity comes in how we begin the year in 2008. With single family homes we are starting the year with 128 active listings up only slightly from the 118 of 2007 and 112 of 2006. Townhomes however are starting with 255 active listings compared with 153 in 2007 and 170 in 2006. This is primarily due to the changes in mortgage lending and availability of no money down loans and a higher percentage of foreclosures than in single family homes. Again these numbers are for Centreville only and we will not have the overall Northern Virginia Stats available until next issue. We will post them on our website as soon as we have the information properly formatted.
Overall 2007 will go down as the 4th best year on record at the NVAR and while it did not seem like it the only reason for that was that it is compared to 2003-2005. We sold all of the homes we listed (excluding those we still have on the market) and our days on market averaged just under 41. As this year unfolds we will continue to keep you informed.
Wednesday, January 2, 2008
Fair Market Value
What is the best price for a piece of real estate? Mortgage lenders, appraisers, and real estate brokers use what is called the "fair market value" (FMV). FMV has been defined as "the price that a buyer is willing to pay and the seller is willing to accept, when both parties are knowledgeable about the property and neither is under any time pressure to buy or sell". Sounds great, but how is this price determined? The starting point for determining a fair price may be an opinion of the value or "comparative market analysis". Such an analysis uses information on similar properties which are: 1) currently for sale, 2) already sold, or 3) expired properties (those which did not sell). Local, national and international trends and market conditions must also be evaluated.By comparing similar properties in each of the three categories and the market conditions, appraisers, lenders and agents come very close to the maximum price that buyers would be willing to pay for a house.
Diamond In The Rough
There are a lot of "diamonds in the rough" for sale. A property with incredible potential may be in a great location, have large sunny rooms and a big yard, but it may also have dated wall paper, worn carpeting, and uninspired bathrooms. If you can look beyond the surface, you may see a house that could be transformed by a little "elbow grease", paint, and new carpets. A house that is structurally sound with all the systems in good condition may be only a few cosmetic repairs away from being fantastic! A home that does not show well is usually priced accordingly. If the price doesn't reflect the condition of the house, the seller may be more willing to negotiate than a seller who has made a considerable investment in preparing a home for the market.Bring your imagination with you on your next house hunting trip! You may be pleasantly surprised to find a diamond in the rough.
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