I recently came across a fantastic article in Forbes regarding the future of the Washington, D.C. area real estate

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market. With today’s current depressed home values and the commercial market experiencing a bit of a sag, this will be a major shot in the arm for our region.  I would seriously suggest that you take a minute and read through the article.  Even if you are not considering any type of real estate transaction in the foreseeable future, it behooves you to at least know what to expect in the coming months.

The following is the gist of the Forbes article as it applies to the DC Metropolitan area.  You can simply click on the link to read the full article.

Washington, D.C., traditionally takes a back seat to world cities like London, New York and Tokyo when it comes to real estate investment.

That’s likely to change.

Thanks to a proposed $1 trillion wave government spending, investors are flocking to D.C. for opportunities in the commercial and residential real estate markets. All these new programs will need offices, after all, and their employees will need places to live.

This year, Washington leapfrogged London for the first-place ranking in the world’s best cities for real estate investment. But don’t count out the world’s financial capitals just yet–even with massive financial troubles in London and New York, those cities finished second and third, respectively.
In Depth: World’s Best Places For Real Estate Buys

Why? It’s the appeal of long-term stability, and fears that emerging countries are going to take a harder hit. While the U.S. property market sputters, China is poised for its worst deflation in a decade, focused heavily on property price declines, according to Deutsche Bank.

(Forbes Article)

Earlier this week, the Today Show had a segment on the Top Ten Myths. The advice given on the show was extremely valuable and really should be taken into account whether buying or selling a home. I will be reviewing these in separate entries beginning with the top myths believed by Buyers.

Buyer myth #1: The longer a house is on the market, the more you can negotiate. When buyers ask, “How long has this property been on the market?” They think “six months” means they can negotiate the price down. It more often means the seller is stubbornly (not my choice of word) holding on to their price.

Working with both buyers and sellers in this terribly confusing market, I’ve learned that this adage is way off base. The time on market was very much a factor when negotiating a sales price during the boom period. When everything was selling in a matter of weeks if not days, a significant number of days on the market was most definitely an indicator of a home being overpriced.

The current housing inventory is such that many local markets are seeing inventories that exceed six months and actually approach 12 months worth. Buyers are simply being extremely choosy and want a home that is in perfect condition and meets all their criteria. Quite often these folks are passing up on extremely great opportunities simply because the home needs a modicum of work. Those who do recognize the bargain a home that needs work may represent will then try to negotiate too hard and not get the home they want. Avoid getting caught up in the mindset that you have to steal a home. You may ultimately get a great price for a house, but end up with your second or third choice for a home.

I always try to stress the idea that if you strictly want a bargain investment, look to the stock market. There really are some incredible bargains. When looking for a home, first find the home that makes sense for you and the family and then negotiate the best possible price. You typically only end up in your perfect home when there is a win-win type negotiation. Five years from now, you will look back and realize it was well worth that extra two or three percent that it took.

Remember: YOU ARE BUYING A HOME NOT A SHARE OF STOCK.

Of course the above does not necessarily apply when looking for investment property.

Keller Williams Real Estate

Keller Williams Realty is the fourth largest Real Estate firm in the country and is currently making in-roads into the northern Virginia market.  After more than six months of discussions, I decided to make my move to Keller Williams.  As many who know me would understand, this was a very difficult decision.  I was very attached to my previous company, especially since this was the firm my mom had worked for back in the 1970′s.

The advantages to my clients are just simply too numerous to have done anything else.  The Keller Williams model is directed towards the more experienced agents and thus promotes a more sophisticated approach to marketing homes and supporting buyers.   While small, a very tangible example is the administrative fee that is charged by other real estate firms.  This fee was recently raised to $340 per transaction and could thus amount to $680 if you were to buy and sell a home.  This for the very privilege of letting the firm earn a commission on your home sale or purchase.  This never quite made sense to me nor to most of my associates.    The Keller Williams Admin Fee is $0.

There are a great many other advantages that we can certainly discuss in person.

I will be working out of the McLean office for the next month or so until such time as we establish a temporary office in Great Falls.  A fully operational space will likely come within the next 6-12 months.  Until that time, we can either meet in McLean or my second office Katie’s Coffee House (a.k.a. The Old Brogue).

I look forward to assisting you and/or anyone you know who may be considering buying or selling a home.

The Great Falls, Virginia market has tended to have fairly severe price swings over the past four housing downturns. While price swings happen in most markets, because of its uniqueness, Great Falls goes up higher and down lower than many others. I believe this is because of the desirability of the Great Falls lifestyle. When the economy is doing well, those who can afford the higher prices (the higher maintenance costs) will pay the premium to live here. Unfortunately, there are those who overextend themselves to get that dream home. These individuals end up getting into trouble when their incomes drop with a slower economy. They then either lose their homes through foreclosure or are forced to sell it at a sizable loss. This then drags down the prices of other homes which also are on the market.

While common sense, you want to be sure to buy low/sell high if you want your investment pay off. Having said this, there is no better time than the first quarter 2009 to buy low. This is particularly true for homes in Great Falls. My advice is almost always based on my personal experience or how I counsel my own sons. Nancy and I purchased our home in 1999 during the last downturn for $505,000. After a $300,000 renovation, this home was recently appraised at $1.3 million in this down market. There are currently some truly incredible opportunities.

Example one: A home that sold for $1.3 million only three years ago was recently foreclosed on and is being offered for $808,000. I am fairly certain that the bank will accept somewhere between $700,000 – $750,000. I had hoped for my son to be able to purchase this home, but it is priced just a little too high for him.

Example two: This home sold for $1.126 million only two years ago (after the market had come down) The home had about $150,000 put into upgrades and is now for sale at $1.1 million. It has five bedrooms and three full baths on the upper level. Since this one is my listing, I can’t comment on what I believe it will sell at. I do feel its the best bargain in the $900,000 – $1.2 million range. So do other realtors since it is averaging more than five showings per week.

Example three: A home that sold for $1.995 million in 2005, had about $200,000 in upgrades, is now on the market for $1.499 million. I had shown this home several times when it was priced at $1.8 million and am totally surprised it didn’t sell long ago. The home is currently vacant and will likely sell for a good bit less.

Homes one and three are definitely examples of buy high/sell low.  Contact me when you would like to make an investment of a lifetime.

I just couldn’t wait to get young Robert on the wrestling mat.  Here we are discussing the various moves named after our family.  Just in case you don’t quite understand baby talk, he’s saying that his favorite is the three-quarter Nelson.    I just may have to come up with a new move – the pint-sized Nelson.

Nancy and I are loving every minute we get with the twins.  This particular video was last Saturday night when we had an opportunity to babysit.

IT’S TIME TO TAKE THE PLUNGE!

I often tell the story of how, as a realtor, I am like that person who first taught you how to dive off a diving board.  Practically all of us had this experience when we were young.  You wanted so badly to learn how to dive into a pool.  We stood at the end of the dock, put our hands over our heads and then jumped in feet first.  It took a big brother, sister, uncle or someone else to hold their hand on your belly, doubl you over and then push you in head first.  This was an exhilarating experience and you couldn’t wait to get back up on the diving board and do it again.

We all have considered taking that leap into the real estate market, either as a first time buyer, investor or move up buyer diving back in for another time.  I am firmly convinced that its time to get back into the market and take the plunge.  You will be thrilled you did so and will look back at the experience as the best move you ever made.

MORTGAGE RATES HAVE DROPPED!!

If you have been on the fence about whether or not is the best time to buy a new home, here is the best reason to dive in.  Your dream home just became more affordable.  That’s because the federal government has now taken steps that caused interest rates to drop considerably.  For example, a $250,000 30-year fixed rate loan could save you as much as $220 a month now versus just one month ago.    

HOME PRICES DROP AS WELL!!!

An Incredible Bargain