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NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said homes are selling much faster. “The typical home sold in March was on the market for one month less than it took to sell a year ago,” he said. “Multiple bidding is becoming more common, and more homes are selling above the asking price, so buyers need to move quickly and follow their Realtor®’s advice for contingencies when making contract offers.”
I can attest to that with our own experience over the past two months. One of my buyers made an offer on a townhouse in Arlington that included an escalation addendum going $40,000 over list price. We lost out on the contract. Apparently someone else came in at a similar number but without an appraisal contingency. I can’t fathom contracting to purchase a home for $40,000 over without an appraisal. Five or ten thousand is OK, but not $40k.
I then submitted a contract for condo in Old Town. This too went for over list price by $5,000. We had submitted our offer with an escalation addendum. The next highest offer was for $3,000 over list.
Last weekend two different clients submitted offers and lose out to others who came in higher. One for a home in Great Falls and the other for a home in Herndon. The home in Great Falls went for over list at $2.0 million and was an all cash deal with no finance/appraisal contingencies. Not quite sure what the one in Herndon went for, but we had an escalation addendum going to more than $20,000 over list. Both sets of clients submitted offers on other properties yesterday. Hopefully these will be more successful.
I am currently down at Keller Williams International’s annual Family Reunion conference in Orlando, Fl. I finished up talking with someone who has encouraged me to get back into the habit of blogging. As the subject line denotes, I will start with the current level of activity for the Great Falls Market.
Whenever doing a search for homes in Great Falls, it is extremely important to differentiate between that part of Great Falls located in Fairfax County and that in Loudoun County. While both in the 22066 zip code, the difference in price is typically at least $200,000 – $300,000 with the Fairfax side of the border costing more. For the purposes of this particular entry, I will be focused on the Fairfax side.
A quick run of homes on the market will bring up a total of 112 listings. Of this number, 10 are rentals ranging in price between $2,800 to $6,800. Since my primary purpose here is to discuss sales, I will eliminate these from the total number of homes. This in turn puts us a 102 active listings which will need further refinement. I normally subtract those listings that are “to be built” homes. My objective here is to determine how many properties are currently available for sale and are ready to move in. A total of 24 listings show up as “to be built”. One more property is really nothing more than a land listing. The to be built properties range in price from $833,714 on a 1.2 acre lot on Thomas Ave. to my listing at 119 Clarks Run Rd. which is priced at $3.95 million and will be built on an 8.9 acre property.
Now with these 25 listing removed, we end up with a total of 77 homes actually move in ready. Twenty-three of these properties are priced under $1.0 million. Twenty-four between $1.0 – $1.5 million. Ten between $1.5 – $2.0 million. The remaining homes range in price from $2.199,888 (not too sure why) to an incredible home on Innsbruck priced at $8.75 million. My whole purpose behind providing this is to show the real diversity of homes and price points available in the Great Falls market.
During the last 30 days, a total of 20 homes sold in Great Falls ranging in price from $440,000 – $3.650 million. As of today, there are a total of 25 homes under contract ranging in price from $425,000 to $4.5 million. With 77 homes available and 20 sold during the past month, that puts our Great Falls inventory at slightly under four months. In normal times, anything under a four month inventory would be termed a sellers’ market!
For the past 2+ years, we have been hearing that housing starts are down. In the shallow way in which our media reports things, this has been presented as something less than desirable. Although not an economist, for the same 2+ years, I have been saying that this is actually a very good thing for the long term health of both our housing market and the U.S. economy in general. Builders and investors got carried away with home construction during 2004 and 2005. They ended up putting way to much inventory into the market place than was needed. We are just now entering into a period where there is beginning to be housing shortages (in certain markets). This in turn has caused rents to increase. This is very much the case in parts of Fairfax and Arlington Counties.
The June 20th issue of the Economist contains an article entitled: “Will housing save America’s economy?” that is discussing the fact that there is a large pent up demand for new housing. To read the full Article, click on the link: Economist Article. Hope you find this of interest.
Five Reasons You Should Sell Your House TODAY!
Selling your house in today’s market can be extremely difficult. It is for that reason that every seller should take advantage of each and every opportunity that appears. Each fall, such an opportunity presents itself. This fall, that opportunity may be just too good to pass up.
Below are five reasons you should consider pricing your house to sell in the next 90 days. Meet with your real estate agent and mortgage professional today and see whether it is the right move for you and your family.
1. Entering this time of year, the buyers are more serious.
We all realize that buyers are not quick to pull the trigger on the purchase of a home today. There is no sense of urgency with the supply of eligible properties at all time highs. However, at this time of year, the ‘lookers’ are at the stores doing their holiday shopping. The home buyers left in the market are serious and are more apt to make a purchasing decision. Less showings – but to more motivated purchasers.
2. If you are moving up, you can save thousands.
The Chicago Tribune stated in an article last week that sellers who want to ‘trade up’ should act now:
It could be a bigger house, different neighborhood or a better school district, but it comes with a higher price tag. Do the math; this might be the right time.
A home that was once worth $300,000 may now be worth $240,000 in a market where prices have fallen 20 percent. Wow, you think, the seller is taking a bath. But that seller may also be a prospective buyer who wants a house that once was valued at $400,000. With an equivalent market drop and a realistic listing price, that house may now sell for $320,000. So, in effect, the person is losing $60,000 on the sale of one home but coming out ahead $20,000 on the purchase of another.
Keep in mind the spread may be even greater. There’s a smaller pool of potential buyers for more expensive homes, so sellers may be more willing to cut their price to get a deal done.
3. Interest rates just fell again – to 4.19%.
Professor Karl E. Case, the founder of the Case Shiller Pricing Index in an article in the New York Times last month actually did the math for us:
Four years ago, the monthly payment on a $300,000 house with 20 percent down and a mortgage rate of about 6.6 percent was $1,533. Today that $300,000 house would sell for $213,000 and a 30-year fixed-rate mortgage with 20 percent down would carry a rate of about 4.2 percent and a monthly payment of $833 … housing has perhaps never been a better bargain.
4. You beat the rush of inventory that is coming next year.
Every year there is an increase of inventory which comes to market from January through April as homeowners put their houses up for sale in preparation for the spring market. As an example, here is the number of listings available for sale in each of those months in 2010.
- January – 3,277,000
- February – 3,531,000
- March – 3,626,000
- April – 4,029,000
You won’t have to worry about this increasing competition if you sell now.
5. You have less ‘discounted’ inventory with which to compete.
This year, sellers of non-distressed properties have been given an early holiday present. With banks declaring a suspension on the sale of many distressed properties (foreclosures), there has been a large supply of discounted properties removed from competition. No one knows how long this self imposed moratorium will last. However, while it does, every homeowner has a better chance of selling their property.
If you are looking to sell in the near future, there may not be a more opportune time than this fall. Serious buyers, great move-up deals and less competition from foreclosures creates the perfect selling situation. Don’t miss it!
As I have been saying (and writing about) during the past two years, our local real estate market will likely be the first to return to normalcy. This is based on the fact that our local economy continues to be a fairly strong once. A recent Washington Post Article entitled, “In Throes of Recession, D.C. Stands Apart”. I have also been warning that we may well see a spike up in prices for both first time home buyers and move up buyers. This due to what I believe will be a severe lack of new homes coming into the local inventory. Many first time buyers have been looking at foreclosures as a means of getting into the market. This is beginning to wane as those opportunities become less and less. While the number of foreclosures currently at 179 for Fairfax County may seem high, a total of 225 sold in October alone in 2009 compared to only 113 for September 2010. If you or someone you know is contemplating a purchase in the near term, I would suggest they consider doing so during the next three to four months. I fully believe that once our spring market kicks in, we may well see a spike in prices as the inventory gets eaten up quickly. This has already begun to happen with homes located inside the beltway in Virginia with homes receiving multiple offers and in some cases offers that include escalation addenda. We also have record level interest rates for 30 fixed mortgages.
As Realtors, we often get asked questions regarding the accuracy of the Zillow website “Zestimates”. I typically respond by saying that the efficacy of these depends entirely on the neighborhood, location and condition of the home. The accuracy within Virginia ranges from a best case of 5.2 percent for Arlington to a worst case of 27.8 percent for Caroline County. Even within these figures, the numbers can really vary from street to street. Your best bet is to make certain you employ a Realtor who fully understands the local market and can help you establish a true fair market value for the home whether you are buying or selling. Click on the link to review the Accuracy of Zestimates.
Please take a look at Zillow Zestimate Accuracy Table by clicking on the link to see how they did with your county. Feel free to give a call or e-mail if you have any questions on these figures.
The real estate market in Great Falls, Virginia has seen a strong upsurge in sales during the second third of 2010. During the first four months of 2010, 42 homes sold with a price range of $525,000 – $2.805 million. Of these, 17 were priced under $1 million, 9 priced between $1.0 – 1.25 million, 13 between $1.25 – $2.0 m and three over $2 million.
During the second four months, a total of 101 homes an increase of almost 2.5 times the first four month. These had a price range of between $594,900 – $6.5 million. Of these, 43 were priced under $1 million, 18 $1.0 – $1.25 million, 34 between $1.25 – $2.0 million and six over $2 million. In addition, another 48 homes are currently under contract. Of these second four month sales, I have had a total of $5.3 million either sold or under contract at this writing.
James Gaudiosi with Wells Fargo just informed me that the first time home buyer tax credit is extended for military and certain other federal employees serving outside the U.S. Myself and I would have to believe most Realtors were not aware of this stipulation in the tax credit legislation. Please see below for the specifics.
Members of the U.S. military and certain other U.S. federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.
In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community. This relief applies where a home is sold or stops being the taxpayer’s principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual’s spouse) for qualified official extended duty service. The credit is still allowable even if this happens during the year of purchase. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer’s principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.
If you know of anyone whom meets the above criteria and would appreciate the level of support provided by myself and the Bob Nelson Team, please give me a call or drop an e-mail. I will be more than happy to help them out.
According to data from the National Association of Realtors, pending home sales were up 3.7 percent in October, compared to September, and up 32 percent when compared to October 2008. This was the biggest annual increase in history. Keep in mind that October 2008 was a historic low so we should not be surprised by the huge increase.
Pending home sales — which equates to the number of contracts signed but have yet to close — rose in all sections of the country except the West. They were up 20 percent in the Northeast, 11.6 percent in the Midwest and 5.4 percent in the South, but down 11.2 percent in the West.
Part of the surge is probably attributable to buyers rushing to take advantage of the government-subsidized first-time home buyer’s credit, which was set to expire at the end of November but now has been extended through April. Also, the bulk of sales still are coming from cheaper houses, with little movement in houses costing more than $250,000.
Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of REALTORS®.
Existing-home sales—including single-family, townhomes, condominiums, and co-ops—jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in more than two years, since it hit 5.73 million in July 2007.
Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”
Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home-owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said.
Conditions for First-Time Buyers
Early information from a large annual consumer study to be released on Nov. 13, the 2009 National Association of REALTORS® Profile of Home Buyers and Sellers,shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.
NAR President Charles McMillan said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average.”
Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0 percent below a year ago.
“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19 percent in August; the rate was 6.04 percent in September 2008.
Home Sales Breakdown
The national median existing-home price for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.
Single-family home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7 percent above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1 percent below a year ago.
Existing condominium and co-op sales jumped 9.7 percent to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7 percent above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7 percent from September 2008.
Here’s the region-by-region picture:
- Northeast: Existing-home sales increased 4.4 percent to an annual level of 950,000 in September, and are 11.8 percent higher than September 2008. The median price was $234,700, down 7.0 percent from a year ago.
- Midwest: Existing-home sales jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price was $147,600, which is 1.0 percent below September 2008.
- South: Existing-home sales rose 9.0 percent to an annual level of 2.06 million in September and are 10.8 percent higher than September 2008. The median price was $153,500, down 7.6 percent from a year ago.
- West: Existing-home sales surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.