Thanks for taking the time to visit BobNelsonTeam.com. I hope you will find the information here helpful in your day-to-day life in the Northern Virginia area as well as in your home buying or selling process.
Give me a call at: (703) 999-5812 or send me an email at Bob@BobNelsonTeam.com
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!
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.
Military Appreciation Mondays
Our Military Kids
April is national Month of the Military Child.
I hope you can come out for this month’s Military Appreciation Mondays event at the Old Brogue which will be in recognition of the contributions made by the children of our Servicemen and Women. I am particularly proud to be bringing back the truly special program – Our Military Kids. These dedicated folks provide support to children of deployed National Guard and Reserve personnel as well as to children of injured service members through grants for enrichment activities and tutoring. Such activities help these children cope with the stress of having a parent in a war zone or recovering from injury at home. OMK grants are made to honor the sacrifices that military families make and to ensure that their children have access to sports, fine arts, or academic tutoring programs.
To show your support, simply come out and have dinner at the Old Brogue in Great Falls. Myself and my cosponsors will each be contributing a 10 percent match (typically a total of an 80 percent match) of your dinner tab to Our Military Kids.
You can also show your support through:
A. The purchase of door prize entries. (ALL Proceeds go directly to Our Military Kids.)
B. Our buy a vet dinner initiative. A minimum donation of $25 to OMK entitles you to purchase dinner for one of our vets.
C. Or you can make out a fully tax deductible donation to Our Military Kids.
Be Certain to make a Reservation for
Either the 5:30 or 7:30 Seating by Calling
The Old Brogue at: (703) 759-3309
Hope to See You There
Feel Free to Post the Attached Flyer in Your Office
and forward this email to whomever you think may want to attend.
We Would Love to Break 150 Attendees
I am proud to say that last month’s event in support of the Lift Me Up! therapeutic horseback riding program for our injured vets had approximately 125 people in attendance and raised approximately $4,500. This was our best total to date. I would like to particularly thank Col. Pete Hilgartner (USMC Ret.) for helping out with a book signing at the last two events. Let me know if you would like to purchase a copy of Colonel Hilgartner’s book “High Pockets War Stories”. A $10 donation will be made to OMK with each sale.
Please be certain to support my co-sponsors whenever you have a chance.
Danny Ott – George Mason Bank
Gary Kaihara, DDS
and our door prize donors:
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.
As you have likely been reading, the First-time Homebuyer Credit program will expire on November 30′th. What many people have not understood, this means you must settle on your new home by that date. Having just purchased a new car, I encountered the flurry of activity that occurred on the last few days of the Cash for Clunkers program. For those who purchased a new car, it was feasible (although not advisable) to wait to the last minute. WARNING: This is not the way the homebuying process works. We are quickly approaching what is the last minute for you to make your purchase. Unlike picking out a new car, finding the right home can take a week, two weeks or in some cases several months. Even once you have found the perfect place to call home, you will then need to start the actual buying process. This has quickly become challenging in our local market since the more affordable homes are disappearing from the inventory. A simple understanding of the law of supply and demand will tell you that this will create upward pressure on prices and competition for the same properties. Remember that what you find appealing will also appeal to a great many others. I just sold my used car to “Joe C.” who has been trying to buy a home in Woodbridge. He said that he and his fiance have made offers on three homes, only to be out bid either by higher offers or all cash offers. There are several things that Joe and his Realtor can do to insure that this doesn’t happen which we can easily cover in person.
Once a contract is ratified, the process will then take a minimum of three weeks to four weeks to get to the settlement table. And this only if everything lines up perfectly. With that said, you will need between six and eight weeks to find the right home and settle on it. We have only 11 weeks until the program expires. The reality is that three weeks to spare in the homebuying process is equivalent to three hours in the auto purchase world.
If you are reading this post, you probably already decided to purchase a home, but I would suggest reading the about the Proven Path to Home Ownership since it provides a very succint discussion o fthe home buying process. We can always discuss this in more detail once we get together.
At the risk of sounding like a high pressure sales person, you really can’t wait much longer to take advantage of the First Time Homebuyer Credit. Depending on you income, this credit can mean an actual dollar savings of anywhere from $10,000 – 16,000 in pre-income tax money.
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