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
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.
Join us for dinner at
The Old Brogue in Great Falls
Monday, March 29th
Seatings at 5:30 PM and 7:30 PM
Reservations Highly Recommended
Approximately 90% of your dinner bill
will be matched and donated to this month’s charity.
Lift Me Up! Therapeutic Riding
Door Prize Drawings will be held
Also Ask About Our Buy a Vet Dinner Donations
The Bob Nelson Team
Previous Co-sponsors Include:
Knight Point Systems
Terry Nelson – Mercury LLC.
Kevin Shiner – Shiner Roofing and Siding
James Gaudiosi – Wells Fargo Home Mortgage
Danny Ott – Wells Fargo Home Mortgage
Chris Melnick – LSA Title Services
Gary Kaihara, DDS
The Old Brogue
Previous Door Prize Donors include:
Casa Noble Tequila
Elite Fitness Concepts
PF Chang’s Restaurant
Great Falls Design Build
Lodgecliffe Bed and Breakfast
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.
I have recently teamed up with Our Military Kids and Operation Second Chance in an attempt to bring some holiday cheer to our injured service members and their families. We’ve compiled a Christmas Gift Wish List for the families of our brave veterans. I’m hoping everyone will check out this list and consider purchasing one item, serving as Santa for an individual child or even sponsoring an entire family. The latter is a great option for a small company or office to consider.
The list below will be posted until Christmas and will be updated over the next few weeks. Give me a call or drop me an e-mail (email@example.com) to let me know how you would like to brighten a family’s Christmas day. Once you have done so, we will give you the full contact info for the family to allow you to send your gift(s) directly to them. I would also encourage you to click on the links above and visit the two websites to learn more about these wonderful grassroots organizations.
Bellis Family (Adopted by the Hoernig family – Thank you Laura and Family)
- 14 yr old girl: electric guitar, JC Penney’s gift card
- 11 yr old boy: football, Tennessee Titans merchandise, JC Penney’s gift card
- 6 yr old girl: Barbie doll, furreal electronic dog, JC Penney’s gift card
Broesch Family (Adopted by the Heil family – Thanks Tim)
- 15 yr old girl: art supplies (paint brushes, charcoal pencils), iTunes gift card
- 7 yr old girl: books, craft supplies, a Barbie doll
Brown Family (Adopted by Knight Point Systems – Thank you Lindsey)
- 7 yr old boy: Xbox 360
- 1 yr old girl: Disney princess toys/merchandise
Christiansen Family (Adopted by the Christianson family- Thank you Vickie and Family)
- 9 yr old girl: Girl Gourmet Cake Bakery
- 4 yr old girl: Girl Gourmet Cupcake Maker
Deen Family (Adopted by the Matthews family and Collingswood Nursing Home – Thank you Catherine)
- 16 yr old girl: iPod
- 15 yr old boy: video games
- 14 yr old boy: video games
- 9 yr old boy: board games
- 3 yr old girl: educational toys teaching the alphabet and numbers
- 18 yr old boy: laptop computer for his school work and for college next year
Helmuth Family (I can’t resist. Adopted by the Nelson Family.
- 3 yr old boy: Transformers, action figures, books
- 1 yr old girl: any toy that makes noise! (I love this one)
Loper Family (Adopted by the Borland Family – Thank you Dodie and family)
- 12 yr old girl: digital camera
- 11 yr old boy: remote controlled cars
- 10 yr old boy: nintendo dsi
- 7 yr old girl: American Girls doll
Sherrill Family (Adopted by the Copito family – Thank you Debbie and family)
- 14 yr old boy: new sports bag (for carrying sports equipment to practice)
- 11 yr old boy: new sports bag (for carrying sports equipment to practice)
- 12 yr old girl: in-line skates (size 6-7)
- 7 yr old girl: roller skates (size 1)
- 14 yr old girl: gift cards to Barnes & Noble or AMC Theaters
- 6 yr old girl: Barbie doll, clothes (pants size 6x, shirts size 7)
Hall Family (Thundercat Technology)
- 8 yr old boy: gameboy
Holsey Family (Adopted by the Grossmans. Thank you Jackie!)
- 15 yr old boy: gift cards to Footlocker and Macy’s
- · 13 yr old girl: Ipod Touch
- · 9 yr old girl: Wii gaming system
- · 6 yr old girl: Littlest Pet Shop toy house
Pointer Family (Adopted by the Heil family – Thanks Tim)
- 13 yr old boy: ripstick skateboard
We are getting close to publishing the Christmas Gift Wish List. Please keep track here and watch for an e-mail to learn how you can help out the children of our service men and women.
Please read the exchange below.
From: Tricia Bellis [deleted to protect]
Sent: Tuesday, November 17, 2009 2:20 PM
Subject: RE: A Holiday Opportunity from Our Military Kids
What a wonderful thing to do! It has brought tears to my eyes, the compassion your organization has for wounded soldiers and their families. I can’t tell you how much this means to us to have someone help out….a true Santa Claus.
We have 3 children and it seems like the older they get, the more expensive and electronical things they want become. Please let me know if it is 1 item per child and up to what dollar amount for each. I don’t want to come off sounding greedy but am very excited that you have thought of us.
Thank you again, and I will be waiting for you to write me back before I make our list.
To: deleted to protect
Subject: A Holiday Opportunity from Our Military Kids
Date: Fri, 13 Nov 2009 13:25:07 -0500
To whom it may concern:
A local businessman, Robert Nelson, already a proud sponsor of Our Military Kids, recently expressed an interest in providing additional recognition to several of Our Military Kids grant recipients during the holidays. With your permission, and some gift ideas for your children, we would like to compile a list of children and one special “Christmas Wish List” item to Bob. He in turn will forward this list to his personal business associates. If interested, these business associates will contact us and indicate the child they would like to shop for. This opportunity will help brighten their holidays knowing they could give something back to a military family who has served our country.
If you are interested in participating in this opportunity, please respond back to this email. Include your current mailing address, names and ages of your children and a gift idea for each. We appreciate the opportunity to offer you this special holiday thank you. (Last names and mailing addresses will be made available only to the individual doing the shopping.)
Our Military Kids
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.
The following is the same advice I gave my son four years ago when he purchased his first home and the same my dad gave me over 30 years ago when I purchased my first home. I still thank my dad for having done this and Bob still thanks me as well. I am fairly certain you would do the same in four and in 30 years.
You really want to stretch yourself a bit when you purchase your first, second, or third home. It requires some minor sacrifices from a personal lifestyle perspective, but will pay huge dividends in the long run. On average, home prices increase by about 10 percent per year. Since the end of WWII, we have repeatedly seen peaks and valleys in the housing market. We have also seen that, on average, home prices have doubled every ten years. The recent downturn really was not much worse than some of the previoues drops. In fact, there have been worse, particularly following the Savings and Loan crisis of the late 1980′s. More importantly, right now we are in the midst of the most affordable home market in almost 30 years. I would venture say that we are likely to see gains in home values (in our region) more to the tune of about 15 percent per year for the next few years. Even using the more conservative 10 percent average, if you purchase a $250,000 home, you will see a gain of more than $25,000 per year. A home purchased for $450,000 will see a gain of $45,000 per year, etc.
Using current mortgage interest rates of about 5 percent, your mortgage payments plus taxes and insurance (referred to at PITI) will cost about $55 per month per $10,000. (This factors in the savings that you will have on your state and federal taxes based on a 25 percent tax bracket.) Your annual in costs will be roughly $625 per year for every $10,000 increase in price. If historical trends continue to play out, your increased costs of $625 per $10,000 will result in an increase in equity of $1,000. A $50,000 increase in mortgage would cost about $3125 per year with a $5000 potential increase in equity. At the same time, you will be living in a considerably more comfortable home than your current home.
I don’t know nor need to know your income level, but an average couple in this region earns a minimum of somewhere around $100,000+ per year. Assuming an annual cost of living increase of about two percent, this income increase by about $2,000 per year. It might be worth thinking about cutting back on some of your entertainment expenses for a year or two to broaden the selection of homes available and imrpove your ability to see increased gains in the long run.
Of course, this is simply a suggestion. I am certainly happy to show you homes in the whatever price range you’d like, but am certain you will thank me profusely in three to five years if you decide to look at the next higher tier of homes.
A recent Wall Street Journal article, entitled “A Toe in the Water” written by Dave Kansas gives a very good perspective on what it happening in the marketplace. Dave is located in London and would presumably suggest diving into the local Northern Virginia market based on our current trends.
Last week I sent a total of 22 listings in Arlington for one of my clients to review. When we got together yesterday to look at these homes, 10 were already off the market. They are looking in the $650,000 to $750,000 price range. This is probably above the typical first time homebuyer range and is not likely affected by the $8,000 tax credit. I also went out with another couple on Saturday looking in the $200,000 range. We had a list of about ten homes to see which I had check for availability Friday night. From this list, only two were available by Saturday afternoon and they were complete wrecks.
To learn more about your home as an investment, I suggest reading “The Automatic Millionaire Homeowner” by David Bach.
Let me know when you are ready to take advantage of this incredible market.
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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Purchasing real estate is a great investment whether you are purchasing your first home, second home or are a seasoned investor. You are invited to visit this site often to view homes for sale, read home buying and selling advice, get information about local schools, and the local communities. (About Me)