Yesterday the National Association of Realtors released figures that showed a 3.1 percent increase in existing home sales nationwide, their highest level in five months. However, for the past eleven months have seen the sales numbers move in a relatively narrow range. Year-on-year statistics, however, show a 13.2 percent reduction in homes sold. Read the detail here.
The Northern Virginia Association of Realtors has released statisics for northern Virginia showing that comparing July 2008 to July 2007, the number of homes sold is down approx. 17 percent to 9,871 homes, and the average sales price is down 11 percent to $539,992.
The General Capital Area Association of Realtors has released statistics for Washington, D.C. showing that comparing July 2008 to July 2007, the number of homes sold is down approx. 31 percent, but down only 24 percent for 2008 through July 31.
If you're a buyer, there are sill plenty of homes out there to choose from, but the best looking houses and best values sell much faster than the rest. Watch your purchasing power; don't let rising interest rates sneak up on you. If you're a seller, price well, show well, and maket well to give yourself the best change of getting your home sold before the competition sells.
I can help you whether you're buying or selling. Don't hesitate to drop me an e-mail at John.Mentis@LongandFoster.com.
Thank you.John
Arlington County, Virginia has been named the top "wealth center" in the United States in a study recently issued by BizJournals. Read the County's press release as well as the full article in the Washington Business Journal. The city of Alexandria, Virginia ranked #4 out of the more than 250 communities considered.
If you're thinking about moving to either moving to Arlington or Alexandria, or are a current homeowner in either, I'd be glad to serve as your buyer or listing agent for residential real estate. My office is in Arlington, and more than 40% of all homes I sell are in these two communities.
If your life is changing, I can help!
Sincerely,John
WASHINGTON, August 07, 2008
Some improvement is projected for existing-home sales in the months ahead, with broader gains seen by the fourth quarter as buyers take advantage of new provisions provided through the recently passed housing stimulus bill, according to the latest forecast by the National Association of Realtors®.
The Pending Home Sales Index,¹ a forward-looking indicator based on contracts signed in June, rose 5.3 percent to 89.0 from a downwardly revised reading of 84.5 in May, but remains 12.3 percent below June 2007 when it stood at 101.4.
Lawrence Yun, NAR chief economist, said sales have been in a pattern of rising and falling within a fairly narrow range. “The vacillation of data from one month to the next indicates a housing market in transition,” he said. “The rise in pending home sales was broad-based with all four regions showing gains. This is welcome news because a rise in contract activity is necessary for an overall housing recovery. With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009.”
The PHSI in the South jumped 9.3 percent to 92.4 in June but is 16.6 percent below June 2007. In the West, the index rose 4.6 percent to 101.0 in June but remains 1.7 percent below a year ago. The index in the Northeast increased 3.4 percent to 79.6 but is 15.4 percent below June 2007. In the Midwest, the index rose 1.3 percent in June to 79.6 but is 13.3 percent below a year ago.
Sales gains have been consistently strong in recent months in Sacramento, Calif.; Las Vegas; and Ft. Myers, Fla., where affordability conditions have greatly improved.² The pickup in contract signings appears to be broadening with many affordable markets in mid-America now showing year-over-year gains, including Columbus, Ohio; Charleston, W.V.; Oklahoma City; and Colorado Springs, Colo. Pending sales have fallen significantly in Texas markets and in the Pacific Northwest - two regions with very strong local economies.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the housing stimulus package will provide long-term relief. “Provisions to stem foreclosures are helpful, but a greater lift to the economy should come from higher mortgage limits, enhancements to the FHA loan program and the first-time home buyer tax credit,” he said.
“These are excellent tools that will help buyers get into the market to take advantage of the unprecedented drop in home prices in many areas, as well as a wide selection of inventory, to make an investment in their future,” Gaylord said.
With roughly 2.5 million first-time home buyers taking advantage of the temporary tax credit, existing-home sales are likely to rise 7.0 percent to 5.51 million in 2009 from a expected total of 5.15 million this year.
Yun said home prices did not fall as much as anticipated in the second quarter. “Buyers entering the hardest-hit markets, in some cases with multiple-bid offers, may have put a floor on prices,” he said. “ In addition, rising commodity prices and higher construction costs have resulted in a very unusual market today with existing-home prices being less than replacement building costs in some areas. Home prices are projected to increase 3 to 6 percent in 2009.”
“Builders need to further cut production to help trim inventory. However, new-home sales are expected to bottom around the second quarter of next year with slight gains in the second half of 2009,” Yun said. New-home sales are forecast to drop 8.8 percent to 464,000 in 2009 from 509,000 this year. Housing starts, including multifamily units, should fall 8.8 percent next year to 795,000 from 960,000 in 2008.
The 30-year fixed-rate mortgage, which also has been vacillating, is likely to trend up to 6.5 percent by the end of 2008, and then hold at that level for most of next year. NAR’s housing affordability index is forecast to remain favorable this year, averaging 13 percentage points higher than in 2007.
Growth in the U.S. gross domestic product (GDP) is expected to be 1.7 percent this year and 1.5 percent in 2009. The unemployment rate is projected to average 5.5 percent in 2008 and 6.0 percent next year.
Inflation, as measured by the Consumer Price Index, is seen at 4.1 percent in 2008 and 2.6 percent next year. Inflation-adjusted disposable personal income is estimated to grow 1.7 percent this year and 1.1 percent in 2009.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
# # #
¹The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
²Market information is from unpublished snapshot data; please contact your local association of Realtors® for more information.
Second quarter metropolitan area home prices and state home sales will be published August 14. Existing-home sales for July will be released August 25; the next Forecast / Pending Home Sales Index will be released September 9.
If today's loan rates have you stuck on the fence about whether to buy now, this one-year buydown may be the ticket for you to get your next home this year. The transaction does not have to close/settle by August 31st; the loan just has to be locked in by that date (locks over 60 days may have a cost associated with it, depending on the lock period). High-balance FHA loans are included, and down payment assistance programs are allowable.
For more information, contact Prosperity Mortgage Loan Officer Harsh Patel at 703-824-7663, Harsh.Patel@ProsperityMortgage.com, or to apply online go to www.PatelMortgages.com.
The following was provided by the National Association of Realtors. It is NOT all-inclusive about the new law. Before making any housing or tax decision based upon the following information, consult a licensed professional in either the real estate or tax field:
On July 30, 2008, President Bush signed H.R. 3221, the Housing and Economic Recovery Act of 2008, which is now Public law 110-289. The legislation contains significant modifications to the FHA housing program, some modification (but not elimination) of downpayment assistance programs, a new regulator for Fannie Mae and Freddie Mac, a contingency plan to shore up Fannie Mae and Freddie Mac, new programs to assist distressed borrowers refinance their mortgages to avoid foreclosure, and a new $7500 tax credit to provide an incentive for first-time homebuyers.
The massive legislation has numerous retroactive, immediate, and prospective effective dates, depending on the provision. A few highlights of the major features follow:
Recently Forbes magazine announced their annual Best States for Business rankings, putting Virginia in the top slot for the past three years in a row. "Virginia remains an excellent location for new or existing businesses. It has the best regulatory environment by our count, thanks to the second-best incentive programs in the country--as well as the fifth best tort atmosphere. Other high points include energy costs 30% below the national average and an educated labor force fueled by its proximity to Washington, D.C., and top colleges like the University of Virginia and William and Mary. "Our rankings measure states on six main areas of importance: business costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life. Business costs are weighted the most, but low costs were not enough to keep Louisiana and West Virginia from being the bottom two in our ranking. We look at a total of 32 data points to compile rankings of the six main categories."
Click here to read the entire article.
If you're careful and read beyond the panic stories, you'll note that some of the nation's respected financial publications are talking about the market bottom and whether we're in it right now. Earlier this year The Wall Street Journal had several such articles. Now Barron's has written a similar one. For those of you who are trying to time the market as to when to buy to get the maximum amount of house for your dollar, you need to read this.
You can take a look at all the homes on sale in our market, listed by any real estate brokerage, by visiting my public portal to the MLS at www.HomesDatabase.com/JohnMentis.
Over the past six months the media has been reporting the "great opportunity" homes buyers have in purchasing a property in "short sale" status. The message was repeated again and again. What was missing from that drumbeat was any mention of the reality of the process, which is a far cry from the rosy picture earlier reports painted. Now just two weeks ago, The Washington Post printed a hard hitting article that laid out the ugly truth: actually closing/settling a short sale is tough and usually doesn't happen.
I've had personal experience with this. Clients put in a contract at the end of March and didn't settle until just last week -- almost 90 days from the day they submitted the offer, compared to the 30 days is takes to settle most traditional sales. Short sales are not for the faint of heart nor for the impatient, i.e., not for those who don't have the patience of a saint. Most short sales fail because the buyer walks away, not wanting to wait any longer on the lender(s) to make a decision on whether they're going to approve the short sale.
The details of the process are too long for this simple blog. In summary: (1) when a property is listed as a short sale, there's no guarantee the lender has given --or can give -- their approval for such upfront; (2) if there are two lenders involved, add time for each lender to give their approval and for them to agree on how much the second lender will get out of the proceeds -- and statistics show when two lenders are involved, a short sale usually fails; (3) the short sale arm of the deal doesn't talk to the foreclosure arm of the process, so the home could be foreclosed out from under you right up until you sign the purchasing documents at settlement; (4) you will most likely have to buy the property in "strictly as-is" condition; and (5) the buyer's agent cannot speak to the seller's lender, so all the information has to come through the listing agent. If you as a buyer can't put up with all of the above -- and more -- I urge you to consider bypassing short sales.
Having said all this, my clients put up with the ordeal and closed the deal last week. A large part of the success was the time invested and hard work of the listing agent, the sellers, the buyers, and me as the buyer's agent. Pulling together and with big doses of patience, we pulled it off and my clients closed the purchase.
Whatever your real estate needs, I'd be glad to help! Please let me know how I could serve you as either your buyer's agent or listing agent.
Earlier this year the Virginia Association of Realtors put out their top 10 list of things consumers should know about today's Virginia real estate markets. My past and future blogs share them with you.
#6 - "The market favors Virginia's first-time home buyers."First-time buyers in Virginia are younger and have higher incomes -- they're typically 25-34 years old and earn a median income of $71,300 annually (22 percent higher than the national average of $58,300). They made up 29 percent of all Virginia homes sales in 2006. And there’s currently plenty of inventory for first-time buyers to choose from. For details: www.VARealtor.com/2006BuyersSellers.
I've been busy!
Last week 2 of my clients went to closing. First, my 2 bed/2 bath listing in The Matrix in Logan Circle closed after being on the market approximately 60 days. Second, buyer clients of mine closed on a lovely 3 bed/2.5 bath townhouse in the Federal Hill HOA of Falls Church.
Additionally, my brand new listing in 1441 Rhode Island Avenue Condo went under contract after being on the market for only 3 days! And we had multiple offers! (See detail on the property by looking at the listings at www.JohnMentis.com.)
Let me know how I can help YOU!
Thank you to all of you who looked at or contacted me about my listing in The Matrix, 1529 14th Street, N.W. #604. This listing went under contract this week and is expected to settle/close shortly. If you missed the chance to see this unit, I'd be glad to help you find something else in Logan Circle or other neighborhoods in D.C. that might meet your needs. Just let me know!
Have a great Memorial Day weekend!
Sunday, May 18, 2008, 1-4 p.m.
1529 14th Street, N.W. #604Washington, D.C. 20005
2 bed/2 bath for $629k -- a $30k reduction!1100 SF, 2 private balconies, 1 reserved parking space
Buzz "Pappas" on the address board for entry.
Thanks for coming over!
This is the question on everyone's mind: is it over? Are we at the market bottom yet? A guest commentator in last week's Wall Street Journal seems to think so: "The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now." Read the entire article here.
If this article makes you wonder what your home is worth if were to sell today, or what you could afford to buy if you went house shopping today, give me a call (703-824-7618) or drop me an e-mail (John.Mentis@LongandFoster.com) to start the discussion.
The Labor Department brought us today's big news with the release of April's Employment report. They said that the unemployment rate fell to 5.0% when it was expected to rise to 5.2%. The payrolls number was also bad news for bonds with a 20,000 job decline compared to the forecasted 75,000 drop. Those readings indicate that the employment sector may not be as bad as many had thought. This has hurt bond prices and led to this morning's increase in mortgage rates.In a bit of good news though, the average hourly earnings portion of the report showed a 0.1% increase in earnings. This was well below the 0.3% that was expected and should ease some concerns about wage inflation.
March's Factory Orders data was also released this morning. It showed a 1.4% increase in orders that greatly exceeded forecasts of a 0.2% rise. Also worth noting was a 0.4% upward revision to February's orders. This means that combined orders for durable and non-durable goods exceeded what analysts had thought.
Bottom line, March's numbers were stronger than expected all the way around. The cumulative effect on mortgage rates is likely to drive them up. Time will tell.
If I can help with the sale or purchase of your home, don't hesitate to contact me. I'd be glad to help!
The Virginia Association of Realtors recently put out their top 10 list of things consumers should know about today's Virginia real estate markets. My past and future blogs share them with you.
#5 - "The are hundreds of reputable mortgage companies ready to lend.Buyers with good credit and a realistic view of what they can afford should have an easier time obtaining mortgage approval. Help is also available for those with damaged credit or limited means through the Virginia Housing Development Authority and other organizations.
The lending environment has really changed since 2005, over the past year, and even over the past month. It has become tougher to obtain a loan and to get to closing because of tighter rules for borrowers on credit scores, down payments, and appraisals. These tougher rules shouldn't scare the potential buyer, but they are a reality check of which buyers should be aware. General rules of thumb are (1) be brutally honest with yourself about your financial situation, (2) shop for your mortgage among lenders, (3) remember the adage "if it sounds too good to be true, it usually is," (4) you'll need some amount for a down payment as 100% financing has all but disappeared from the market, and (5) just because it may be difficult to get a mortgage doesn't mean you shouldn't try.
On the flip side, challenging times for buyers means challenging times for sellers. That is, if there are less buyers because of financing issues, then there are less potential buyers for every home on the market. Regardless of what a seller believes their home to be worth, and regardless of what their neighbors' homes sold for six months or even one month ago, the market continues to change -- sometimes on a daily or weekly basis.
These trying times mean both buyers and sellers will benefit from the knowledge and services of a Realtor®. If you're considering buying or selling, I'd be glad to serve as your Realtor® to help you make it through today's housing maze.
OH 4/27 1-4pm (buzz Pappas or call Doug 202-812-0656). LOFT STYLE w/open floor plan! Dining area! Stainless/granite kitchen! True 2 bedrooms w/lg master. Maple HW floors. Bosch washer/dryer in unit. Wall of windows w/2 private balconies; amazing rooftop terrace! Dedicated parking #6 at bldg back door. 3 metros nearby. Whole Foods, Starbucks, Studio Theater, restaurants, shopping, more! See photos at http://www.johnmentis.com/John_Mentis_homes_for_sale or www.HomesDatabase.com/JohnMentis.
Thanks in advance for stopping by!
"#4 - Housing demand in Virginia is set to grow."Estimates show the Commonwealth's population will increase by almost 500,000 by 2010. These new Virginians will need a place to live. For details: www.CooperCenter.org/Demographics.
My first impression when reading this was, "This is of course the long term view of the market," but 2010 is only 2 years away! So, population growth is a more important factor for housing demand than many of us think. About half my business in 2006 and 2007 was from buyers moving to the area for jobs.
If you're moving to Virginia or D.C., please contact me. I'd be glad to serve as your Realtor® to help you find a great new place to live here!
"#3 - A House is a Place to Make a Home, Not Just a Buck."Most purchasers don't buy a house to flip it. They buy it to live in. The value of strong communities, rooted famliies, civic pride, comfortable retirement, and a higher quality of life can't be expressed on a balance sheet.
Having clients make an informed decision -- whether buyer or selling -- is what I'm all about. Contact me if you'd like to discuss your needs further.
A report issued yesterday by local real estate consulting firm Delta Associates shows D.C. condo sales for the first quarter of 2008 significantly up from the last quarter of 2007. It's an interesting data point for both buyers and seller. Could this be the start of the long awaited pick up in D.C. condo sales? The second quarter of 2008 will tell. Read the full story in yesterday's Washington Business Journal by clicking here.
If I can help with your buying or selling needs in D.C. or northern Virginia, please let me know. I'd be glad to help!
The Virginia Association of Realtors recently put out their top 10 list of things consumers should know about today's Virginia real estate markets. My next ten blogs will share them with you.
"#2 - Overall, Virginia Homes Values Are StableFrom October 2006 through October 2007, the average price of a Virginia home has grown 4.3 percent, from $222,800 to $232,487. Yes, there are pockets in Virginia where home prices have declined -- largely due to unsustainable price growth in those markets during the past two years -- but even in those areas, generally speaking, homes are still worth more now than they were three years ago. Overall, since November 2004, the average price of a typical Virginia home has appreciated 42 percent, from $163,750 to $232.487 today. For details, see www.VARealtor.com/HomeSales."
I was surprised to read this, given all the media reporting these days. Not to gloss over the current valuation problems, because we do have them and I run into them almost every day. However, they are not pervasive in every neighborhood in northern Virginia. Some areas have weathered the storm much better than others. That's why it's hard to give a hard and fast rule when clients ask me "Generally, what percent under the list price should I offer?" Every market is different, which is why having a professional, full-time Realtor® like me working for you can make a big difference in helping you navigate today's confusing market.
Having clients make an informed decision -- whether buying or selling -- is what I'm all about. Contact me if you'd like to discuss your needs further.
"#1 - There's No Such Things as a National Real Estate MarketIf you read the newspapers, you might get the idea that real estate markets are the same everywhere. If conditions are bad in San Diego or Detroit or Miami, they must be bad everywhere, right? Wrong! Real estate markets are local; when you're looking to buy or sell, pay attention first to sale price trends, volume and inventory in your target markets or region, rather than to headlines about national sales trends."
This has been my experience as well. Clients come to me expecting the market to be in the tank because that's what they've read or seen on television. The Virginia market is down from its peak of 2005, but we are not the cheapest market in the country -- never have been, never will be. Don't get off on the wrong foot as you start your Virginia real estate journey. Learn what's going on in your market of interest, then see whether you can accomplish your goals against that backdrop.
Having clients make an informed decision -- whether buying or selling -- is what I'm all about. Contact me if you'd like to discuss your needs further.Sincerely,John
The February 2008 foreclosure data released by Realty Trac today shows one thing for the nation, and something different for each of the three local jurisdictions: Virginia, D.C., and Maryland. Read the full article in The Washington Business Journal.
Contact me at:Receptionist 703-522-0500 | Toll Free 800-760-7282Cell 202-549-0081 | Voice Mail 703-284-9457 | Fax 703-525-0387E-mail John.Mentis@LongandFoster.com | Web www.JohnMentis.comLong & Foster Real Estate, Inc. | Arlington Sales Office4600 Lee Highway | Arlington, VA 22207 | USA
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