NAHB Estimator

The National Association of Home Builders (NAHB) has recently come out with a tool that is supposed to estimate the value of your home. There are starting to be quite a few of these tools, none of which I've found to be all that accurate so far. But this is clearly a technology in its infancy and I believe, given enough time, they will get more accurate. Although it's hard to see how they'll ever account for things like the functional obsolescence of an avocado green bathroom! And, if you build in a questionnaire about the overall condition of their home, everyone's instinct is to rate their home a little higher than the average unbiased observer would!

But I'm straying from my subject. While the NAHB estimator is not necessarily a good place to find out what your home is worth, it has value in helping determine what adds and detracts from the value of your home. It asks questions like is there an abandoned building within half a block of your home and whether there's bothersome trash nearby. It's good to get a feel for how these can potentially impact the price of your home.

Now the only problem is you've got to go talk to your neighbor about that trash!

Just a note that I had to modify the macro security settings in Excel to get this to work.  Medium or low will work, it just won't function on high.

The site, if you'd like to check it out for yourself is http://www.nahb.org/estimator

Have fun!

Existing Home Sales Numbers

The existing home sales numbers for December were released this past week and we now have a complete picture of the 2006 year. If you're a seller, it wasn't pretty. But then I'm probably not telling you anything you don't already know! 

2006 saw the steepest drop in the number of homes sold in 17 years! That's a pretty tough market. If you sold your home in 2006, congratulations! If you bought a home in 2006, congratulations! If you tried and failed to sell a home in 2006, if it's any comfort, you're not alone!

In spite of those abysmal sales numbers, the price of homes, nationally actually rose by about 1.1 percent. I'm sure you're wondering about those numbers and I'll admit there seems to be a mismatch! Here's some of what I think is going on.

First of all, the calculate what's happened in pricing using the prices on homes that actually sold. In a down market what sells is typically the homes in pristine condition. And, they typically hold their prices better than the rest of the homes on the market. In addition, remember that all those people whose homes are on the market and who've lowered the price $50K and still haven't seen a buyer, are not even showing up here. I believe the 2007 numbers will actually show a further price decline, but that most people in our market won't feel it as much because it will just be a documentation of what's already happened. If you're a seller and you lowered the price of your home substantially, you've already mentally and emotionally taken that hit, even if it doesn't show up in the statistics yet.

As always, all real estate is local. That 1.1 percent is a national average. If you look at the numbers here locally they definitely tell a more dramatic story. We flew higher than most at the peak of the market and we're suffering more than some now. The greater northern VA area shows sales prices for 2006 down a little over 4%. As you get further away from the beltway that decline is steeper.

The National Association of REALTORS, along with several large builders says they've seen the bottom of this market. That may be true, but I don't think we'll know for certain until about May. I'll be watching to see how many homes come on the market and how many buyers show up to buy them.

Whatever 2007 brings it will still likely be a somewhat challenging one for sellers. And we may be nearing the end of the best negotiating opportunity buyers in our area have seen in many years!

As the data begins to appear, you'll see it here!  So stay tuned. RSS feeds are now enabled so you can make sure you don't miss anything!

If you'd like to read the MSNBC story on the December numbers, here's the link:

http://www.msnbc.msn.com/id/16806979/from/ET/

A Really Idiotic Bill

The VA Association of REALTORS helped to defeat a bill in the VA Senate that would have waived the current 180 hour educational requirement for a broker's license if an agent had been in the business at least 5 years.

This is one of the most absurd proposals I've heard in a long time! In a profession that is already woefully remiss in requiring enough education the state senate was talking about making the situation worse! It's hard to see what the motivation would have been for such a move. Surely the consumer doesn't win by weakening the standards. The 180 hours is already laughable considering that my hairdresser needs 1500 hours to become licensed!

There is also a bill moving through the house to strengthen the continuing education requirements for agents. This was a bill that was crafted by the industry because most of us recognize the need for more knowledgeable agents. The consumer deserves it and we certainly prefer working with others who know what they're doing. Unfortunately, the house has already watered down the requirements. So, while we're likely to make some progress, in the end it won't be as dramatic as we'd hoped.

I'd urge each of you to support legislation that increases the education required before an agent helps you with one of the largest financial transactions of their life!

Option ARM Lawsuit

Last week there was a ruling by a federal judge that may have a larger impact in the mortgage industry. A couple had refinanced their home using an option ARM. They paid a ridiculously low rate of 1.95% which they believed was locked in for five years. In truth, the rate went to 4.375% after only two months and continued to rise. However, the payments stayed the same even as the interest rate increased.  So, in effect, even as they made monthly payments, the total amount they owed the bank actually increased each month.

The judge ruled that the disclosures provided to this couple were confusing and unclear and thus violated the Federal Truth in Lending Act. The ruling was narrowly written and at this point in time only covers refinancing. But now that the barn door is open, expect to see additional suits that broaden the scope.

This particular ruling was against Chevy Chase Bank in Maryland. But there are many, many lenders who have made these loans. Many of them will be adjusting their policies as a result of this ruling.

The big lesson here is that no one should ever sign loan documents without completely understanding what it is they're getting. Don't ever hesitate to to make people stop and fully explain what it is you'll be paying both now and in the future and how it impacts the balance of your mortgage. If you've already signed documents that put you into a mortgage that you're now uncomfortable with, explore your options.  But be aware that many of these exotic loans have prepayment penalties attached as well.

Carefully choosing your lender is a good start to avoiding these kind of problems. If you're looking for a good one, go to my web site http://www.JulieEmery.com and click on "Local Partners" near the bottom for some of the people I highly recommend. Or give me a call at 540-341-3541 and we can discuss your particular situation.

In my opinion, no house is worth a mortgage that will give you sleepless nights down the road!

What's Out for 2007

In my last blog I talked about what's in for 2007, based on a recent article from Realty Times. Today I'll summarize the most interesting points about what's out in 2007. Again, if you're thinking about any remodeling plans for 2007 this information may be useful.

Bedrooms not large enough for a bed - During the hot sellers market there were a lot of people creating tiny bedrooms in order to increase the selling price of the house. "It's not a three bedroom! It's a four bedroom! And, now I'd like an extra $50K for my home!" Of course if the only thing small enough to sleep in there is your dog it's not much use! Bedroom sizes are starting to look more normal again.

Loads of glass upper kitchen cabinet doors - While it looks beautiful in the models, the reality is that most of us aren't organized enough to keep it always looking great. And, it turns out that people who hate washing windows aren't that fond of washing an additional bunch of them in a room that tends to produce a fair amount of grease and grime!

Bowl-shaped above-counter bathroom sinks - These turn out to be very messy and a pain to keep clean and neat. Nice to look at but not practical seems to be the verdict on these.

Any shiny metal finish - Brushed nickels and pewters are in and antiqued and polished brass is out.

Stainless steel refrigerators and dishwashers - They look cold and they're high maintenance.

Spiral staircases - Baby boomers knees don't like stairs in general and definitely don't like these. They're unfriendly to kids and pets.

Also heading for the "out" list:

Bamboo floors - They are eco-friendly. However they turn out to not be very durable. They are easily dented and scratched and prone to warping from humidity.

Laminate floors - They don't handle multiple sandings well.

I hope this is helpful as you plan for the year ahead. If you're thinking about selling your home in the next year, visit my web page at http://www.JulieEmery.com for more information on getting ready!  Or give me a call at 540-270-2742 and let me help you plan ahead!

What remodeling plans are on your list for 2007?

What's In for 2007

A real estate news company called "Realty Times" recently came out with their list of what's in and what's out for 2007. While some of the items are probably not interesting to most of you, there are some items on the list concerning homes that may be of interest if you're contemplating any major or minor remodeling projects in 2007. And, some items are just interesting as marks of how society is changing. Today I'll let you in on what's in. My next blog entry will cover what's out.

What's In:

Third places or officetels - While there are more and more home offices in our homes, not everyone wants or is able to work there. Sometimes we need a little more social interaction. Sometimes we need a little larger distance between us and the distractions of home, but still without the hours long commute. So there will be more in between places where you'll be able to rent short term offices, cubicles or conference rooms. You can see this locally in Vint Hill where you can rent a cubicle with high speed internet connections for those days you just can't face that long ride into Northern VA or DC.

Upscale garages - These days people are looking for garages with cabinet and storage systems, mini-refrigerators and, of course, fully finished with heating and air conditioning. Now even our cars live better than the homeless!

Two home offices - One isn't enough any more as there are more and more families where both spouses are telecommuting for at least part of the week.

Caving - This is space devoted to one person in the household where they can go and play without being disturbed.  Think crafts room or workshop.

Rejuvenation Rooms - In case you wondered how the other half lived! This is a one-stop space for exercising, meditation, yoga, sauna and fancy steam showers. And, if that's not enough, even the showers are going upscale. There are now waterfall fixtures, programmable temperature and water flow controls are what's "hot" now.

Heated patios, walkways and driveways - Having been born and raised in Minnesota, this has strong appeal to me. I wonder if Dad would have gone for the heated walkway to the barn?!

Snoring Rooms - These are now being offered as options in some new homes as a way of restoring harmony in marriages where the night noise has gotten out of control!

Modular Housing - Modular options and quality are different from what most of us remember. They now encompass everything from a 1200 sq. ft. starter home to an 11,000 square foot monster!

Sustainable Design - This is near and dear to my heart. This is based on three areas; energy conservation, indoor air quality, and resource conservation. My hunch is this will be big with future generations who are growing up much more concious of our impact on the earth.

Structured Wiring - This is now entering the main stream and is becoming a must-have for technology based home buyers. Coax TV cable (RG-6), Category 5E voice and data lines, distributed radio and remote camera security are all wired through the home into multi-outlet boxes called, in the trade, home network centers.

Mixing finishes on kitchen base and wall cabinets. Everything matching is soooo old school! The new look has stained-wood base cabinets and painted wood upper cabinets. This may be an acquired taste!!

Watch this space for news next on what NOT to do to your home in 2007!