As you're making plans for your weekend, don't forget to stop by one of the local farmers markets. Here's a list of some that I've been frequenting:

Nokesville Farmer's Market - I just discovered this one but already love it. Hours are 8 to noon on Saturdays. They take "local" seriously at this one. All vendors are from Prince William or Fauquier Counties.

Warrenton Farmer's Market - Great excuse to get into old town Warrenton. This is their 33rd year. See them downtown Saturday's from 7 a.m. to noon or on Wednesdays out on Lee Hwy from 7 a.m. until 1.

Culpeper Farmer's Market - At the corner of Main and Commerce every Saturday from 7:30 to noon. I've been very impressed by the great selection of heirloom vegetables here!

Clevenger's Corner Farmers Market - This is the newest addition having just opened last Friday. This is at the intersection of 211 and 229 in Amissville. They're open Fridays and Sundays from 4-7 p.m. for all you non-morning people!

And...I hear there will be a new one in Sperryville any day now! More to come on that.

If you've got others you'd like to see mentioned here, jump into the comments and let everyone know!

The Culpeper numbers showed a healthy jump in sales year over year. I've been wondering what made up those numbers and so decided to do some additional analysis.

38 out of those 57 sales were foreclosures. That's two thirds of those sales.

While an increase in sales and a decrease in inventory always qualifies as good news, this probably doesn't warrant throwing a party to celebrate the end of the real estate downturn.

What this means is that two thirds of those homes sold at very steeply discounted prices. Here are a couple of examples:

This home was purchased brand new in October of 2005 for $345,000. It sold in June as a foreclosure for $149,000.

This home was purchased new in November of 2006 for $448,000. It sold in June as a foreclosure for $230,100.

Those are discounts of 57% and 48%. I analyzed 10 of these foreclosure sales. The average discount from the original sales price was 48.8%.

If your the guy who lives next door and you want to sell your home, how do you compete? Most homeowners can't or won't sell their home for half of what they bought it.

So, yes, it's good news that more homes are selling and inventory is shrinking. If they sell all the foreclosures, there's less downward pressure on pricing.

But right now, if you have to sell, be prepared to price your home very, very aggressively. The competition is based on price and it's vicious!

One quick note, I'll be in the Wildwood Forest subdivision in Amissville this Saturday afternoon from 1 to 3 p.m. If you've got a question on the real estate market in general, your home in particular or just want me to look into my crystal ball, let me know. I'm bringing free cloth shopping bags for everyone I talk to. Give me a call at 540-270-2742 if you'd like to chat while I'm in the neighborhood!

The official June numbers have been released for this area of Virginia. Let's take a look, by county, at what they have to tell us.

First, Culpeper County. Compared to a year ago, inventory is down (732 now vs. 784 then). New contracts written have jumped (61 now vs. 47 then) and we see the same thing with solds (57 vs, 31). It's all good news! The only thing we see that isn't positive is that we're still adding new listings at a faster clip than I'd like. There were 130 new listings in June, compared to 113 a year ago. Still, when you look at year over year numbers, this is some of the best news we've seen in awhile.

Fauquier county presents a more mixed picture. The great news is Fauquier is inventory. A year ago we were looking at 865 homes on the market. Now we're down to 753. That's a 13% reduction in inventory. Good news! And the trend seems likely to continue. There were 128 new listings this month compared to 171 a year ago. The mixed part is the number of contracts and sales. There were 61 new contracts written this month compared to 65 a year ago. And 67 homes sold compared to 65 a year ago. Those aren't terrible numbers, but they're not telling as good a story as the other numbers.

Prince William County is where things are really hopping! This is the best news of any jurisidiction. And it follows the nationwide trend of this housing recovery happening closer to urban centers. Inventory is down from a year ago (5501 vs. 5703). But look at the contracts written and the number of solds! 987 new contracts were written in June. Compare that to last June when there were only 454. That's an increase of over 100%. And the solds tell a similar story. The numbers in June were 834 vs. 456 a year ago. The number of new listings is also decreasing 1448 now vs. 1539 in 2007. There's not a spec of bad news to be found in Prince William! Anecdotal evidence supports this. There are numerous examples of not only quick sales, but multiple offers on the most attractively priced properties.

Rappahannock remains in its own little world! Inventory is up from 79 to 85. New listings are almost identical to a year ago (17 now, 16 then). New contracts are down from 7 a year ago to 4 now.  Solds are exactly the same at 4. In other words things remain much the same in Rappahannock County.

This is the most positive report I've seen in a long time. There's no way to look at these numbers and not be optimistic.  I'm going to go out on a limb here and say that in Prince William County they may have seen the bottom. We won't know for sure until at least 6 months from now, but it's possible.

By the way, if you're a seller that doesn't mean you can raise your price! The properties priced CORRECTLY FOR THE MARKET are selling. There are still plenty of them sitting there!

When I want to show a listing to a buyer, I use a lockbox to enter the house. Typically, in this area (Prince William, Fauquier, Culpeper, Rappahannock and Warren counties) that generally means an electronic lockbox that often looks like this:

To access this box and get the house key out, I use an electronic device that's been updated with a special code within the last 24 hours. It's an extra level of protection for the homeowner in case my "ekey" is stolen. Within 24 hours it's essentially worthless unless you know my passwords in order to get it updated.

The other advantage of this lockbox is that I know who has shown my listings. If something is missing, left unlocked, etc. I likely know who to track down to ask about the problem.

There have always been a few holdouts who still used combination (combo) lockboxes:

These boxes require only an alpha or numeric code in order to open them and access the key. If I know the combination I could, theoretically, give that information to someone else and that's all they'd need to access the keys to your home. It's a less secure method of access. The advantage in some agents' eyes is that if someone from outside our area wants to show the house, there's no problem if they don't use the same lockbox system used in this area.

With the large number of foreclosures in our area, we're seeing a big increase in the use of these combination lockboxes. Most banks will mandate that a combo box be used on their listings. I've had trouble coming up with a good reason for this. The only thing I can think of is that they want bank personnel to be able to access the property if necessary, without a real estate agent present.

I was troubled this week to learn that a local agent had mentioned that if he's unable to show a home when his buyer clients want to see it and he can't find any other agent to cover for him, he'll simply give his clients the combination and let them go in the house on their own.

Hmmmmm! The number of reasons this is a bad idea is very long. The liability to the agent should anything go wrong, is huge. It could be that his clients are good people with the best of intentions but they have trouble getting the keys back into the lockbox. It happens all the time. It is, of course, highly unprofessional and, I'd suggest, unethical. The listing agent should definitely be making a phone call to the agent's broker at the very least, to protest this behavior.

By the way, when the agent was confronted with what a bad idea this was the response was "Everybody does it." I never got that one by my Mom. And, I'm not buying it now!

There's a constant refrain here. And, I know I sound like a record stuck in a groove. But May numbers continue to reinforce that we've still got too much inventory.

Culpeper County shows we're only eight units off where we were last year at this time. The good news is that sales jumped substantially this month. And, I'm not using month over month comparisons, but year over year. Both new contracts and closed sales took a big jump. But that pace is going to need to continue for months in order to start to see the reduction in inventory we need in order to stabilize prices.

In Fauquier County last year at this point in time we hit our highest number ever for inventory. Unlike Culpeper, we've come down substantially. A year ago there were 867 homes for sale and now it's only 764. The contracts written and the sales closed are both also up, if not quite as much as in Culpeper.

Prince William County actually has a large increase in inventory. While contracts and sales are up, the increase in inventory means no firming up of prices there any time soon. Since Prince William County is one of the hardest hit counties in Virginia for foreclosures, this will likely take some time to resolve itself. But bargain hunters are out there.

Rappahannock County remains a place apart. The market is almost exactly where it was a year ago. Days on market are longer there as well, inventory is higher than it was several years ago. But it's a very different market than what we're seeing in the other three counties.

Our numbers reflect the national numbers pretty well. New contracts are up across the nation. The numbers you hear from NAR and from most of the national media are primarily comparing May, 2008 to April, 2008 and of course the numbers are going to go up. The more meaningful number is always year over year.

We've got some good signs out there. There are buyers out there. They're looking for bargains. They've got the right market for it.

Let's face it, the MLS is not always the buyers' friend. On short sales and foreclosures especially, but even on a substantial number of other listings, there are often no photos. Sometimes there will be one or you'll get the property with photos of only the exterior and the land.

That's a shame in many ways. Buyers want to see photos. With gas prices what they are, it's very helpful to be able to screen properties without having to drive to every one.

It's also a shame for the sellers, in all honesty. Buyers in most cases will simply bypass listings without photos. Photos of a place that doesn't look all that great are still almost always better than none. That's because buyers will usually assume even worse things in their imaginations if there are no photos. And, if what they'll see when they get there is likely to cause them not to buy it, why not eliminate them up front. Do you really want people tromping through your home who won't be interested in buying it?

So, a local real estate broker, Frank Borges Llosa, has taken matters into his own hands. There's a new MLS, that looks at the world from the buyer's point of view. The idea is to ask agents to photograph and comment on vacant homes. These comments and photos will be added to the MLS data that's already available.

It's a terrific idea and I've already begun contributing. I'll be selecting homes to work on based on several criteria. First, I'm interested in the property! Secondly, input from clients, customers and blog readers that they'd like me to check out a specific property. And, third, I'll start closer to home and work my way outwards. That means I'll start with listings in Culpeper, Fauquier and Rappahannock counties.

Let me know if you've got a property you'd like me to take a look at! And, continue to watch http://www.FranklyMLS.com for more updates.

There are interesting things happening all over the country with green/sustainable building. But here's one I especially like!

Why not marry sustainability and affordability? Here's an article on what one guy is doing.

I can't think of any reason something similar couldn't be done in Fauquier, Culpeper or Rappahannock counties!

It's time to tell another story about a specific local house!

This house is located in Amissville in Culpeper county on a quiet country road. As with many local properties, it was once part of a larger farm. And, in fact, one of the things I love about this house is the old farmhouse that is at its core.

It's been nicely renovated in ways that allow you to still see the original and it's special character. The second floor is all hardwood floors, a very rare thing these days, but fairly common in 1940 when this house was originally built. It sits on just under 2 acres with some nice fencing.

There are 4 bedrooms and 2 full baths. The kitchen is modern and large with lots of light. It's got that great front porch and some beautiful mature trees. In short, there's lots to love about this house.

For horse people, there's adjoining pasture that rents pretty cheaply. ($200/mo.)

The house sold in December, 2004 for $314,000 with a $9000 subsidy to the buyers to help with closing costs. It was on the market for 127 days before selling. In 2004, that was actually a long time. And, at that point in time the $9000 help for the buyers was also unusual.

It next sold in May of 2007. This time it was on the market for 292 days before being sold for $360,000.

It's back up for sale now. It's been for sale for 86 days. It was originally listed at $349,900 and is currently listed at $299,900. It's a short sale this time around, meaning that the owners owe more to the bank than the home will sell for. The possibility of foreclosure looms if the property does not sell.

If the home sells for full price (unlikely in this market) it will be 17% off the highest sales price. That's a little less than the price declines we've seen overall in Culpeper County.

I believe, overall, this home is a pretty good value in this market. Part of why it's lingering at this price is the fact that it's a short sale. Real estate agents are reluctant to show short sale properties. There are a number of reasons for this, including a lengthy/complex process that frustrates their clients and usually produces a smaller paycheck for them.

It may also be sitting because of the new home that's being built nearby. While there's enough distance between them that it's not intrusive if you're a city person; people moving out here often want no sign that neighbors even exist!

Still, for someone with horses and not a big house hunting budget, I think this has a lot of appeal.

Surrounding sellers will no doubt be unhappy with the low price on this. If this sells for under $300K, and it ultimately will, many surrounding properties are clearly overpriced. Or, at least, that's what potential buyers and appraisers are likely to think!

I saw this article on Friday, but I hate to go into the weekend on a bad news note! So, I saved it for Monday! Just what you needed, right?!

There are still buyers out there. There will always be buyers out there!

The pool is small and you're going to have to knock yourself out to get them to your house. And, if they're not coming to your house, it's over priced!

And, this article from the New York Times will probably interest buyers and sellers. The numbers here are national. (Our local numbers are worse.) But I think the letter to sellers is a good idea. Sellers, given the inventory in Culpeper, Rappahannock, Fauquier and Warren counties, I don't think I'd try the letter to the buyer. They really do have all the cards right now!

The Fauquier Times Democrat had an editorial this week that was right on the mark. This is a great opportunity for local governments to address affordable housing.

The editorial talks about what's being done in Prince William and Fairfax counties. The Prince William model may work better here. But maybe there's a third way.

I'd like to see a public/private partnership between Fauquier County and Habitat for Humanity. The two groups together could certainly do more than either group could on its own. And, while I mention Fauquier County here, because that's what the editorial addressed, this solution could just as easily be applied to Culpeper.

There's a growing inventory of vacant homes in the area. These vacancies hurt all existing homeowners. And, there's a huge pool of potential home owners that have been driven out of the market because of lack of affordability.

Seems to me there are potential solutions here for everybody!

There was a story in yesterday's Culpeper Start Exponent about a couple in Culpeper county who are losing their home to foreclosure. It's just one of the many painful stories out there. This couple is right in saying they're not alone. Not even close!

The article also briefly discusses where the foreclosures are concentrated. As you'd expect, most of them are in the recent developments in Culpeper. Lakeview, the largest of those developments, is the hardest hit. But the other new developments along 522 aren't far behind.

I've been pretty dismissive of much that comes from NAR's chief economist's office. While Lawrence Yun is certainly been much more realistic than his predecessor, he's still too often been a cheerleader rather than an unbiased source for information. It's understandable given who signs his paychecks!

But his latest analysis of what's going on nationwide with home prices is very educational and, I think, gets it mostly right.

Locally, prices continue to decline. But given the sudden increase of activity in the last couple of weeks, I suspect there's some chance we may be getting close to a floor in some areas. (Probably not Culpeper!)

I saw today that a TV station in Charlotte, NC did a story on how the real estate market is increasing the numbers of homeless pets. As families are forced to leave their homes they often can not take their pets with them. Sometimes that's because they have to move into a rental that won't accept pets. Some families are moving in with family members and the home can't accomodate any more pets.

I've got calls into the local shelters to try and get a feel for whether we're seeing that same effect here locally. My suspicion would be that we are.

If you're thinking of getting a pet it's an excellent time to check out the local shelters. Here are links to some of them.

Rappahannock

Fauquier

Culpeper

Warren

Too many pets end up here in the best of times. In hard economic times it gets worse. If you can adopt a pet or just help them out with a donation, now's the time.

It's time to go out on a limb! With the new year fast approaching, I'm going to give you my version of what to expect in 2008. I am humbled before I even begin by looking at some of the weightiest minds in the industry and how their 2007 predictions worked out. Dr. Steven Fuller is one of the most knowledgeable real estate gurus in the greater DC area. But he was way off base in his optimstic 2007 predictions. But then I remember Mark Twain's quote about economists "If you laid all the economists in the world end to end, they still couldn't reach a conclusion." So, how badly could I do?!

I'm going to start with what I see overall for our area. Then I'll single out a couple of counties for some specific comments.

First of all, I see no huge market swings in either direction. There will be relative stability, although not the kind most sellers are looking for.

Prices - In our area we'll see some additional price declines. There are two ways to look at price declines. If you look at sold prices, which is how this statistic is usually generated, the decline will be larger. That's because while a large number of homeowners have already significantly lowered their prices, those homes generally haven't sold yet. As they sell, we'll start to see that really reflected in the statistics. But a lot of that decline has already happened. There are specific neighborhoods where the word hasn't quite gotten through yet and prices will need to fall more. If you're looking to buy, make sure you ask your real estate agent about overall market statistics for that specific neighborhood.

If you look at the average list price, I don't believe you'll see huge drops. Again, much of that price cutting got done in 2007.

Volume - I expect this number to be only slightly better than 2007. Any larger influx of buyers will have to wait for greater overall economic confidence. My prediction is that we won't see much of that in 2008.

Inventory - Flat initially, a big jump in early spring, and then a gradual decline the rest of the year. I believe we'll end 2008 with inventory slightly lower than in 2007. I'll really go out on a limb here and say that I see a much larger inventory reduction in 2009.

Interest rates - I know there's a lot of hope out there that mortgage interest rates will drop significantly and bring hoards of buyers out. The economic indicators I see don't lead me to believe there will be much if any drop in interest rates in 2008. Inflation worries seem likely to continue to plague us all year. That doesn't mean I think we'll experience huge inflation. But it will worry the Fed and other policy makers and that means not much relief on interest rates.

A couple of special notes. These predictions are what I see for the counties where I do most of my business: Fauquier, Prince William, Warren and Loudon. The other two counties I serve, Rappahannock and Culpeper are deserving of special note.

Culpeper county will suffer for a very long time. The overbuilding in Culpeper county is the stuff of legend. We'll still be talking about this 20 years from now. Unfortunately, prices will continue to decline deeper and faster here than anywhere else. Unless there is a huge new employer in Culpeper County very soon, we're looking at several more tough years.

Rappahannock County is on the other end of the spectrum. Since construction is almost non-existent and since it remains a highly desirable location for many people, the real estate market has generally been more stable. We've seen some softening in this market too, but I don't expect much additional softening in Rappahannock. The biggest factor affecting the market here right now is the credit crunch and I believe that situation will improve significantly in 2008.

There's my prediction. What do you think?

It's been a little while since we've peeked in on the South Wales community and so I thought we'd take a look at what's happening there. Big picture numbers are interesting, but really, even at a county level they can be pretty meaningless.

When I originally pulled up the active listings for South Wales I got a pleasant surprise. The inventory volume is the lowest it's been in well over a year. There are currently 13 homes for sale.

The number of active listings here has been hovering around 18-20 pretty consistently for the past year. So 13 is definitely good news.

The next question is, what happened to the other listings?

Well, I'd like to tell you the reduction in inventory is due to all the sales happening in South Wales. But that is clearly not the case. In the last three and a half months only four homes have sold.

Interestingly, given the discussion on pricing in yesterday's blog, one sold for a net (after giving closing costs to buyers) of $365,000. Consider that the lowest sale price in there during the last quarter of 2005 was $530,000. That's a price drop of 31%! By any measure, that's substantial!

Six homes have been withdrawn from the market in the last few months and not relisted. If you add those six back in the total actives go right back to 19, about where they've stood all year.

So the real question is, have those sellers truly given up? Will they be back on the market in 2008?

The really good news for South Wales is that none of the current listings appear to be bank-owned or short sales.

There's always a silver lining!

The New York Times has an interesting map showing the percentage of subprime mortgages by county throughout the US. I took a look at the rates for this area and the good news is that it could look a lot worse!

Here are some of the rates:

Fauquier County: 24%

Culpeper County: 33%

Rappahannock County: 21%

Prince William County: 33%

Warren County: 29%

Loudon County: 22%

This puts us in pretty good shape relative to some of the hardest hit states, such as Florida, Nevada and California. And, some of the counties with the worst numbers are in places where they did not experience the extraordinary surge in home values.

It's also not much of a surprise to see Culpeper and Prince William Counties among the hardest hit. In Culpeper especially, I expect there's still a lot of pain to come.

It's been a good week! I've gotten two offers on two different properties, one of which has already culminated in a ratified contract! That's definitely a good week!

One property is in Bealeton in Fauquier County and the other is in the town of Culpeper.

These properties share those critical qualities; they're aggressively priced and they show beautifully! The owners in both cases did everything they could to help get this done.

Only time will tell whether either of them actually go to settlement. You never know for sure until you sit at the settlement table and sign the documents. The two issues I'll be watching most closely are the appraisal and the financing. Either of these could derail this contract.

And, we'll have to wait and see whether the other offer ultimately results in a ratified contract. It's not dead yet!

All of this is proof again that there are buyers out there and it is possible to attract them.

That's good news for all of us to take into a weekend!