Every month in this space I give you the statistics on what the market is doing in Culpeper, Fauquier, Rappahannock and Prince William counties. (With Warren thrown in occasionally!)

What I haven't really talked about is where this data comes from and what inherent flaws there might be in this data. It now seems like I'm overdue for that discussion.

Each month the data I use as the basis for my analysis comes from the Multiple Listing Service (MLS). The MLS that serves our area is called MRIS. The data in this system comes from what the agents input. They input their listings and they input the information when it gets sold.

So, here's the first weakness in the system, the human factor. People forget, get lazy, get busy, etc. It's the same problem with every system, anywhere, run by people!

There are brokerages that still don't list properties in the MLS. They are few and far between, but a few of them still exist. (By the way, if you really don't want your house to get sold, just keep it out of the MLS!)

Builders generally don't list every house they have for sale in the MLS. They'll list, perhaps, one of each model they have. So the MLS always understates the total inventory and seriously understates new construction inventory.

While many For Sale By Owner (FSBO) properties are now in the MLS, many more are still not, relying on the handwritten sign in the yard. Again, this understates inventory.

But for whatever flaws there are, the MLS is the best system we've got. It's as close as I can get to getting a total snapshot of the market at any given time.

There's an interesting article in Slate, the online magazine about the disappearing lawn. I thought this exerpt was particularly interesting.

Did you know that only 2% of homeowners ever challenge their property tax assessments? But the ones who do have a 75% success rate!

What if the dying inner cities of a generation ago will now be replaced by dying suburbs as gas prices soar? We're already seeing evidence of revitalized city centers and emptying suburbs full of McMansions. Temprorary blip or permanent restructuring?

A court in California ruled that the clause in a new home purchase contract mandating that disputes after settlement go through binding arbitration rather than court was "unconscionable" and therefore unenforcable. The court said it was unconscionable because of "oppression" and "surprise". According to the court "oppression arises when the parties have unequal bargaining power, leading to no real negotiation and lack of meaningful choice. Surprise may arise when challenged terms are hidden in a 'prolix wordy or long-winded printed form' drafted by a party in a superior bargaining position." I find the rationale in this as interesting as the decision itself. What does this say about builder's contracts in general?

Today I'm going to talk about March's numbers for Rappahannock county.

First of all, a note to those of you who may be new to this blog or to Rappahannock County's real estate market. It is a much, much different market than the surrounding counties. The volumes are very small and so, in some ways, these numbers are less enlightening.

That said, inventory remains static in the county with 71 homes currently for sale. As with surrounding counties, inventory is up from a year ago, although not by a huge percentage. In March of 2007 there were 66 homes listed for sale. There were 11 new listings added this month as opposed to 13 in February.

The big new is that 3 sales closed in March. There have been several months in a row now where that number has been 1. So, percentage-wise, a huge increase! I wouldn't read it as a trend just yet, however! But it is good to note that there were also 2 new contracts written. Those numbers still don't look as good as last year's. In March of 2007 there were 5 closed sales and 3 new contracts written.

Prices continue to drop, even in Rappahannock County. The average sales price a year ago was $460,000. The average sales price now is $411,667. That's a 10% drop in one year. It's lower than the surrounding counties, but still not good news to sellers. A reminder to take average sales prices with a dose of salt for Rappahannock. With volumes so low and prices all over the map, this is a statistic that is often fatally flawed. But, year over year, right now, it looks reasonably accurate.

While new construction is a very small percentage of Rappahannock County real estate, it is noticeable that the new homes inventory has dropped over 50% over the last year. There were 10 a year ago and there are only 4 now.

In Rappahannock County,  much of the action is in land sales. There were three of those last month. In general, smaller parcels seem to be moving a little better recently.

The Rappahannock County real estate market remains steady, slow and not significantly different than a year ago. If you're a buyer looking in Rappahannock County things have rarely looked this good!

Today I'm going to talk about March's numbers for Fauquier county.

There is very little difference between the numbers in February and March. The total number of properties for sale in February was 730 and at the end of March we showed 734 available properties. That, actually, is good news. Many other counties continue to show substantial increases in that metric. 140 new listings were added this month as opposed to 153 in February. Again, at least it's moving in the right direction. There were 56 contracts written this month and only 44 in February. This is the biggest change in the month over month numbers. The number of houses sold last month rose from 32 in February to 35 in March. Not a huge difference, but an improvement.

Again, I think it's much more telling to look at year over year numbers.

Unlike Culpeper County we have not seen an explosion in inventory over last year, although we are up. That 734 homes for sale number is slightly higher than 723. We see a lot less homes coming on the market 212 last year as opposed to 140 this year. Unfortunately, that's where the good news ends. The number of new contracts written has fallen almost in half, 94 a year ago down to only 56 now. The same story applies to closed sales. In March of 2007 there were 62 closed sales. In March of 2008 only 35.

Year over year it's hard to see any signs that this market is turning around. The flatter inventory numbers do give me some hope,  however.

Prices continue to drop. The average sales price in Fauquier county a year ago was $368,565. The average sales price now is $318,249. That's a 15% drop in one year. That's significant. There's no sign that prices are stabilizing either.

We're not seeing an increase in new construction listings. And, new construction sales are almost non-existent. There was 1 last month.

Overall, there's not much here to raise your hopes if you're a seller. But there is lots of continued good news for the buyers!

I'm a little late getting March's numbers out to you all. Blame the IRS! But now that taxes are done, it's time to dive into the numbers and take a look. I haven't done individual posts by county for awhile so I'll be doing that over the course of the next few days.

Today it's Culpeper.

The biggest difference between February and March is the number of new listings coming on the market. Last month there were 206 new listings. This month there were only 142 new listings. That would seem to be helpful to the total amount of inventory on the market but there's only a slight difference (February: 819, March: 802). The other notable difference is the number of sales which increased from 31 in February to 42 in March.

Those numbers are interesting, but the more interesting comparison is with what happened a year ago. Remember, real estate is very seasonal. Spring markets are very different from fall or winter markets. The best comparison is almost always year over year changes.

In March of 2007, a year ago, the total inventory was only 643, as opposed to the 802 we've got now. The number of new listing taken were 145, almost identical to the number in March of 2008, 142. The number of new contracts was also very similar, 54 last year, 53 this year. The biggest difference is the number of closed sales. That number was 52 in March of 2007 and 42 in March of 2008.

Year over year it's hard to see any signs that this market is turning around.

Prices continue to drop. Average sales price in Culpeper county a year ago was $328,013. The average sales price now is $288,017. That's a 12% drop in one year. That's significant. There's no sign that prices are stabilizing either.

One statistic that surprised me is that the total number of new construction listings are up. As more and more builders have slowed or stopped building, I expected a reduction in new construction listings. But a year ago there were 224 new construction properties listed and now there are 263.

But perhaps even more surprising is the number of new construction sales. 12 sold in March of 2007 and only 4 in 2008. Considering the terrific deals most builders are providing, that's surprising. If you're ever going to buy new construction, the deals out there right now may make this the time.

Overall, there's not much here to raise your hopes if you're a seller. Lots of continued good news for the buyers!

While there are many buyers who absolutely positively want new construction; there are others who are less enamored with new homes. One of the reasons could be an increasing concern with Indoor Air Quality (IAQ).

The EPA now says that the air quality in a newly constructed home can be 10 times more polluted than outside air! There are a variety of reasons for that and some of them can be avoided or mitigated if you're aware of the potential hazards up front.

New cabinets can be a major source of indoor air pollution through something called "outgassing". Basically, cabinets are often built using formaldehyde. That formaldehyde is then part of the cabinets and the fumes are released into your new home over many years. That "new home smell" that you're craving is actually a symptom of serious indoor air pollution!

Other sources of indoor air pollution can be new carpeting, paints and finishes on flooring. VOC's or Volatile Organic Compounds are the culprits here. They can have a variety of health effects and you should do your homework so you can make knowledgeable decisions for yourself and your family.

There are products available now that can eliminate or reduce these harmful gasses. One good source of information on Indoor Air Pollution in general is at the EPA.

Whether you're contemplating purchasing new construction or doing major remodeling at home, it's worth checking out.

I had a home inspection today on a new construction property that my clients are purchasing. And I was reminded of what a good idea to have an independent home inspector do an inspection, even on new construction. It's amazing to me how many people don't get this done.

This is not a question of whether or not you trust the builder. First of all, we're all human and fallible! This is a huge purchase and it's just good sense to have another, objective and experienced, pair of eyes take a look.

The best home inspectors will teach you things about your home that the builder will not. It's not that the builder doesn't want you to know these things. But they have homes to build and sell and it can take time to explain why your new furnace could use some additional metallic tape to keep potentially combustible gases from your water heater from being drawn in! A good home inspector spots these little things and will talk you through what you should be doing to protect yourself and your home.

A good inspector will know what is code in a particular jurisdiction and can catch things that the builder missed. The buyer is probably not an expert on local building codes and shouldn't be expected to be. Sometimes your realtor may know a lot about local codes as well. But a home inspector is likely to catch the nuances that can make a difference to you now and in the future. They can catch things that could prevent you from getting your occupancy permit in the time frames needed for settlement. And they can catch items that could come back to bite you when you go to resell the property in a few years.

A builder will not recommend a home inspector. They often view them as nuisance. But a smart buyer will always get a home inspection, even on new construction!

It's time to talk about buying new construction.  A large number of home buyers like new construction.  And, what's not to like?  Once you walk into one of those beautiful models, decorated impeccably nothing else ever looks quite as good!

But from my perspective it's never good news when a buyer says they want to buy new construction. My clients who buy new construction are most likely to end up unhappy with the transaction.  And since the vast majority of my business comes from referrals from satisfied clients that's very bad news for me.  Even worse from my perspective I'm less able to control almost any aspect of the transaction in new construction. That starts with a contract written by the builder to protect the builder's interest. That contract is different than the standard regional contract used in this area.

Many builders are very good at over promising and under delivering. My only way of controlling this is working to properly set my clients' expectations.  That means telling them to not take as gospel truth dates the builder gives them on when they will move into their new home. In the typical new construction purchase I deliver an awful lot of bad news! While it's part of my responsibilities to my client, like every other normal human being, I hate delivering bad news!

Buyers of new construction are buying it because it's new and they have the expectation of perfection when they walk into their newly completed home.  That's pretty much never the case. Let's face it, builders and the people who work for them are all human beings and fallible and I've never seen a completely perfect home from any builder. Some builders are very good at taking care of whatever problems arise.  But an astonishing number of them are not. Again, I've now got an unhappy client and very little control over satisfying them.

Part of my reluctance to sell new construction is no doubt due to the fact that I'm a control freak.  I know that repeat business and referrals depends on the quality of the experience of each and every client. In every transaction there are things I can't control.  But I work hard to minimize that and to implement quality control of everything else!

So, I'd be happy to help you buy your next home, even if it's new construction!  But, don't say you haven't been warned about the potential for a bumpy ride!