CBS news makes it official. Manassas is the hot place in the region for getting a real estate bargain!

And, no wonder! There are currently 324 properties for sale in Prince William county for less than $100,000. That's incredible when you consider the prices just a few years ago.

And, while the rental market has softened as the economy has softened and the inventory has risen, it hasn't softened so much that you can't make a profit at those prices!

For those who say housing prices have to fall alot further this year, I'd say, not in Prince William! Obviously I'd be an idiot to declare a bottom, especially with so many economic difficulties still ahead. But if this isn't a bottom in Prince William, we're awfully close!

And, in general, I see some firming up of prices in this area. Note I did not say I see any appreciation. And I don't expect any this year. But it seems like some kind of bottom is in the process of being established. Depending on what happens with the rest of the economy it may or may not hold. But for now, there is reason for optimism.

While bargain hunters have been avidly focused on foreclosures and, to a lesser extent, short sales; another segment of the market also offers some spectacular bargains.

Builders who have inventory already built want to get rid of that inventory quickly. In this area, builders haven't been building spec homes for some time now. These homes are generally homes where a contract fell through. Occasionally, you'll see a model home for sale where the builder has finished building in that subdivision.

These homes can be tremendous deals. Builders don't want and usually, can't afford to sit on inventory. It ties up cash they need to pay off loans and move forward with other projects. And, so they're typically priced attractively to start and an even better deal can be negotiated.

Unlike typical new construction, these homes may have the basement already finished. And you're likely to see a fair number of upgrades already included. And, if you don't like exactly what you see, don't be afraid to ask for what you want. While they're not going to gut the house and redo it to suit your taste, there is probably room for some changes.

True, there aren't as many of these bargains as there are foreclosures. But you also don't have as many of the problems as arise with a typical foreclosure. The odds of you settling on time and being in your new home when you expect to are exponentially higher with new construction. You're likely to receive an answer to your offer much more quickly. And there's much less likelihood of last minute deed problems.

There are still builders with inventory in most local counties, including Fauquier, Culpeper, Prince William and Loudon.

If I was a buyer in the market to buy, I'd be looking for some of these gems.

How will 2009 play out? I can only speculate. In truth, this feels like one of the toughest years to predict. But I am undaunted! I'm going out on that limb to make some predictions.

I need to preface my predictions with a word about the overall real estate situation. There are two possibilities in 2009. The government could intervene in a meaningful way in the real estate markets. (Other than the Fed action earlier this month to say they’ll buy mortgage backed securities, federal intervention up until this point has definitely been NOT meaningful!) If they do that, the forecast, while not rosy, is for a market that’s beginning to stabilize. The other alternative is that the federal government does nothing about the real estate markets, the overall economy continues deeper into decline and there’s no end in sight. That produces a markedly more pessimistic forecast.

I'm going to take a moment today to acknowledge that this is my 400th blog post here! I've enjoyed every minute of it and have learned more than I would have thought possible!

It's been fun hearing from you. All of you are the reason this blog exists. The purpose remains the same now as it was at post number one. This is here to give you, the consumer, more access to information on real estate in general and on the Fauquier (Warrenton), Culpeper, Prince William, Rappahannock and Warren county real estate market.

The occasion of the 400th post is prompting some reflection and analysis and watch for some adjustments going forward that will hopefully make this blog even more relevant.

And, because I wanted today's post to have an upbeat feel, here's an article on what I believe is ultimately a very positive sign for the real estate market overall. Work outs for troubled mortgages have not been happening in anywhere near he numbers they need to. This points to better systems and processes to make that happen.

And, one more milestone occurs later this week. Next weekend I'll turn 50!

YeeHaw!

The April numbers are finalized.  I did a sneak preview for you about ten days ago, before the numbers were official. And, the picture hasn't changed much.

In every county, the pattern is the same. Inventory has risen again, as has the number of new listings. After a dismal month in terms of sales in March, April looks better, both in terms of new contracts written and sales closed. But the number of houses sold is not keeping pace with the new listings coming on the market.

Fauquier, Culpeper are each showing about 16 months of inventory. Warren is looking worse at 24 months. Prince William is in the best shape at only 9 months. Rappahannock, being a special place, has about 3 years worth of inventory. But, again, the numbers generally don't give a very realistic picture of Rappahannock.

The more interesting comparison, of course, is year over year. Since real estate is very seasonal, that's always true. In general, inventory is higher than it was a year ago and sales are slower. There are some exceptions, but it's too soon to say if those are a blip or a true change in market conditions.

No bottom in sight would be my reading of current conditions. There is nothing to suggest we've turned a corner. (Although I remain hopeful that I'm wrong!)

This is an interesting map tool showing various non-prime mortgage stats in a US map format. You can choose the kind of information you want, enter the zip code you're interested in and see the detailed info.

The map is courtesy of the Federal Reserve Bank of NY. Given that, I tend to think the information is pretty reliable.

The good news is that we don't appear to be in particularly bad shape. I looked at some of the hardest hit zip codes around, including Prince William and Culpeper, and didn't see anything that looked particularly ugly.

Wouldn't it be nice if it felt that way!?

The Senate is busy debating the Foreclosure Prevention Act of 2008. It's an important bill and one that has the potential to have a very large impact on the real estate market. It's worth taking a closer look at some of these provisions.

The bill covers these items:

• Increased FHA Loan Limits
• Assisting Communities Devastated by Foreclosures
• Providing Pre-Foreclosure Counseling for Families
• Enhancing Mortgage Disclosure
• Assisting Veterans In Danger of Foreclosure
• Property Tax Deduction
• Mortgage Revenue Bonds
• Help for Homebuilders
• Tax Credit for Purchase of Homes in Foreclosure

I'm going to talk about two provisions today that I believe could significantly help our market. One is the Tax Credit for Purchase of Homes in Foreclosure. This would provide a tax credit of $7,000 for buyers of homes in foreclosure or pre-foreclosure. The credit would be taken over two years. This could only be used on owner occupied homes, not on investment properties.

This could provide a significant incentive to buyers to get back in this market. It would also help to start providing a floor to price declines as the number of foreclosures on the market would likely decrease faster.

The down side to this is if you're a homeowner who is selling your home and you're not in foreclosure. You would definitely seem to be at a significant disadvantage!

The other provision that has the potential to make a huge difference is the Assisting Communities Devestated by Foreclosures provision. This would be available to communities hit hard by foreclosures and would provide Community Development Block Grant Funds to allow purchase of foreclosed homes. Those homes culd then be rehabilitated or redeveloped by the community. They could be used as workforce rental housing, or eventually resold. Perhaps partnerships could be established with organizations such as Habitat for Humanity.

What we don't know is which local communities would be eligible for this assistance. But, again, this could help enormously with bringing down inventory and stabilizing prices. I'm hoping that, at a minimum, Culpeper and Prince William Counties would be eligible.

The prospects for passage look good at the moment, at least in the Senate. And, I suspect in an election year the House will be even more interested in getting this one passed!

If you've got questions on some of the other provisions, let me know and I'll get you more information.

Saturday's Washington Post carried a story about foreclosure activity that primarily looked at Prince William county. As the story makes clear, things are pretty bad in Prince William County. The number quoted in the article is that 5.5% of the homes in the county are in some phase of foreclosure.

I took a look at RealtyTrac, a web site that specializes in providing foreclosure listings. It shows 3204 homes in Prince William County in foreclosure out of 5573 homes currently listed for sale. It says an additional 881 homes are in pre-foreclosure. And 1932 homes are up for auction. Some of those auctioned homes are likely to be foreclosures, although certainly not all of them.

To give you a feel for the rest of the area, Culpeper County has 137 properties in foreclosure, 20 pre-foreclosure and 97 up for auction. That's out of 819 listings.

Fauquier County has 111 foreclosures, 2 pre-foreclosures and 93 properties up for auction out of 730 listings.

Rappahannock County has 4 foreclosures, 0 pre-foreclosures and 6 properties to be auctioned.

Warren County has 0 foreclosures according to RealtyTrac, although I seriously doubt their data on this county. There are 4 in pre-foreclosure and 73 listings to be auctioned.

The January numbers are out and there's more good news to report. This is starting to feel and look like more than an anomaly. (Knock on wood!) But there are still danger signs as well. Let's talk about all of it.

Culpeper county continues to see inventories decline. Actually across the board we're seeing declines, but perhaps most significantly in Culpeper. This is the lowest we've seen inventory in a year. And, while closed sales were down in January, the number of contracts written more than doubled. A good sign going forward. Given how busy I am with both buyers and sellers the past couple of weeks, I believe we'll see an increase in contracts again in January.

Here's the bad news; new listing jumped back up. New listings in December were 91. New listings last month were 161. Year over year, we're holding steady. In January of '07 we saw 165 new listings. Expect that number to increase again in February. Again, my personal experience with new listings coming up would seem to confirm that.

In Fauquier we saw many of the same trends, but dialed down. Inventory decreased very slightly, from 703 to 699. Inventory still remains above where we were a year ago. As in Culpeper, sales were down, contracts were up. New listings jumped significantly. By the way, this is not unusual. Especially in a tough market, it makes a lot of sense to beat your competition to market. And the spring will likely see a flood of new inventory.

In Prince William all the above trends hold with no significant differences.

Warren County is clearly still struggling. Inventory is down only slightly. New listings increased almost threefold and while new contracts increased, it was not by much. 

Rappahannock County seems to be looking a little more anemic right now. But the volumes are so tiny in Rappahannock that you'd be in sane to try and determine trends from such scanty data. There were no new contracts written and only one sale last month. Inventory decreased very slightly and the number of new listings doubled from the month before.  It'll be interesting to see how the spring market unfolds here.

So, let's see what the increased activity I'm seeing now does to these numbers next month!

The real estate market was front page on the Washington Post again yesterday. And, there are a couple of interesting lines that say a lot about our local market here.

2007 is behind us and the December numbers are now available. And there's plenty of good news. In every county I looked at, inventory continued to decline. Culpeper moved down to 783 homes for sale. It was at 796 last month. And, at its high hit 823.

Culpeper is representative of the surrounding counties. Rappahannock, Prince William, Fauquier, even Warren, all saw reductions in inventory. I'd like to say it's a trend, but given the circumstances it's still too early to say that. November and December in an average year will see a reduction in inventory as people take their homes off the market during the holidays. If January and February numbers continue to show a decrease I'll officially declare a trend!

We also saw fewer new listings across the board. Again, good news if it continues. With spring coming this is one I think we can safely say is not a trend. That's especially true if we look at year over year numbers. A comparison between December '06 and December '07 shows a sizeable increase in the number of new listings.

The number of new contracts and solds was down across almost every county with the exception of Prince William. That may have something to do with the fact that Prince William is showing some of the most aggressive price cutting.

I also compared the new contracts and solds to a year ago. In Culpeper we're significantly lower, in Fauquier close to breaking even. And, while Prince William is up month over month, it's down year over year.

All in all, December was a mixed bag. As with most statistics, we'll have a better idea what they mean a year from now!