It's always interesting to find someone who isn't caught up in the crowd and parroting whatever the conventional wisdom is. Ben Stein, I think, has it about right in this Yahoo column.

Ben says he's a buyer in this real estate market! (Although I'm betting a thoughtful, selective buyer!)

Maybe this will become the new conventional wisdom?!

The real answer to that question is, of course, that no one knows. There are some positive signs out there, but it's too soon to say if they're a trend or a blip.

But based on a current client situation, I'd have to say it hasn't happened yet.

I'm working with a buyer client who's also a licensed agent in a neighboring jurisdiction. This client is buying a home with other family members and there's a lot of nervousness about the future of property values in this area.

Here's the thing. This is a licensed agent. Agents get that this is cyclical. They get that if you're planning on staying in your home for many years (which is the case here) you're highly unlikely to lose any money. And, yet... there's a tremendous amount of concern.

We'll know the market has turned around when the agents aren't worried about buying!

This proves it's easier to be dispassionate about any market when it's not your money involved!

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!

The Virginia Association of REALTORS has an excellent blog. Their CEO, Scott Brunner, has written a very interesting post highlighting some recent media stories. I very much appreciate our state association's willingness to look at the facts rather than to always spin the data and dispense happy pills!

John Tuccillo was once the chief economist for NAR, a position currently held by Lawrence Yun. I continue to find John's insights some of the most accurate and enlightening out there.

This post on his web site goes through how we got into this mess and what John sees as the prospects going forward. I think it's one of the best analyses I've seen.

One of the most interesting pieces of this is the third point about how large national home builders began to replace family businesses and how they're driven by different economic realities. It's a piece of this puzzle I hadn't heard before and I think it's right on.

I'll be interested in hearing what you think; what John's gotten right and where your opinion differs.

I ran across this interesting article on when the real estate market is likely to turn around.

I believe he gets it mostly right. One thing I don't believe he adequately factors in is the likelihood of intervention by the government. That could help significantly help reduce the number of foreclosures. That, of course, would push this whole cycle forward a little faster.

Is the government really going to intervene? Well, now that they've bailed out the banks there is certainly increased pressure for them to intervene on the behalf of individual home owners. Clearly that whole moral danger they were worried about was much less of a factor once push came to shove. But at the heart of this crisis is the individual home owner and the banks will continue to be in trouble as long as the foreclosures continue to rise.

The above article gives you some key benchmarks to keep an eye on. The benchmark I'll be watching most closely here is the inventory levels.

One of the blog posts I ran across today is very interesting. The bottom line is that mortgage applications have steadily risen in the last six months and that there's some reason for hope in this.

Now, first of all you should know that the vast majority of those applications were to refinance. Very few of them were to purchase a home. However, many of them were people refinancing out of ARMs. To the extent that homeowners are able to do that, we are likely to see fewer foreclosures and short sales going forward.

In my opinion, there is nothing more likely to put a bottom on this market than an end to the flood of foreclosures.

This would suggest that 2008's market might be a little more vigorous than we thought. And I'm certainly seeing more activity on lower priced listings in Fauquier county. That hasn't spread as much to some of the surrounding counties; not yet anyway.

I've got my fingers crossed that these numbers continue through the year. A little good news in the depth of winter is always a welcome thing!

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!

For some odd reason there seems to be a class of real estate pundits out there who believe that a potential recession is a good thing for the real estate market.

It's an odd line of thought. But I understand their logic. The belief is that if the economy continues to look like it's headed for recession the Fed will have no choice but to lower interest rates. Lower interest rates will get all those buyers who are currently sitting on the sidelines to jump in and buy a home. And, voila! the market improves.

There are some serious logical flaws in this argument. First of all, even with some data suggesting the possibility of recession, the Fed's in a tough spot. While they'd no doubt like to lower interest rates to bolster the economy, there are also plenty of worries about inflation. Oil hit $100/barrel this week. Rising oil prices impact the prices of almost everything in our economy. It's hard to see how continued high oil prices aren't inflationary. And, food prices are rising fairly rapidly. While this is not included in most official measurements of inflation, it is certainly something that will be watched by the Fed. So, maybe they cut interest rates. Maybe they hold steady. There's not enough data to provide an answer right now. And, the truth is you never know for sure until the Fed meets.

Secondly, as I've mentioned here before, a lowering of rates by the Fed is no guarantee of lower mortgage rates. Again, inflationary worries often have more of an impact on those rates.

Next, recessions are not good for real estate! People insecure about their financial prospects do not go buy new homes! If you're worried about losing your job you don't look to move up. You look to hold on to what you've got. Time to batten down the hatches!

And, lastly, there is no quick turn around for real estate. And, that's certainly true here locally. There are not enough buyers waiting on the sidelines to completely turn around this market in the short term. It took time for us to dig the hole we're in. It will take time to fill it back up! I'm hopeful we'll see a bottom in 2008. Anyone expecting much more than that has got some serious rose colored glasses!

There's an article on the Times Community Newspaper's web site regarding Rappahannock County and growth, or rather, the lack thereof.

It's an interesting piece and it makes a good place to jump off to a discussion about why the real estate market is so different in Rappahannock County.

While this county has also seen a slowing in the market, the effect is more muted here. Since there was never quite the "boom" you saw in surrounding counties, there's not likely to be the same level of downturn here either.

As this article points out, while Culpeper was the fastest growing county in the region with Madison and Fauquier not far behind, statistics suggest that the population growth in Rappahannock County is actually negative. While John McCarthy points to a small increase in population, what I've seen suggests that most of those additional people are weekenders and not full time residents. I don't believe there are any numbers available on the percentage of the population that are full time residents vs weekenders, but I suspect that the trend is for more part-timers.

All of which contributes to a very different real estate market. Average days on market can often be longer in Rappahannock County. But you see less variation over all. The prices are a little less "squishy" than in surrounding areas. There's less elasticity of demand, in part, because people who are selling second homes rarely feel the same pressure for a quick sale that someone does who's selling their primary dwelling. Most people don't have to sell in a hurry so they can get to the next house, job, etc.

Meanwhile, the debate about growth does continue in Rappahannock County. But John McCarthy is right in that no one is looking to turn this into the next Culpeper in terms of growth!