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Bigger Houses Still the Rule

Date: Aug. 27, 2012
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Marketplace's Planet Money has an interesting graph showing that houses being built now are still surprisingly large. 

While it's true that you've been seeing articles saying home sizes are shrinking. And, that's true compared to, say 10 years ago. But if you look back, even to the 90s we're still living in enormous homes. 

My hunch is that the size keeps shrinking.

What's your hunch?

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Building Local

Date: Feb. 24, 2012
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Many of you will have heard about the 100-Mile diet, a diet where you eat only foods produced within a 100 mile radius of where you live.

Now some are moving beyond food with the locavore label. Why not build a house entirely of materials available within 100 miles of your location?

Imagine a house built without anything from China! It's been done.

Could you do it? Would you do it?

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Choose Your Facebook Friends Wisely!

Date: Dec. 27, 2011
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Time to cut off your friends who are deadbeats, at least on Facebook?

According to an article in the New York Observer banks are beginning to look at your social media interactions as one piece of your credit-worthiness.

If your bank asked for your Facebook login info as part of the loan application process, how would you react?

I think my friends make me look pretty good, but I'd still be tempted to take my banking business elsewhere. At least, assuming there will be banks who don't go down this road!

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Echo Boomers: No Thanks To Home Ownership

Date: Dec. 20, 2011
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How often have you heard the phrase "The American dream of home ownership" or something similar? An article in Forbes makes it clear that the Echo Boomers, the next generation of potential homebuyers, sees things differently.

I've talked before about what I saw in this group: closer ties to friends, preference for experiences over stuff and more ecologically conscience. They seem, in short, unlikely candidates for life in the suburbs, long commutes and trophy McMansions.

They are sure to change the future of the housing market.

 

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Culpeper Market November 2011

If you want it in a sound bite: Inventory is much improved. Sales stink!

Here are the details of the Culpeper real estate market.

Year over year the number of houses for sale is down almost 20%. That's terrific news! There are now fewer than 10 months of inventory at the current sales pace. That's getting pretty close to what's traditionally been defined as a healthy market.

You can, of course, find depressing stats as well.

The dollar volume of real estate sold this November as compared to a year ago is down 44%. That's a substantial number. The number of houses sold is down 36%.

But the average sales price is only down 8% year over year. Not nearly so gloomy.

The average days on market has actually improved. A year ago it took, on average over 3 months to get a contract on your house. Now that number is 79 days.

What happens next depends on several factors, including:

  • How many foreclosures are banks waiting to dump on the market?
  • Will Europe implode and drag us back into recession?
  • Will the unemployment numbers continue to improve?
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Moving On In

An editorial in the New York Times discusses a subject we've explored often in this space, the decline in the exurbs.

Remember that this is an editorial and not news. The writer has a stake in being right.

That said, I agree with most of what he is saying.

Local communities should take note. Our towns (Warrenton, Culpepper, Bealeton, Gainesville, Haymarket, etc.) are not set up to profit from this trend right now. We need more housing around town centers and more high paying local jobs that allow people to work where they live.

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Fauquier Market October 2011

Today we take a look at the October 2011 market statistics for Fauquier County. The beauty of statistics is that you can make them tell pretty much any story you want. And there's certainly that opportunity here!

What the ability to tell different stories should tell you first of all is that there's no dramatic story here. It's more like a muddled mess available to be shaped. Here are some of the elements you may find interesting.

Inventory is almost identical to last October. New listings are up 25% over a year ago. However, new contracts went up even more.

The average sales price is up 2.5% but the median sales price is down 5.5%. The number of units sold in October of 2011 is down about 18% from a year ago.

Sellers are ending up on average at about 90% of their original sales price when the do get the home sold which is taking about 4 months.

What is a buyer or seller to make of all this?

First of all, remember that October is typically when we begin to see a dip heading into winter when activity normally slows.

Second, there's nothing here that would indicate we're seeing any dramatic change in our local housing market. Steady as she goes.

Most importantly remember that this is a county wide look. Where you live in the county matters. The condition of your house matters. How you price your home really, really matters!

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HGTV Effect

Sellers and real estate agents are increasingly feeling frustrated by something that's been dubbed the "HGTV effect". In a nutshell, potential buyers who have watched way, way too much HGTV not only don't want to buy anything that's not pristine, upgraded, perfect, they don't even want to look at it. Even the Washington Post has written about this.

There is almost no market any more for fixxer uppers. The market left for those is investors looking to give you a lowball price that is likely to make the average seller gag.

If you haven't redone the kitchen complete with granite countertops, hardwood floors (or ceramic tile) and the newest and best appliances, forget it.

The dilemna for a seller is that if you pay to upgrade your house you will NOT get that money back. Yes, you'll get some of the investment back. But you won't come anywhere near getting it all back. On the other hand, at least you'll get people to look at your house!

My advice, start upgrading now even if you're not going to sell for awhile. At least you can get some enjoyment out of the upgrades!

Oh, and if you're a buyer and want a deal, look for the properties that need upgrading and be ready to do the work yourself!

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Tropical Storm Lee Loans

While Virginia did not qualify for FEMA grants based on the damage from Tropical Storm Lee, we did just get approved for low interest SBA loans for damage from the storm.

There are a list of named counties and municipalities includes:

  • Fairfax
  • Prince William
  • Fauquier
  • Loudoun
  • Stafford
  • Arlington
  • Alexandria
  • Fairfax (City)
  • Falls Church
  • Manassas
  • Manassas Park

Individuals living in those locations are eligible for up to $40,000 in loans to replace or repair personal property and $200,000 in loans to repair damage to homes (for homeowners). Loans of up to $2,000,000 are available for homeowners and non-profits.

The SBA will be setting up disaster assistance centers soon. The SBA web page is not yet showing the information for Virginia, but I'd watch their web site for more information as well.

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Rappahannock Market Update

It's been awhile since we've taken a look at the stats for individual markets. So we'll start with the smallest market today, Rappahannock, and then do Culpeper, Fauquier and Prince William over the next week.

The October, 2011 report for Rappahannock County shows mostly discouraging news. The total number of Active Listings is, in my mind, the most discouraging number with a total of 108 properties currently looking for buyers. Of the 6 properties sold last month, one third of them were on the market for over a year. The dollar volume of sales is down 58% year over year. The average sold price is down 44% year over year. Average days on market for the county is now 221, up 118% from where we were in October of 2010. The average list price and average sold price are both down over 40%. There's not much in the way of bright spots there.

The sole bit of good news I can offer is that, as usual in Rappahannock, the volumes are so tiny that it's almost impossible to draw many conclusions from a single month's data. Even year over year, volumes are just too small to compare two months and come to any relevant conclusions.

What I can tell you is that if you look at longer term trends, meaning several years worth of data, you see that average monthly sales are up from the depths of the recession. Now that only means that 6-8 houses sell in a given month rather than 3-4. But for those 3 or 4 homeowners, it makes a difference. Days on market remains high, but not as high as it's been. And, where once we were looking at around 3 years of inventory, at the current pace of sales it's more like 18 months.

There is no way to look at the data and suggest prices are better or firmer, although I suspect they're relatively stable.

If you're selling your home in Rappahannock County, make sure it's in excellent condition. If it's not, be prepared to discount it steeply and still wait a long time for the right buyer.

 

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Where's Your Buyer

Date: Sep. 26, 2011
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My colleague in Charlottesville, Jim Duncan, has a post on houses that don't sell, just because their buyer isn't currently in the market.

It's one reason why so many people want to be "the third real estate agent." (Old real estate joke. You're going to have to ask me privately!)

I think Jim's got it right, as usual. But it's a hard conversation to have with a seller. It's human nature to reject what you don't want to hear and I suspect most sellers will send you packing the first time they hear this. (And, maybe a few more times!)

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How Virginians Think About Virginia

I still can't figure out where this study or the underlying data comes from so don't make any big lifestyle changes based on this, but here's some information on how we feel about ourselves.

This survey asked people how they felt about their state in six areas: Natural Beauty, Things to Do, State Economy, Environmental Friendliness, Education and Medical Care. Here are the grades for Virginia:

  • Natural Beauty                      B
  • Things To Do                        B
  • State Economy                      C
  • Environmental Friendliness   D
  • Education                              C
  • Medical Care                         C

Overall, people seemed fairly pessimistic. That's not surprising given the overall economic gloom and doom we're all living with at the moment.

I do think Virginians were a little hard on themselves regarding the State Economy. While it may not feel this way (especially if your house is under water) our economy in northern Virginia actually looks pretty good compared to most of the country.

How would you grade us?

P.S. My home state of Minnesota fared pretty well!

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Robo Signings in Prince William

This article in the Washington Post talks about "hundreds" of robo signings in Prince William County over the past few years. The truth is, I'd be surprised if it were only in the hundreds given the number of foreclosures there. I suspect they've hit the tip of the iceberg.

I'm happy to see organizations like VOICE (Virginians Organized for Interfaith Community Engagement) working on this problem. Wall Street has plenty of lobbyists. Who's speaking up for the homeowner caught in the middle of this mess?

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Rents Expensive in Virginia

The National Low Income Housing Coalition has just come out with a report showing the affordability of rental housing by state. Virginia comes out looking pretty expensive.

In order for a single person to be able to afford rent and still stay within the guidelines advising total housing costs be less than 30% of income you'd have to make almost $20/hour. And keep in mind that that's the statewide average.

In Northern Virginia that means you need a lot of people helping to pay the rent. At minimum wage on average in Virginia you need 2.7 workers working full time to afford a 2 bedroom apartment. Imagine how many in the much pricier Northern Virginia suburbs.

If you think this issue doesn't impact you, you must not own a home or drive. Housing affordability drives people to commute longer distances to their jobs just to be able to afford a roof over their heads. The traffic that generates makes people who can afford it more and more inclined to live closer to their jobs. Guess what, most of their jobs aren't in Fauquier, Culpeper or Rappahannock counties. And, that, my friends, impacts the price of your home here.

Homeowners who want to sell some day should be very interested in solutions to both the affordability issues and the traffic problems in our area.

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Remembering Why I Blog

Date: Aug. 26, 2011
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I'm rereading some of my favorite parts of Seth Godin's Linchpin today. This particular quote reminded me of why I wanted to do this blog in the first place.

I don’t write my blog to get anything from you in exchange. I write it because giving my small gift to the community in the form of writing makes me feel good. I enjoy it that you enjoy it. When that gift comes back to me, one day, in an unexpected way, I enjoy the work I did twice as much.

Godin, Seth (2010). Linchpin: Are You Indispensable? (Kindle Locations 2880-2882). Portfolio. Kindle Edition.

If you haven't read this book, get it now! If I was still managing a team it'd be mandatory reading for everyone. (Although that doesn't sound particularly gift-like!)

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Emergency Homeowners Loan Program

Date: Jul. 21, 2011
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IMPORTANT information about the Emergency Homeowners Loan Program.

 

 

THE DEADLINE FOR PRE-APPLICATION SUBMISSION BY HOMEOWNERS AT RISK OF FORECLOSURE IN VIRGINIA AND WEST VIRGINIA IS TOMORROW, JULY 22, 2011.

 

 

 

EMERGENCY HOMEOWNER LOAN PROGRAM (EHLP)

 

 

HUD is administering $1 billion Emergency Homeowners Loan Program to provide assistance -- for up to 24 months-- to homeowners who have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition and are at risk of foreclosure.  The EHLP offers a forgivable, deferred payment "bridge loan" for up to $50,000 to assist eligible borrowers with their mortgage arrearages and payments on their for mortgage principal, interest, mortgage insurance premiums, taxes and hazard insurance for up to 24 months.

 

 

HUD has delegated key program administration functions to NeighborWorks America - an experienced and highly regarded national network of affiliated housing counseling agencies. Those functions include coordinating intake counseling, document preparation, and outreach.

 

 

 

West Virginia has $8,339,884 and Virginia has $46,627,889 to help struggling homeowners through EHLP.

 

 

Homeowners’ best course of action is to contact www.FINDEHLP.org or 855-FIND-EHLP (346-3345) to be connected with a local housing counseling agency assisting to administer the program. 

 

Housing counseling agencies funded through the Emergency Homeowners' Loan Program can provide information and assistance needed  to apply for the program. Pre-Applicant Screening Worksheets are due July 22, 2011.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Let's Go To The Fair!

The county fairs are starting up in a big way. Both the Fauquier County Fair and the Caroline Agricultural Fair start this weekend. And, just about every weekend for the next couple of months will feature multiple fair-going opportunities.

It's my favorite time of year! I can't wait to meet and greet the livestock, ride the rides and eat some great fair food. If you want to go take a look at this list of Virginia county fairs.

And if you want the best fair experience of your life I have to send you to my home state and the Minnesota State Fair. You'll see me there this fall and any year I can manage to get away!

 

Butter Head Sculpture - Minnesota State Fair from Ochen K. on Vimeo.

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Flying Off the Shelves

It's been a long time since I've seen my buyers having so much trouble finding houses to buy. In some areas inventory (high quality, well-priced inventory) disappears almost as fast as it hits the market. The western side of Prince William county, including Gainesville, Bristow and Haymarket fit that description. The southeastern side of the county, not so much.

But even in places like Bealeton and Remington, in the lower price ranges there is very limited inventory for sale and the good stuff goes fast.

There is an increasingly steady drumbeat of press articles around this amazing buying opportunity, that might be part of it.

Meanwhile, the many reasons sellers don't want to sell if they don't have to haven't changed, which continues to limit inventory.

So, is it a great time to buy? Interest rates are low, prices remain low (although beginning to edge upwards a slight bit) and those are good things. The lack of inventory and continued economic uncertainty would suggest continuing to proceed with caution. Every situation is different. But if you're staying put over 5 years, I like your odds of at least breaking even when you sell.

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A Sorry Mess

You're going to have to forgive me.

I usually avoid a lot of inside the real estate industry talk. This blog is meant to be educational to people interested in buying or selling homes or even just owning them. It's not focused on talking to the real estate industry.

Today is different.

NAR (National Association of REALTORS) has decided to raise it's dues in order to spend more money on its lobbying efforts.

Every citizen ought to be upset about this and the underlying causes.

As a member I am outraged and frustrated.

I completely understand why they've decided to do this. The Citizens United decision by the Supreme Court last year means there is now a no-holds-barred arms race in terms of political contributions. (There ought to be a sign outside the Capitol reading "For Sale Here: Legislators") NAR is concerned that banks, long wanting to get into the real estate business themselves (and not just as owners of foreclosures) could use this opportunity to get laws changed in their favor. They're worried about possible assaults on the Mortgage Interest Deduction and with what will take the place of Fannie Mae and Freddie Mac. Their solution is to have a pile of money with which to influence the outcomes.

I believe that the influence of money is destroying our democracy. Giving to the PAC (Political Action Committee) that REALTOR associations use to influence politics has always been voluntary and I have always declined, believing that it would be hypocritical to decry the influence of PAC money but become part of the problem when it seemed in my best interest.

Now it seems that my only options are likely to be let NAR use my money for purposes that I am ethically opposed to, or leave the National Association of REALTORs. The way the system works, that would make it much harder for me to work as a real estate broker.

This decision is not yet final and I'd urge anyone in the industry to plan on attending the NAR mid-year meeting in DC to protest this decision. The meeting on this is May 11th at 3:30.

For those of you not a part of the industry, I'd urge you to get involved in working to limit the influence of $$$s in politics. (Changing the Supreme Court make up would be a good start!)

I'm curious to know, if you're a real estate agent or broker what do you think? If you're a member of the public, are you concerned about the influence of money in politics?

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Worried about Nuclear Power Plants?

In light of what's been happening in Japan, some people are no doubt rethinking how close they want to be to a nuclear power plant.

Check out how close they are to where you live now and where you're thinking about living at this Greenpeace site.

Are you closer than you'd like?

We're 44 miles from Lake Anna.

I'm hoping the lesson learned from Japan isn't that if you're not near an fault line or a coast line there's nothing to worry about.

I hope we've learned that human brains aren't very good at predicting everything that could possibly go wrong and that failsafes often aren't.

 

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