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Rents Expensive in Virginia

Sep. 15, 2011
Categorized in: Workforce Housing

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.

Where We're Going

Jun. 19, 2010
Categorized in: Local Market Conditions

We're a restless bunch in this country. If you want to see where we're coming from and going to, Forbes just published this great map using IRS data.

It let's you look at a specific county and see where people are coming from and moving to in that county. It's a fun map and I'm going to spend a lot of time playing with this one.

The one thing I notice after looking at this for a little while is that most of the movement is very local, within Virginia. You don't see huge migrations in Fauquier, Culpeper or Rappahannock either from or to other states. Now look at Prince William or any of the more traditionally "northern Virginia" counties. Lots of movement both from and to many other states.

Now think about the real estate implications. Generally, looking at this map you'd expect to see more turnover in inventory in Prince William than in Culpeper, Fauquier or Rappahannock. And, you'd be right!

Area Still Growing

Mar. 28, 2010
Categorized in: Local Market Conditions

There was an article in the Washington Post this week that talks about the region's population growth. The good news (if you're looking to sell your home) is that this region continues to grow.

The area grew 3% in the last few years. That's faster than any place else on the Eastern seaboard.

It gets more interesting from my perspective when you look at the local populations trends.

Every local county, except for Rappahannock has continued to grow. We're not seeing the big population jumps that we saw in 2004 and 2005. But the trend is definitely slow but steady growth.

Culpeper County has grown the fastest in the last decade. It's 35.7% growth between 2000 and 2009 make it the 17th fastest growing county in the nation.

Fauquier County has grown at 23% over the same period. And, if you look around you notice that there aren't as many new subdivisions in Fauquier. (Not that there aren't still plenty!)

Rappahannock actually lost about 1% population over the last decade. The county continues to hover around the 7000 mark. It's hard to see anything changing that in the short term. It wouldn't surprise me to see Rappahannock at almost the same population a decade from now.

Prince William County grew almost as fast as Culpeper. The 34.8% growth rate also made it one of the fastest growing counties in the country. Prince William County benefits from the proximity to DC, VRE access and lower housing costs than the inner suburbs. In fact, while growth in Culpeper and Fauquier has slowed considerably since the 2004/2005 time frame; Prince William County is growing at almost the identical rate now as then. Buyers trying to buy in Prince William County have definitely noticed! New construction has definitely not kept pace with that kind of growth.

The continuing influx of new residents will eventually begin pushing prices up again at a faster clip. I don't predict any return to the craziness we saw in the last bubble. But there's also clearly no reason to expect a second drop in prices in this area.

 

Short Sale Success Stories

Mar. 14, 2010
Categorized in: Foreclosures/Short Sales

Admit it. You saw the title of this blog and thought "no way"!

I understand that kind of thinking! Short sales are hard. I talk about that all the time on this blog. But it's time to look at some success stories. Hard doesn't mean impossible. And, it doesn't mean you should avoid a short sale like the plague.

Here are the stories of three sellers and their successful short sales.

Note: Success is defined here as the clients believe it was successful and they achieved what they wanted from the short sale.

The first story is a young couple with a house in Bealeton. They were upside down on the house and their interest rate was about to reset. They would be unable to afford the new payments. They wanted to preserve their ability to rebuild their credit and buy again in the future as their family grew. They were one of the early short sales in this area. It took time, but the short sale was approved. They had great credit before the short sale and did everything they could to maintain that afterwards. Now, nearly three years later they're once again in a position to talk to a lender about buying a home.

Another young couple owned a townhouse in Remington. They bought it just before they got married. Their growing family had made the townhouse much too small for them. They initially rented out the townhouse. But when the renter stopped paying, decided it was time to try a short sale. Not only did the short sale get approved and the deficiency forgiven. The lender in this case actually gave the sellers a small check after the sale. Even more important to this couple, their credit has been almost unaffected. I can't guarantee it'll work this way for everyone. But they saw only a 1 point reduction in their credit score.

The third short sale is a townhouse in Culpeper. The owners were transferred out of state. They initially rented the townhouse out. But the rent they received didn't begin to cover the mortgage. When the tenants moved on, they decided to try a short sale rather than go to foreclosure. Their goal was to avoid a foreclosure and it's greater damage to their credit. This one took almost a year. It featured four different buyers, six different lenders and required the patience of Job! But in the end, these sellers also succeeded.

If you are upside down on your mortgage and don't know what to do, you owe it to yourself to at least discuss the possibility of a short sale.

 

2010 - A Forecast

Jan. 12, 2010
Categorized in: Local Market Conditions

Let's start with the look at the larger economic picture. As always, it will play a major role in what happens this year with local real estate.

While the Fed continues to keep money cheap (I closed a deal at the end of the year with interest rate under 5%) that can't last forever. If the real estate industry and economy seem to be doing well mid-year we may start to see some adjustments upwards in rates.

I expect lending to remain very, very tight. Your credit will need to be very good and/or you'll need a hefty down payment in order to buy a house this year. Because of these conditions, I expect to see more USDA Rural Development mortgages in 2010.

The jobs picture is likely to remain gloomy throughout 2010. It will be less gloomy in the greater DC area, but the angst that goes with those high unemployment numbers will remain and will continue to impact people's willingness to buy homes.

The majority of sales are likely to be short sales in 2010. There are plans in the works to make the short sale process easier and faster. I have my fingers crossed that they will work!

It's going to surprise a lot of you to hear that one of my biggest worries about 2010 is a lack of inventory! Who'd have guessed a year or two ago that that would be possible!

But Prince William County is down to only 4.5 months of inventory. That's technically a strong seller's market. Culpeper is at 7 months of inventory, a balanced market. Fauquier is at 9 months. Rappahannock has what looks like an astonishing 16 months of inventory, but things continue to work a little differently there! I expect inventory in Prince William County to stay about at current levels in 2010. Culpeper and Fauquier are likely to shrink further. Rappahannock should be down to 12 months of inventory by the end of the year.

Here's the problem with the inventory situation. Banks have additional inventory, but they're holding on to it and releasing it more slowly. They don't want any further depression of prices because that kills their bottom line. And, with the bailout from the government and the cheap money they're able to borrow from the Fed, they don't need to dump them in a hurry. So, we'll continue to see foreclosures hit the market but only in dribs and drabs.

That leaves the rest of us homeowners as potential sellers. Most homeowners have seen a tremendous amount of value wiped out on paper and aren't anxious to realize that loss by selling and locking it in. I can't say as I blame them. Of course, the underlying assumption there is that if I hold on another year, or maybe two, I'll get a lot of that value back.

Is that true? Will 2010 be the year we see a spike in home prices? We've certainly already seen some price increases in Fauquier and Prince William counties. Culpeper still shows a year over year decrease as does Rappahannock county. But yes, I think we'll see small price increases in all four counties in 2010. Just don't expect to get back to 2005 prices for a long, long time! Expect 5-8% price increases this year.

The big unknown this year in my mind is what the buyers will do. If the economy, and by economy I mean unemployment, improves significantly, I think we see a big increase of buyers and those price increases could get a lot larger. But I'm not optimistic about the jobs outlook. And, I think buyers remain relatively scarce. Look for the volume of transactions to be flat in 2010. And it wouldn't surprise me if there's actually a small decline.

I expect the DOM (Days on Market) for properties to shrink slightly simply because of the lack of inventory. Those homes priced right and in great condition will continue to sell relatively quickly.

The summary is that 2010 is going to be another year of trying to get solid ground underneath the real estate market. It will be another year of slow, painful climbing out of the ugly market we've had. There are bright spots and there's certainly the potential for happy surprises. But I'd hang on for another bumpy ride if I were you!

2009 Year in Review

Jan. 4, 2010
Categorized in: Local Market Conditions

As we head into 2010, let's start by looking backwards into 2009 and see how my predictions fared.

First of all, it's clear to me now that years from now we'll look back and see 2009 as the year when the real estate recovery really began to take hold, at least in this part of Virginia. That doesn't mean that the prospects are entirely rosy going forward, but the contrast between 2008 and 2009 are simply incredible.

Whereas the big story in 2008 was price drops, the big story this year is price increases, year over year, across the board. Whether you're talking about Culpeper, Fauquier, Prince William or Rappahannock County, prices are up year over year. Now bear in mind that's after several years of steep declines. And these increases are very modest, in the single digits. On prices, I was too pessimistic, anticipating another year of falling prices. I've never been so happy to be wrong! I predicted a price decline of 10% with that primarily coming on properties at the $400K and above price point. In reality, the only place we saw any price weakness was at the very high end of the market.

Inventory declined dramatically. I got this one partially right in that I predicted a continued decline. But it's been more rapid than I expected. Inventory in Culpeper is down 20% year over year and we're now at 11 months of inventory. Still a buyer's market there but better than a year ago.

In Fauquier County the decline was 21% but we're down to only 8 months of inventory. And in both counties, quality inventory at the lower price points is scarce and snapped up quickly.

Prince William County had an amazing decline of 37% in year over year inventory! We're now looking at only about 4 months of inventory here and it's clearly a seller's market in every way except price. But we'll get to that.

In Rappahannock County, after an unexpected inventory surge late in the year, we've started falling again. The November numbers show us pretty much flat, year over year. But preliminary December numbers show a December drop off. Some of that will be sellers deciding not to bother having their homes on the market over the holidays. But some of that inventory will not be coming back.

And now for the volumes. This is the area where I was probably the most off. I predicted 640 homes would sell in Culpeper in 2009. In fact, even with the tax incentives that number was only 595, the exact same number as in 2008.

In Fauquier I predicted that 645 homes would sell in 2009. I was conservative there, with 675 selling a significant increase from the 600 in 2008.

Prince William made me look especially inept, with only 7825 sales as opposed to my forecast of 8800. In my defense, the miserably small inventory kept a lot of would-be buyers on the sideline. That 7825 is actually a decrease over the roughly 8000 sold in 2008. It's a troubling trend.

All in all, my performance as a prognosticator was mixed. I was too optimistic in some areas, not optimistic enough in others and got it just about right in a few.

Despite my lack of perfection, I'll risk looking foolish again later this week with my 2010 predictions!

 

 

 

We're in The Money!

Sep. 1, 2009
Categorized in: Foreclosures/Short Sales

I wish I was writing to tell you all I won the Mega Millions this last week. No such luck! But Fauquier & Culpeper county are a little richer thanks to the Neighborhood Stabilization Program. Fauquier County was awarded $1.5 million. Culpeper got $1.2 million. The money will be used to buy, rehab and resell foreclosures in neighborhoods hard hit by the real estate downturn.

In Fauquier that means the southern end of the county. In Culpeper think Lakeview for sure.

I got one thing wrong in my earlier blog about this. I thought it would be too late in the process for them to get the money. They met the deadline but given the money already awarded and the competition I really didn't think Fauquier & Culpeper would get any.

It's too soon to know if I was right about my other reservation. The foreclosures are getting fewer and fewer and almost always involve bidding wars these days. It'll be interesting to see what the counties are actually able to purchase with this money.  There are plenty of short sales, just not so many foreclosures these days.

The Other Good Deal

Feb. 24, 2009
Categorized in: New Construction

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.

Looking Ahead to 2009

Dec. 30, 2008
Categorized in: Local Market Conditions

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.

 
My forecasts here are based on scenario A, because I think that’s the likeliest outcome at this moment. The Obama administration appears poised to temporarily halt foreclosures. During that time the expectation is that measures will be put in place that would help prevent many foreclosures. Although whether it would prevent them permanently or delay them, it's hard to say.
 

 

Inventory, while declining in 2008, remains high for all counties by historical standards. But we’ve come down significantly from our highest point. The high point for inventory for most counties was mid-2007. (Rappahannock just hit their high.) At that point we had about 18 months to 2 years of inventory at the rate properties were being sold. Our inventory at the end of November (the last full month for which data is available) is down about 30% from our high point. Preliminary December data shows that number to still be falling. However, the rate of sales has also slowed so that we still, essentially have about a year and a half worth of inventory. There’s very little quality inventory at the lower price points, say, under $300K and what there is sells quickly. Above that price point things are very, very slow.

 
I expect inventory to continue to fall in December and January and then begin to climb in late February again. Some of this is normal. Typically spring and summer are when most people put their homes on the market. 2009 is likely to be the same as any other year in that regard. The thing to watch will be whether you see additional buyers coming out to buy up that extra inventory. I’ll also be watching what happens at price points above $300K and what prices are doing overall. And, if we do get a sharp increase in buyers, expect that to be followed by an even sharper increase in inventory as "shadow inventory" from frustrated sellers comes back on the market.
 
Prices are likely to stabilize this summer. (Again, this is assuming government intervention.) However, I would not expect any significant appreciation in 2009 or 2010. Prices will likely stay flat for several years. The lower part of the market will see the first price appreciation. Most sellers of owner occupied (meaning non foreclosures) will still have to lower their asking price in 2009. Average sale price has fallen roughly 40% in the last year. I’d expect to see a smaller decrease in 2009, perhaps 10% with most of that coming on properties over $400,000.

 

 
The total number of sales in 2008 in Fauquier County will be about 600, down from 630 in 2007. I believe that number will climb in 2009 to 645. In Culpeper, expect the 2008 number to be just below 600 and the 2009 number to be about 640. Prince William will close at about 8000 properties sold in 2008. Look for that to climb to 8800.
 

 

As with any projection, there are a multitude of factors that could make me look silly. The biggest factor impacting the real estate market next year will be foreclosures, the overall economy and what, if any, government intervention occurs. If I knew how all those would turn out, I'd be too rich to bother with selling real estate!
 
Here's to good fortune and happy lives to all in 2009! 

 

 
 
 
 

 

 

400 and Counting

May. 27, 2008
Categorized in: Local News

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!

3rd Annual Alternative Energy Expo

May. 16, 2008
Categorized in: Green Building

There's lots to talk about today.

Saturday, in Warrenton, is the third annual Alternative Energy Expo. It runs from 9:30 a.m. to 4:30 p.m. at the Fauquier County Fairgrounds. Admission is $5. If you've been thinking about making your home and/or your life more "green" this is a great place to get ideas, talk to people who can help and get inspired! It's bigger and better than ever this year!

Most of you should have received in your mailboxes this week a circular called "Northern Piedmont - Buy Fresh - Buy Local". The Piedmont Environmental Council sent this to residents of Culpeper, Fauquier, Orange, Madison and Rappahannock counties. In it you'll find a guide to buying almost everything you eat locally from produce to meat, from farmers markets to CSAs to buying right on the farm. Great publication!

The WSJ has run a couple of very interesting real estate articles this week. First up was an article called "As Dues Dry Up, The Neighbors Pay" about how as no one is paying the HOA dues on vacant/foreclosed houses, other homeowners are having to swallow large increases in dues. It's another things buyers need to take a careful look at prior to buying.

The other article in WSJ was "Will Upgrading Your Home Help You Sell It?" and the results are clearly mixed. In a declining market I'd always argue that while you want your house to shine, you should never put in expensive upgrades. This article has some interesting details.

April Numbers

May. 14, 2008
Categorized in: Local Market Conditions

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!)

Prince William Foreclosures

Mar. 23, 2008
Categorized in: Local Market Conditions

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.

 

 

Auctions Come to Our Area

Feb. 26, 2008
Categorized in: Buyers

Up until now we really haven't seen the large auction house auctions of many foreclosed homes all at once. They've been happening pretty regularly in places like Florida and California. But in this area we'd see a home here or there that was auctioned, but not much in the way of large groups of homes. That appears about to change.

Tranzon is a Richmond, Virginia company that operates real estate auctions in a large number of states. And on March 6th local homes and land start to show up in a bigger way. There's an auction in Fairfax that includes homes and land in both Fauquier and Culpeper counties. If the inventory situation gets a lot worse, expect to see more of these. If, on the other hand, there's a significant market improvement this spring and summer, this could be a relatively rare event.

Auctions can bring good bargains. But if you go in unprepared you can also find yourself carried away by the bidding frenzy. You'll need to come prepared to pay $10K cash on the spot if you are the winning bid on a property. You'll need to plan on closing within 30 days with no opportunity for home inspections and no contingencies.

You also need to know that there is normally a buyer's premium that's added to the winning bid price, probably around 10% to pay the auction house. Make sure you've budgeted for that.

Most auctions companies do pay commissions to agents. And, it makes sense to have an agent help you do the homework to determine what comparables have sold for and what the property's potential is. Also note that in many cases, there are dates ahead of the auction when you can look at the property and get an better idea of what you'd be buying.

It's a different way to buy a house, but there can be advantages. Personally, I have to say I hope we're not going to see a lot of these events in 2008!

January Numbers

Feb. 11, 2008
Categorized in: Buyers

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!

 

In Sunday's Washington Post

Jan. 21, 2008
Categorized in: Local Market Conditions

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.

"The distance between a neighborhood thriving or struggling through the current market can often be measured in a few miles and in proximity to good schools and public transportation, real estate agents say. Communities closer to the District with fewer new houses continue to fetch higher prices, they said."

There it is, the prescription for a strong local real estate market. Excellent schools, proximity to public transportation and a small amount of new construction.

I hope politicians are paying attention. Short term fixes are not the way to go. Let's use this opportunity to build a healthy long term economy and real estate will do just fine. (Long term!)

First of all, excellent schools are not only of benefit to those with children attending school. I generally think that's self-evident because who wants a community full of poorly educated adults? But it also matters in terms of the value of your home. Every local resident has a stake in making sure our schools are first rate. There are debates raging on school funding in pretty much every local jurisdiction. This should be factored into that discussion.

And, let's be smarter in the future about the amount of development. Development is not, per se, bad. But it can certainly be done badly. Let's attract the jobs that will support the new homes.

That's my two cents! Feel free to add yours!

December Numbers

Jan. 15, 2008
Categorized in: Local Market Conditions

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!

Good News Recession?

Jan. 4, 2008
Categorized in: Buyers

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!

Changes

Oct. 31, 2007
Categorized in: Business of Real Estate

Technology is a constantly changing thing. And it certainly continues to impact how real estate is bought and sold.

Because technology is so important to how I run my business, I'm continually evaluating what's effective and what isn't and how I can best provide information to the public.

Given that, I've made the decision to discontinue my traditional web site and focus purely on this blog. I'm getting better feedback on the usefulness of the information here than on my original web site. And it's become impossible from a time perspective to keep that continually updated and to post high quality blogs on a regular basis.

So, watch for changes here! I'll be adding some categories and moving a lot of the information from my web site here. I'll be adding a category for listings and displaying that information here. If there are some hiccups in switching everything over, I apologize for those now!

Meanwhile, I'm hopeful that these changes will allow me to continually improve what I can offer you here. As always your suggestions are warmly welcomed and eagerly solicited!

A Little Good News

Mar. 2, 2007
Categorized in: Local Market Conditions

I know sellers are waiting anxiously for how February numbers look.  And while it's too early to have all the data, here are two quick items to make you feel a little better!

Overall inventory fell this month from 1903 to 1793. These numbers cover Fauquier, Culpeper, Madison, Orange and Rappahannock counties. I can't tell you yet how much of this is attributable to new contracts and how much is attributable to the wintery weather that plagued us for much of the month.

There's also good news on the interest rate front with rates falling again this week for the second week in a row! That's good news for buyers and sellers!

Stay tuned to this space for more data as it becomes available!

Piedmont Real Estate Blog

Blog by Julie Emery
Amissville, Virginia

An ongoing dialog on real estate news, opinion and trends in Northern Virginia and the greater Piedmont area. Julie is an Associate Broker at Frankly Real Estate Inc, 6304 Crossroads Circle, Ste 102, Falls Church, VA 22044

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