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Culpeper Market November 2011

Dec. 15, 2011
Categorized in: Culpeper County

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?

Rappahannock Market Update

Sep. 27, 2011
Categorized in: Rappahannock County

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.

 

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!

 

 

 

Manassas is Hot!

Mar. 1, 2009
Categorized in: Local Market Conditions

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.

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! 

 

 
 
 
 

 

 

How Low Will They Go?

Dec. 17, 2008
Categorized in: Buyers

Mortgage rates are way, way down today. The lowest I've seen is 4.875% for a 30 year fixed with 0 points. That's truly incredible and probably the lowest mortgage interest rate I've seen in my lifetime.

The rates did not drop because of the Fed's drop of the Fed funds rate, but because of what else Fed Chair Bernanke had to say yesterday. He basically said he's going to do whatever it takes to get this economy moving again. And, he specifically said that can include buying mortgage backed securities. That's the big deal.

Because those mortgage backed securities are still sitting on the banks books. And regardless of what the federal government has tried banks still are not lending money as freely as the economy needs. The mortgage backed securities, which may, in fact, be worthless are a big part of why they still aren't lending. What the Fed did was signal that they will buy these possibly worthless assets and allow the banks to get them off their balance sheets. That should, finally, convince the banks to lend money again.

But, if you've been contemplating buying a home right now, your biggest question is probably, should I buy now or will rates go lower?

No one can answer that question for you definitively. But here's what I think. There's a fair chance that rates may go even lower. There are proposals floating around that would have the government subsidizing mortgage rates to lower them even more. No one knows whether any of these proposals will ever actually be implemented. But given the current environment and government's determination to get the economy fixed, it certainly could happen.

But, if you've found a home you love and the price is right and you can afford a mortgage with rates where they are, I'd suggest you move forward now. The risk of losing a home you want is higher than the risk of losing out on a slightly lower mortgage rate. Buy now, build a little equity and, if rates stay low you can refinance down the road.

If you're out there looking, I'd say keep looking. Inventory is lower than it has been in several years. These lower rates may actually make that worse as more buyers begin to make their move. Your selection isn't likely to improve in the short term and if you find something you'd like, jump on it.

If you haven't started looking yet, I definitely think you ought to at least be very closely monitoring inventory. You should know what's out there and what you get for your money in your price range. I can't tell you whether or not to wait for rates a little lower. But I can tell you that great rates now and a reasonable amount of inventory might be a better situation than even lower rates and buyers fighting over inventory. This is especially true in the lower price ranges where inventory has gotten very picked over.

I think it's shaping up to be a very interesting 2009!

Warren County Real Estate Statistics

Apr. 24, 2008
Categorized in: Warren County

Today, finally, I'll get around to talking about the numbers for Warren County.

Inventory in Warren County has stayed relatively stable month over month. There were 560 homes listed for sale in February and 567 in March. No significant difference there. Surprisingly enough, Warren County is the one county where there's very little difference year over year in this number. In March of 2007 there were 558 homes listed.

93 new listings came on the market in February. March was up slightly with 98. There's a significant difference in last year's numbers, however. In March of 2007 there were 161 new listings.

We do start to see some differences with contracts, month over month. In February there were 22 new contracts. In March that jumped up to 34. Of course, that's less impressive when you consider that a year ago there were 52 new contracts.

There were 24 closed sales in March, 22 in February and a year ago there were 39.

Overall, the patterns are similar to what we've seen in the other counties.

Prices in Warren County are down almost 17% year over year. It's worse than Fauquier, Culpeper or Rappahannock, but not as bad as Prince William.

Next week I promise an end to all these boring statistics for awhile!

A Year's Worth of Culpeper County Data

Mar. 20, 2007
Categorized in: Local Market Conditions
 

Earlier in the week I provided some numbers to give you an idea of what the inventory picture has looked like homes for sale in Fauquier County over the last year. Here is the same information for Culpeper County.

 

This data covers the months from February, 2006 through February 2007. The data is taken from our MLS system and includes properties residential properties listed between $100,000 and $5,000,000.

 

The numbers I’ve chosen to look at are the total number of active listings at the end of that month, new listings that went on the market that month, properties newly under contract that month, and properties that went to settlement that month.

 

 

MONTH
ACTIVE
NEW LISTINGS
NEW CONTRACTS
SOLD
02/06
465
133
65
49
03/06
556
204
74
58
04/06
592
177
70
67
05/06
689
226
72
65
06/06
738
183
53
64
07/06
759
140
48
43
08/06
751
151
43
40
09/06
723
138
64
44
10/06
705
121
32
44
11/06
625
81
39
38
12/06
612
80
30
38
01/07
640
165
41
19
02/07
623
91
48
36

 
 

The good news is that inventory is definitely down from it’s peak last summer. The bad news is that we’re in the period of the year where inventory typically increases. But, buyers also come out in larger numbers this time of year. So it’s possible to read this through rose colored glasses or to become completely pessimistic looking at these numbers.

 

As usual, the truth probably lies somewhere in the middle! No doubt we’re still in a great buyer’s market. But there’s reason to believe this summer will be better than last. Interest rates are actually down again and there are a lot of really amazing deals. This may draw more buyers into the market than anyone is anticipating!


Watch this space to see what happens!

 

Turning The Corner?

Oct. 5, 2006
Categorized in: Local Market Conditions

The latest market statistics again show that inventory is decreasing in Fauquier, Culpeper, Rappahannock, Prince William and Fairfax. Those are the counties I've looked at so far, but I'd be surprised if other counties weren't also reflecting this trend. 

Given that the number of sales is still way below last year's rate, which was slightly below the 2004 rate, the inventory is not decreasing because of increasing activity by buyers!  People are taking their homes off the market.

While I'd be more excited about a big jump in the number of buyers out there, this is very good news! The only way to stop some of the downward pressure on prices is for inventory to fall. 

The decline in inventory is not dramatic and so I don't expect to see much immediate impact on the market.  If you're a seller, you're still going to be feeling the pressure on sales prices.  If you're a buyer you've still got lots of negotiating leverage.

But, this is a hint that we might be starting to turn that corner. If inventory continues to decline at its current rate, I still believe it will take until at least next spring to truly start to see a more balanced market.

One thing that could speed that up is decreasing interest rates.  There are hints this week that the Fed is contemplating lowering rates.  And 30-year fixed mortgage rates have been coming down for about six weeks now.  If we continue to see that we may also see more buyers jumping into this market. And that's something every seller is definitely hoping for!

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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