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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?

Fauquier Market October 2011

Nov. 28, 2011
Categorized in: Fauquier County

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!

Where's Your Buyer

Sep. 26, 2011
Categorized in: Sellers

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!)

Flying Off the Shelves

Jul. 12, 2011
Categorized in: Buyers

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.

Why Sellers Won't Sell

Mar. 1, 2011
Categorized in: Sellers

How people think about real estate, economics and what's going on in their own personal financial situation has a lot more to do with the current state of our economy than most of us realize.

This story from the Planet Money team illustrates that nicely. Sellers can't bear to lower the price, often even if they still get a very nice profit.

Are you holding on? What for?

Write What You Know

Oct. 27, 2010
Categorized in: Miscellaneous

I love writing. It's one reason I have this blog. And, as anyone who's ever taken a writing class knows, the classic advice is to write what you know. For the record, I'm guessing a lot of successful authors have completely ignored that advice!

So, what I know these days is not entirely real estate related.

My husband recently suffered a heart attack, followed by quadruple bypass surgery. Not surprisingly, life has changed significantly.

So, it's been a little quieter on this blog lately. I believe that's about to change.

Meanwhile, I'd recommend healthy eating, lots of exercise and regular check ups. You just never know!

And now I return you to your regularly scheduled real estate posts!

Breaking Up Government

Jul. 24, 2010
Categorized in: Local Market Conditions

There was a fascinating editorial in the Washington Post this last weekend suggesting that we should be moving big bunches of the the federal government out of the greater Washington DC area.

This is not a plan that's likely to be well received in this area. It will do nothing for our local economy. Demand for real estate surely goes down if this were to occur. (A VERY high percentage of my clients make their living in ways either directly or indirectly related to the federal government.)

But my hunch is that it may be the right thing for the country as a whole.

Let's move a whole bunch of government jobs to places with horrendous unemployement; think Ohio or Michigan.

Is it even possible any more for a large group of people to come together and decide to make a sacrifice for the greater good of the country?

What if the people in this region demanded that this be done? How would it change the attitude of people in the rest of this country towards those boogeymen "Government" and "Washington"?

Worth a try?

Not My Problem

Jul. 21, 2010
Categorized in: Sellers

A lot of sellers are coming to the settlement table these days owing money. It's got to be a bitter pill to swallow. You own a home for years and instead of gaining in value, you have to pay money to get the thing sold and move on.

But last week I ran into a new situation. Sellers came to the settlement table apparently unaware that they were going to have to pay money to sell their house in Manassas. My buyer clients and I found out when I got a phone call from the listing agent asking us for money so that they could close.

There is no reason that I can think of that any seller should not know, long before they get to the settlement table that A) they will need to bring cash and B) roughly how much cash they will need.

There were two reasons I was given as to why it happened in this instance:

1) The sellers had no idea that the costs of the repairs that were required as part of the contract would be so expensive.

Reality Check: The sellers had estimates from the workmen over a month prior to settlement. They agreed to those estimates before any work was done.

2) They couldn't have known how much the loan payoff amount would be.

Reality Check: Actually they could have known that number at any time. Almost all lenders now have an automated system where you call, give them a date of settlement and they tell you how much your payoff will be. If they couldn't get that info themselves, they had a settlement company that certainly could have easily gotten this for them.

In the end, the sellers and their agent found a way to come up with the money and get the deal done. Neither my buyers nor I were out of pocket any money.

If you're selling your home, make sure that once you have a ratified contract (if not before) you have an estimated cost of settlement from your real estate agent that gives you an idea of what you will take away from settlement OR how much cash you'll have to bring!

Kickbacks Are Illegal

Jul. 8, 2010
Categorized in: Business of Real Estate

There has been some funny business going on around home warranties in the real estate industry. OK, maybe it's not just home warranties. Sometimes stopping kickbacks seems a lot like a Whack-A-Mole game. Eliminate it here, it pops up over there. Some people just don't get this whole "spirit of the law" thing.

So, here's how I've seen it work. A certain home warranty company makes an arrangement with a certain real estate broker. For every warranty that is sold the agent gets a fee, let's say $35.

Is $35 enough to change the behavior of a real estate agent? I'd surely hope not. But these are desperate economic times for some and who knows. More importantly, in my eyes, this is definitely providing the appearance of impropriety. For that reason alone it's a bad idea.

Last week HUD agreed and said:

A payment by an HWC for marketing services performed by real estate brokers or agents on behalf of the HWC that are directed to particular homebuyers or sellers is an illegal kickback for a referral under section 8

This is great news for the industry. No one was making a fortune off these kickbacks. It certainly wasn't worth it in terms of the damage to our reputation.

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!

Where to Retire

May. 17, 2010
Categorized in: Business of Real Estate

Baby boomers are starting to think about retiring. (They don't have enough money to actually retire!)

And early evidence shows that how and where they will retire is different than the preceding generation.

Baby boomers are apparently not dreaming of golf communities in Florida or Arizona.

By and large, baby boomers are hoping to retire right where they are. They may downsize. They may move closer to the city and mass transit so they can get rid of their cars. It seems the suburbs were OK for raising kids but not where they see themselves going forward.

This raises lots of interesting real estate questions. What does this do for FL and AZ? Surely it will make their recovery from the real estate slump much harder.

Access to train service into DC will be increasingly important to towns in the area hoping to keep their retirees. What else could places like Warrenton do to attract and keep retirees? (Who require fewer public services but contribute plenty of tax revenue)

Are the inner suburbs and DC ready for the influx of retirees?

What do you think? Where will you retire?

 

Prince William Wild Appreciation

Apr. 28, 2010
Categorized in: Prince William County

I was listening to The Kojo Namdi Show this week as they discussed immigration and was shocked to hear Corey Stewart, the Prince William County Chairman of the Board of Supervisors say that home values in the county will increase 27% this year.

Am I shocked they're going to be up that much? No, if you look at current market statistics they already look to be up that much year over year, maybe even more. The data supports his statement.

I've written a lot of offers in Prince William County over the last few months. Every single property we wrote an offer on has multiple offers. One had 12 offers, 9 of them cash. So, no, it doesn't shock me that prices are up that much.

I am shocked a politician is that well informed about our market.

I also continue to worry about that kind of jump in price right now. Those were the kind of crazy price increases we saw before the whole market went kablooie (that's a technical term). I am having trouble believing that this is an indication of a healthy market.

What do you think? Too much, too soon? Will we crash and burn again or are these prices just the proof that the market over-corrected?

I Screwed Up

Apr. 14, 2010
Categorized in: Finding the Right Agent

I'm sure it's not a surprise to anyone that I'm human and make mistakes. A real estate transaction requires an extraordinary attention to detail these days with the average contract paperwork running over 40 pages and managing relationships with home inspectors, pest control companies, lenders, title companies, and many more.

Last week I made a mistake on contract paperwork. It wasn't a small one. And I'll be beating myself up over it for awhile.

I'm not blogging about this in order to publicly flog myself. But to acknowledge that real estate agents, like all human beings, make mistakes all the time. It's not, whether, but when and the important thing is how they handle it when it happens.

The first rule is: tell your clients immediately. If your agent makes a mistake when writing the offer and you don't find out until settlement, that's a problem!

Next, obviously, it needs to be fixed, if that's possible.

Lastly, determine what remedies are available. Does the client need to withdraw an offer, find an out in the contract or amend it? If the client suffers economically because of the agent's mistake, I believe the agent should be making a list of what steps he or she can take to make things right.

I'm a firm believer that if handled correctly, even bad mistakes can result in a stronger, better working relationship.

I found this online and thought it appropriate.

 From "Decide to Say Sorry" By Jeanne Bliss:

“How you apologize is your humanity litmus test. Let’s face it, at some point; your business will suffer a failure that disappoints customers. How your company reacts, explains, removes the pain, and takes accountability for actions signals how you think about customers, and the collective heart of your organization. Grace and wisdom guide decisions of beloved companies toward accepting responsibility and resolving the situation when the chips are down—not accusations and skirting accountability. Repairing the emotional connections well is a hallmark of companies we love. It makes us love them even more.”

 

 

Photos You Don't Want in the MLS

Apr. 14, 2010
Categorized in: Sellers

The #1 way buyers find a house to buy is the internet.

The #1 factor in a buyer choosing to look at your house is the photos.

Is this what you want representing your house?

 I get a little crazy when I see these photos. (By the way, every photo of this listing was atrocious!)

If you're interviewing a listing agent, ask to see photos of their current/most recent listings. Not just the front photo, but interior as well. Ask how many photos they'll upload. (Hint: if it's less than 10 and you have a single family home, ask why!)

 

March Local Market Numbers

Apr. 13, 2010
Categorized in: Local Market Conditions

It's been a few months since I've written about the overall market stats for the area. So, let's see what's changed.

We'll talk about Rappahannock first for a change. How does it compare to a year ago? 86 listings now compared to 76 then. 6 sales in March 2010 compared to 3 last year at the same time.

Note: Remember, real estate is seasonal and year over year numbers are a much smarter comparison than month to month.

The one Rappahannock statistic that jumps out is the number of new contracts in March. There were 8. That's the highest number of new contracts in one month since August, 2006.

Culpeper has 433 active listings compared to 464 last year at this time. While sales in other counties jumped in March after a couple of slow months, March still looks pretty flat in Culpeper. But the median sales price is up almost 10% year over year. That's 2 months in a row that have shown price increases. If you look over a longer time horizon, it's certainly easy to make the case that prices remain flat to slightly higher. The number of contracts ratified in March is down, year over year, but up significantly month over month. Last year at this time there was an increase in contracts from February to March. As always, I'm reluctant to speculate on what these tiny data points mean, other than to say, stay tuned.

Fauquier County also shows declining inventory, 516 now vs. 556 a year ago. Sales are 73 in March of 2010, a significant increase from the 43 in March of 2009. In fact, you can pick just about any metric you want in Fauquier, including price, and it's up. The absorption rate would indicate a very balanced market. That's slightly misleading since there's little inventory available at the lower price ranges.

Prince William County continues to be the place where the buyers are lining up to buy. As an example, a listing came on the market in Gainesville this morning and by this evening when I tried to take my clients to show it, I was turned away and told it was already under contract. Inventory has dropped year over year from 3079 a year ago to 2595 now. Sales have dropped though, from 750 a year ago to 559. I believe that has more to do with a lack of properties in the lower price ranges rather than a lack of interest by buyers. And inventory is coming on the market at a slower pace. Last year in March 1219 new properties were listed. In March 2010 only 964 properties came on the market. Prices reflect the shortage of inventory. Prices have been climbing in Prince William County for months now.

It's a great time to be a buyer in our area if you don't mind bidding wars and competing against cash offers! It's a great time to be a seller if you are not expecting prices at 2005 levels!

 

 

Buyer Beware

Feb. 14, 2010
Categorized in: Buyers

There was a time when people had an expectation that other people, trusted professionals, would look out for their best interests. It was probably always a mistake to blindly trust anyone simply because of their profession. Even your doctor may have mixed motivations.

And, here's fresh evidence that you should not trust your real estate agent if you're a buyer, especially if you're in North Carolina.

I was taught from the beginning that you disclose EVERYTHING! You especially disclose anything of a financial nature that even has the appearance of influencing your behavior.

You should know if one of the homes I'm showing you pays me more than the others. You should also know if one is offering me less than my fee. Then you can make a rational, informed decision.

North Carolina real estate agents who are fighting to keep their buyer clients in the dark ought to be ashamed.

Cash Wins Bidding Wars

Jan. 5, 2010
Categorized in: Buyers

Sunday's Washington Post had an article on how cash rich investors are the bane of first time home buyers.

The example they use is in Prince William County but it's happening throughout the region.

Cash is kind, there's very limited inventory and deals with mortgages often fall through.

If you were a seller, what would you do?

Kojo Show Does Real Estate

Dec. 16, 2009
Categorized in: Local Market Conditions

I don't know of another local radio or TV personality who does a better job of keeping people informed about the local real estate market than Kojo Nnamdi on WAMU. He's had two shows in the last week that illustrate that point.

First he did a show on townhouses and rowhouses that was very interesting. Part of what I like about what Kojo does is that he does the big picture stuff. This piece looks about this important piece of the urban housing picture.

More recently he did a piece on the home buyer's tax credit. It's a more complex subject than most media reports would indicate and it's great that people have another place to go and ask questions. Some of the questions are as informative as the answers in helping me gauge how much people know and understand about the subject.

Take the time to listen to these shows. If you're not a regular listener to Kojo's show, you may become a fan!

Gainesville Dying?

Apr. 14, 2009
Categorized in: Local Market Conditions

A Reuters article this week suggests that Gainesville is a dying community.

I think the article gets some things right and others wrong.

Gainesville home sales are jumping. And in the lower prices we're seeing bidding wars and/or multiple offers. That doesn't signal to me that the entire community is dying. And, yes, there are still a lot more foreclosures to come. If they come at a measured pace the market will quickly absorb them.

On the other hand, I continue to see buyers less willing to do the long commute. So, unless the pool of jobs within a reasonable driving distance of Gainesville increases, the community has some tough times ahead.

And, the further out you go (think Fauquier County) the more commuters have opted out.

Are new, good jobs going to be created in these communities? Or, are we simply going to be smaller?

Disappearing Shadow

Apr. 7, 2009
Categorized in: Local Market Conditions

In the tough seller's market of the last few years a lot of sellers have tested the waters by putting their house up for sale, and, in the end, retreated. All those houses that will theoretically come back on the market when the market improves are called shadow inventory.

We're looking at two basic kinds of shadow inventory. The first is individual owners. They want to sell, maybe even already tried and are just waiting for the right moment to put their home on the market.

The second kind of shadow inventory is foreclosure inventory. The banks are reportedly sitting on 600,000 homes nationwide that they've already foreclosed on, but aren't yet putting on the market.

Both of these categories have the potential to dramatically increase inventory, which has been steadily dropping for at least a year now.

The thing is, I'm not overly worried and I think the danger has been exaggerated.

Yes, there are a lot of homeowners who still want to sell. But it's not just the low number of sales that keep them from trying. They also don't want to sell at these prices. And, if they're going to wait for prices to recover even a quarter of what they've lost, I think they're looking at waiting several years. Some of those homeowners will have changed their mind by then. They'll remodel the house to suit their needs and they'll stay. Those that do still sell will not do so in one huge mass. Some will have a higher tolerance for lower prices and will sell sooner. Others will likely wait a year or two or three. I don't believe there will be some magical month where all this "shadow" inventory pops onto the market at once.

The foreclosure properties are a bigger concern. But I'm still not convinced it will be a huge problem. A lot of those 600,000 homes will be in CA, FL, NV and MI, places hit harder than we were. So, the numbers will likely be smaller than people anticipate. Secondly, the bulk of these are likely to be at the lower price ranges. We've actually got a shortage of inventory at those price levels. In places like Prince William County and even Culpeper County, a lot of inventory would be absorbed very quickly by first time buyers. And, I believe the banks are deliberate spreading out the foreclosures in order to manage their losses. It's not in their interests to dump everything on the market at once.

So when someone tries to scare you with all the shadow inventory waiting to hit the market, take it with a grain of salt. It may not be all that bad!

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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