Archive for the 'Local Market Updates' Category
Northern Virginia Market Reports-Get the Data Right
October 7th, 2008 Categories: Buyers Corner, Local Market Updates, Real Estate Ramblings
We hear the doom and gloom on the real estate market everyday on the news. We remind ourselves and our clients regularly that all real estate is local and what they read in the Wall Street Journal may not translate to their neighborhood. So when we make the decision to post a market report about our own area don’t we have a duty to make sure that the data we post is accurate? Will our market reports picked up by Google and spread throughout the blogosphere create more concerns if they are inaccurate?
Recently I’ve been doing some “fact checking” on local market reports posted on a variety of blogs across the Northern Virginia area and found some major discrepancies in market data. We tend to forget that most of the data we have access to ourselves is also now available to the average person with a computer. So not only can other agents “fact check” our market reports but so can a savvy buyer or seller. I often check the MLS sales data against the local county tax records something that anyone can do. Not all sales are reflected in the MLS at the time they happen. New home sales may not appear until the end of the year, if an agent was involved and never if there was no agent involved. The same is true with FSBO transactions. Then you get into the naming conventions in a neighborhood. Not all agents know that what might look like one neighborhood in a basic MLS search might actually be multiple sections of a neighborhood with different names.
If we are going to post a market report are we ready to stand behind our data. If a consumer reads our reports and asks the question how accurate is our report can we provide the data to back it up? If market reports are close then it would be easy to say that it was the time that the agent compiled their data but if they are significantly different how do they decide who is right? Recently I came across a market report that showed only one townhouse sale in a Prince William neighborhood in 2008 and only two currently on the market. Since I had sold a townhouse in the neighborhood I knew that data wasn’t correct. In fact 18 townhouses have sold in the neighborhood in 2008 and 4 under contract. That is not an insignficant difference in data.
If as agents we want to help stem some of the fears of our clients and our prospective clients then we need to be diligent that the data we post is accurate. No one is expecting us to be statisticians and get every analysis dead on. I took two semesters of statistics in graduate school and there is not way I’m going to even come close to knowing all the formulas needed to compile 100% accurate variables. However, consumers do rely on us for basic accurate information and if we don’t get that right then we need to be ready for a long cold winter.
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Marketing Reports-The Paul Harvey View
October 3rd, 2008 Categories: Buyers Corner, Local Market Updates
I rarely post market reports. On occasion when an area is on the rise or on a steep decline as the market in Prince William County has been over the last year it is interesting to post a perspective. The reason I don’t post many market reports is because they don’t tell the whole story about a community and can often lead to confusion. As Paul Harvey would say ” and now for the rest of the story.”
A perfect example of how a market report can confuse buyers and sellers is to look at Belmont Bay in Prince William County. To date in 2008 there have been 19 settled condo transactions in the neighborhood. Six of those transactions are new construction either in HarborSide or River Club 2 and the other 13 are spread out in the other condo buildings in the neighborhood.
Prices have ranged from a low of $237,000 to a high of $490,000. This is obviously a wide range and it would lead a buyer to question why would anyone pay $490,000 for a condo when you could buy one for $237,000? The difference between the two units is significant and unravels the story of the price difference. The unit that sold at $237,000 was a ground floor condo in foreclosure. The only view that this unit has is of a street and a small view of the community tennis courts on the side. It does not have a balcony and due to its location provides absolutely no privacy for the owner. In fact the previous tenants who lived in the property said they were never able to open their blinds so it was like living in a cave.
The highest priced unit at $490,000 sits on the top floor with views of the Belmont Bay Marina and Occoquan River. It has light all the time and a balcony with terrific views. The owners could leave their blinds open 24 x 7 if they wanted and no one is going to be walking by peering in their window at any time day or night. Each of the other condos that have sold can tell similar stories. Since I have sold 6 condos in the neighborhood this year and been in all of the ones for sale I could easily describe the differences.
If I posted a market report that is only based on number of units sold and the price range of those units I’ve only told you part of the story. When I break it down to tell you the differences in the units, the differences in the amenities in the buildings and the differences in the views then the picture becomes a whole lot clearer.
Thanks Paul Harvey for always reminding us that there is another part to every story. In the case of market reports the true picture of a neighborhood goes deeper than the latest MLS statistics.
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What is Hot in Northern Virginia Besides the Weather?
June 13th, 2008 Categories: Auctions & Foreclosures, Buyers Corner, Focus on Prince William, Local Market Updates
Sales in Prince William County would be the answer. Sales may be stagnant in other parts of Northern Virginia but buyers are flocking south to Prince William to take advantage of the lower prices and great bargains in the area.
Check out the total sales comparisons between 2007 and 2008 in two zip codes in Prince William County.
So why the sudden interest in Prince William County? Obviously it is due to the significant price drop which has happened over the past year.
Neighborhoods in 22191 include both the newer subdivisions of Port Potomac, Belmont Bay, Rippon Landing and River Oaks. Older neighborhoods such as Georgetown Village, Marumsco Woods and Newport have been some of the hardest hit with foreclosures. Neighborhoods in 22193 include Dale City, Lake Terrapin, Winding Creek Estates and Pearsons Landing.
Does this mean that Prince William County is out of the woods yet? No as there are still a significant number of properties for sale and there is anticipation that more foreclosures will be coming on the market through the summer. However as new properties are listed the expectation is that we will see additional price reductions in certain neighborhoods in Prince William County creating even more values for savvy home buyers.
For investors, who are looking to buy and hold for a few years, and particularly buyers who are looking for a new home that falls well within the limits of a FHA or VA loan there are terrific homes and neighborhoods to explore. From the starter home in Lake Ridge to the luxury mansion in Haymarket you can find a deal in Prince William County.
If you are interested in exploring your options in Northern Virginia give me a call. I’ll travel the highways and back roads of Prince William County looking for a deal for you.
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Will the Fed Rate Cut Help Home Sales?
September 19th, 2007 Categories: Local Market Updates, Real Estate Ramblings
My immediate reaction to the announcement of the ½ point cut in the Federal is SO WHAT?
I think it is unreasonable to expect to see a major rush of buyers applying for new loans due to this cut. The people who will benefit immediately may be those who have adjustable rate mortgages that were ready to change. And I say maybe because just because the Feds have cut the rate doesn’t necessarily mean that your mortgage company will pass any savings on to you.
We all hope that this announcement will begin to stir positive press and better news for the local housing market. In the meantime if you know your rate is scheduled to adjust and you are struggling to make your payments now is the time to pick up the phone and make a call to your mortgage company. Don’t assume that this announcement is going to work in your favor. Be proactive. Your mortgage company would rather work with you than own your house!
Here is a quick run down from USA Today on the impact on the rate cut:
Credit cards. Most banks peg credit card rates to the prime rate, which fell to 7.75% after the Fed’s rate cut Tuesday. But you might not get a lower rate for one to three more billing cycles, depending on when and how often your bank resets rates.
Fixed-rate mortgages. Average rates fell to 6.31% last week, down from 6.74% in June. It’s hard to say if rates will fall further because fixed mortgage rates typically follow the 10-year Treasury note’s yield, which was unchanged Tuesday at 4.47%.
Adjustable-rate mortgages. About half of ARM rates follow the yields on short-term Treasuries, which fell Tuesday. The three-month T-bill yield, for example, fell to 3.94%. If your ARM is tied to Treasuries, your rate won’t rise as much as it would have if the Fed hadn’t cut rates. ARMs pegged to the London Interbank Offered Rate might not get much relief. Most subprime loans — higher-rate loans taken out by people with poor credit — are tied to LIBOR. LIBOR has remained high because many banks remain reluctant to lend. Those willing to lend demand higher rates to account for today’s risky credit markets.
Savings rates. Yields on money market mutual funds closely follow the fed funds rate and should fall half a percentage point in the next few weeks. Rates on bank CDs may fall less, because banks are bidding aggressively for consumer deposits.
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Saying No to Local Market Reports
September 1st, 2007 Categories: Local Market Updates, Real Estate Ramblings
Every month hundreds if not thousands of agents jump on the band wagon and print the latest local market reports. Most of the data that is presented comes from the same sources and the only noticeable difference is the way some agents format the data and the delivery method (print, blog, email). I began to wonder who is reading all of the reports that are published each month. Is it a buyer trying to decide whether to buy now or wait until they think the market has hit the bottom? Is it seller trying to decide if this is the right time to sell? Or is just another agent out looking for a new report format?
Up until now I’ve been a participant in this exercise. However with the market changing daily posting a compilation of monthly statistics for a zip code or county really doesn’t seem to hold much value. The phrase all real estate is local takes on a whole new meaning in the Northern Virginia market. I admit when I first started posting market reports they were at the county level, face it, it’s easy and all you have to do is look at either the MRIS or NVAR and the data is all there for you.. Then I realized that the county level was way to subjective so I went to posting information at the zip code level which took a bit more work.
In some areas of the country posting county or zip code data might be quite acceptable and provide a realistic picture of the market. In our area zip codes contain a wide range of neighborhoods. Not only is there a wide variety of home types (detached, townhouse, condo) within a zip code but a wide range of neighborhood values as well. In some neighborhoods the market is stagnant or slipping. In others in the same zip code the picture isn’t as gloomy. A market report for buyers and sellers in today’s market has to be focused at the neighborhood level to be of any value. General data is misleading and could keep a buyer from making the right decision or give a seller the wrong sense of value for their property.
So jump up and cheer there will be one less general market report next month. Instead I am going to put my focus on exploring and reporting news about local neighborhoods (both old and new), places of interest and quirky finds. I’ll leave the generic market reports for everyone else to write.
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What is missing from your monthly market report?
August 11th, 2007 Categories: Local Market Updates, Real Estate Ramblings
Every month in Northern Virginia a variety of reports are published by the MRIS, NVAR, Washington Post and others to provide the public with information on recent market trends. The reports focus on comparing housing prices in a user selected zip code from the previous month and the previous year.
When the local market was moving at a frenetic pace most of us didn’t have time to look at the reports and we didn’t have many reasons to question whether there was enough data included for a buyer or seller to make informed decisions. Now don’t get me wrong there are a lot of things I would rather be doing than digging through data in the MLS, however in a market where prices are not heading up daily and where buyers are looking to make “low ball” offers knowing the data is extremely important.
That is why I have a problem with broadcasting the numbers from our local sources without providing the consumer with a few more details. So I grabbed the 22206 zip code number from the latest MRIS report and went one step further and looked at the average seller subsidy for the zip code. I think the chart gives a decent overview of what happens when you start at the macro level and begin to drill down. I think leaving out the seller subsidy is a significant error in our market reports. These subsidies have an effect on the bottom line for both the buyer and the seller. Knowing how an area is tracking (even better at the neighborhood level) can help provide our clients with a better perspective on what to expect.
So before you assume the sales numbers you are looking at are accurate ask for more details. Check to see the raw data and see how it tracks.
I’ll leave the issue with Days on Market (DOM) for another blog!
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Straight Talk from a Northern Virginia Realtor
August 9th, 2007 Categories: Local Market Updates, Real Estate Ramblings
As someone who has seen the market in the Northern Virginia area go through the up and down cycles before I thought I would provide some personal insight on our real estate market for buyers who might be sitting back and waiting.
I purchased my first home in Northern Virginia in 1981. Interest rates were a staggering 16-17%. Fortunately I was able to assume the sellers existing VA mortgage and wrap the remaining money I needed with new VA mortgage to come up with a 12% interest rate. I was a happy first time homeowner. Three years later I decided that I wanted to move to Arizona but instead of selling my home I made a deal with my parents to buy a half interest in the house and maintain it is a rental property. I used my half interest as a down payment on a new home in Arizona.
Now in the mid 80’s we hit a down market but the home that I owned in Virginia had risen in value and my parents were tired of dealing with a rental property so we decided to sell. In 1991 I decided to return to Virginia and by then the property that I had purchased in Arizona had risen in value about $25,000. Are you getting the drift?
So I bought another home in Virginia in 1991 at the beginning of another real estate down turn. I bought a house in a great school district for my kids, close to a park and public transportation. Now most buyers were sitting on the sidelines. In fact this particular house had been on the market for a long time and the owners had already left the state and we worked out a WIN/WIN deal.
From 1991 to 1997 the real estate market in Northern Virginia was stagnant. Buyers again were waiting to see what was going to happen. I decided to take the plunge and bought another property in 1997 just before the market started to pick up again. I sold the larger home and moved into the townhouse. Small profit on the big house but more importantly during that time I had the tax write off for all the interest on my 9% loan.
I hope by now that you are getting the picture. I didn’t have a stash of cash when I started this process. I didn’t have any idea where the market might go. My main objective was to have a home where I could raise my family and enjoy whatever tax benefits were available. I felt very fortunate that I was able to make what at that time seemed like whopping profits on my homes. Because that’s what they were to my HOME.
When I finally made the decision to become a full-time Realtor and study the idea of investing in real estate I kicked myself for not buying and holding on to more properties sooner. If I had listened to the media and the economists who said the sky is falling I wouldn’t own three properties today and be on the lookout for more. It is amazing to me with interest rates close to the same level they were a year ago, unemployment rates holding steady and house prices down 10-15%, depending on the area where you are looking, that buyers aren’t out in droves.
So for the buyers who are waiting, I’d like to ask what you are waiting for? If you want to own a home, buy while you know what the interest rates are, while the prices are lower than a year ago and the selection is greater. As the folks at Nike say…JUST DO IT!
*Chart based on 30 year fixed rate conventional loan
Your loan rate might vary based on credit, downpayment and type of loan. If you need to talk to a direct lender give me a call. I would be glad to give you a selection of lenders to talk to.
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What’s Behind the Gates in Northern Virginia
August 3rd, 2007 Categories: Local Market Updates, Out and About, Real Estate Ramblings
I had the opportunity recently to tour the most expensive home currently for sale in Fairfax County. Listed for $14,000,000, Chateau in Oak Hollow is located on a 5 acre lot in an area just outside the historic town of Clifton. Modeled after a French Chateau the property has an indoor pool, elevator, wine cellar, art gallery and garage space for 8 cars. The architect of the property designed the property to take advantage of natural resources including geothermal heat. With wrought iron fencing surrounding the property it is a private retreat that is less than an hour to DC during rush hour. If you have a car collection (Jay Leno) then you have plenty of space to store your toys.
I was surprised to find that this home was actually listed for more than the historic Hickory Hill home of the late Sen. Robert Kennedy which has been reduced in price to $12,500,000 after almost 3 years on the market. Built in 1815, President John Kennedy purchased the property in 1953 while he was a senator and sold it to his brother in 1957 for $125,000. On 6 acres in McLean it is surprising that a historian has not snapped up the property.
So my curiosity made me decide to look and see what other properties were lurking in the area for the super rich. Heading out to Loudoun County I found a 400 acre property outside the town of Middleburg which can be purchased for $16,000,000. The home on the property was originally built as a school house in 1830 and a “new” addition was built in 1924. The home needs updating to bring it up to today’s standards but the detail work in the original flooring, plaster moldings and doors is well worth saving. For a country squire who would like a great retreat property with room for the horses this might be the place to call home.
If you would like to live closer to town then the place to check out is Ferry Landing Villa in Alexandria. The property sits on 4.5 acres fronting the Potomac River. This home resembles George Washington’s home Mount Vernon (which is only a few miles away). If you want to swim you can jump in to the pool on the property or play tennis on the private courts. With a huge dock area and access to the Potomac River this home screams for water lovers to come on in.
We have a total of 25 properties listed for over $5,000,000 in the area so if one of these doesn’t work then there are others that might. So the next time you think that Hollywood is the only place with expensive real estate check around Northern Virginia. We’ve got some high priced homes too!
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The Washington Post and most of the other local papers continue to beat on the real estate market as if the sky has absolutely fallen. Yes the number of homes sales is down in Fairfax County. No one is going to deny that fact. The days on the market have increased significantly.
I wonder how many of those listings that have been on the market for 90 or more days were grossly overpriced to begin with?
I know I have had a number of potential sellers who I have talked with who still want to price their homes at the 2004 & 2005 level. If a home is priced right and a seller is realistic about the price and condition of their property it will sell.
If you are interested in discussing the Fairfax County market or selling your home please give me a call. I have lots of creative options to help your home sold!
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