Real Estate - Fall 09 - Northern Virginia

FINALLY
"REAL ESTATE IS FUN AGAIN"!!!
It’s back to school time, after an unusually cool summer. I hope that you all took time out to relax, rejuvenate and have fun with family and friends.
The real estate market was particularly active in the early summer months when buyers flooded into the market in June 2009. This lead to multiple bids on many properties, and many mid & lower priced properties sold VERY quickly. Activity slowed a little, as it usually does in the late summer, but Realtors are now back to work, and Buyers and Sellers are back in town, and looking to move.
The very low interest rates are stimulating activity. Do expect to bring a down payment to the closing table, and have reserve money left in the bank after your purchase. Sellers are often willing to help with closing costs.
There is a federal income tax credit of $8,000 available for first time buyers, or those who have not owned a home in the past 3 years, with less than $95,000 (married filers with income up to $159.000). The home must be purchase before December 1, 2009. This a tax credit for the current year, which has to be paid back over time, unless you live in the home for 3 years.
Loan programs are changing daily. New regulations are being enacted every few weeks.
If you want a low down payment loan, expect to use a government program such as FHA or VHDA for the purchase. The split loans, for example 80/10/10 loans are no longer being offered, and so there will be pricey mortgage insurance payments on any loan with less than a 20% down payment. Many buyers are now using the FHA loans which are available with a down payment of 3.5%. Be careful, some of the newer condo buildings are not FHA approved, and obtaining this FHA approval will be time consuming. FHA is reviewing their approval list to determine if previously approved condos still qualify after the recent mortgage turmoil. To see if the condo you are interested in is on the list click here!!
VHDA, Virginia Housing Development Authority, allows moderate income buyers to finance the 3.5% down payment with a second trust, which can achieve a $0 down payment. VHDA tax credit allows purchasers to use toward their down payment.
The foreclosures and short sale listings are dominating the market place. This has caused a lot of down ward pressure on sales prices. The outer suburbs have been hit the worst. Prices in Woodbridge are now at about 55% of their peak selling prices. However, the investors, and budget minded buyers have flooded to that market place. There can be as many as 30 contracts on a new foreclosure listing, as many of these listings are “auction” priced. Inventory of available home is substantially depleted (today, there is only 1 townhouse available in Lake Ridge, aged 15-25 years old!). This is causing prices to rise again in this area. To see Prince Williams Sales Statistics click here!!!
Foreclosures and short sale transactions are also predominate in some of moderately priced areas in closer-in suburbs of Alexandria and Springfield. Here also, demand for these listings is very strong, and there are always multiple offers for the listings in desirable areas such as West Springfield. Prices in these areas have dropped about 20% from peak prices. We are seeing regular sales of homes in nice condition on prime lots at regular prices. For example the golf course lot homes in West Springfield are selling in the mid- $600,000 price range.Check out the Alexandria City sales statistics!!
The North Arlington condo market has seen a little drop in activity in early Fall. While properties were grabbed up this summer, we are now seeing homes stay on the market for a few weeks. Properties in this area have tended to hold their prices. We are starting to see one or two short sales or foreclosures, but for the most part, properties in this area have avoided the general malaise.
In South Arlington there is a proliferation of moderately priced properties. There are many older single family homes and condos are being offered as Short Sales. In a Short Sale, the buyer has to wait, sometimes months, to find out whether the bank will release the seller from their obligation. We are also seeing some foreclosed properties in this market.Arlington County Sales Statistics for August 2009 are very promising!
In general, the real estate economists are predicting brighter times in the near future. I still believe that it will be 2011 before we start to see an overall rise in prices. At the current pricing structure, properties are generally affordable for the average buyer. Rents are falling a little as so many investors have purchased properties which they are then renting out.
THE ECONOMISTS ARE PREDICTING THAT A STRONGER REAL ESTATE MARKET IS JUST AROUND THE CORNER.
Fall 2009 is a good time to buy a property, with interest rates hovering around 5%. If you want to move up, you may well find a good discount on the higher priced properties. My business is based upon referrals, and I'm never too busy to help your family and friends. If you know someone who is looking to buy or sell in the coming months, please forward my name to them -- or send me their contact information and I'll contact them directly. Thank you.
Karrina Brown, MBA, Associate Broker Re/Max Allegiance