Many home owners are looking at what this year brings to the Real Estate Market here in the Metro Washington DC / Northern Virginia area. The 1st thing we are going to cover is what is happening in the market on a local level and 2nd you will find 10 tips for those of you that think this year is the year for you to make a MOVE. Many home sellers feel the winter blues, as they see housing prices down from prior years, but the signs across the country show the real estate market is on the mend. Locally we are not only seeing a mend to the market, but some property values have started to not only stabilize but have actually increased in value from year ago lows as much as 50 percent.
According to NVAR's Northern Virginia Area Home Sales Report for November total sales are up 42.45% over a year ago. The days on the market are down 45% and the total number of homes for sale is down 27.51%. In Fairfax County the Single Family Detached Market is looking the best overall. How do you like these numbers? Sales are up 21% over one year ago inventory down 31% and the Median Sold Price is up 17%. So what is this going to mean for us?
Sales activity is up, home builders are finally moving inventory and values are rising from there lows in many areas and many price ranges. As this spring market builds up steam, buyers are finding that the market has changed. To buy anything under 500K inventory levels are below 4 month supply and they will have to compete with other buyers on contracts. Good values may get 10 or more offers. Everything under $1million inventories levels are below 12 months supplies. Now homes in the 800 to 1million price range have showed sales up over 100% from one year ago. There is nothing that I can see that will change other than prices going up even more. The only area that still has an over supply is homes over 1million where there is still a 19 Month Supply. But that is changing as well. The new home supply is nil and the nice homes on the market below 1.6 million is getting very thin. The key is to have your home priced to today's market not the fantasy that you may want and need. At year-end 2009, mortgage rates stand at historic lows, spurring a wave of new applications for refinancing and new home Purchases. As we see 2010 come in we will most likely see a slightly higher rate. Every time we have seen this in the past buyers tend to make moves faster and it creates a sense of urgency in the market. All this means a wild ride for later this spring!
But there is one thing that will slow down a ramped price increase and that is the Short Sales and foreclosures that will likely continue to put pressure on homes prices in 2010 as they work their way through the pipeline slowly. It was apparent in 2009 that lenders were holding back much of their foreclosure inventories and REO, or real estate-owned property, in an effort to keep values up. This has worked and if the bankers are smart they will keep these properties coming at slower levels and get more for them as the market improves.
As I see it this year is going to be a great year in our local area Real Estate Market, Buyers and especially 1st time buyers that are buying homes with a long term out look will see that best value for years. The reason for this is going forward we have 79 million "Y" generation(ers) coming into the prime buying age's. This will keep that segment of the Market strong for years. With that Move up buyers will get more money for there lower price homes and the difference will be less to get them more. This will follow up the price chain and be good for all segments in the market. With that lets look at the best tips for buyers this New Year:
Tip 1: Take Uncle Sam up on his offer.
Might as well get a piece of that big stimulus pie while it lasts. At some point, the federal government will have to let the toddler walk on its own legs.
The $8,000 first-time homebuyer tax credit program that helped jump-start the real estate market in 2009 has been extended into 2010 and expanded. First-time home buyers who sign a binding contract to buy a home by April 30, 2010, and close on it by June 30, 2010, qualify. The program's maximum income limits have jumped from $75,000 to $125,000 for individuals and from $150,000 to $225,000 for couples.
For those who have owned their homes for at least five years and want to trade up to a different primary residence, a separate $6,500 tax credit has been added. Further, many homeowners who are underwater in their real estate loans are eligible for a loan-modification program with their current mortgage company or loan servicer through the Making Home Affordable Program.
Tip 2: Find down payment assistance.
There are several down payment assistance programs for first-time homebuyers at the federal and local levels. Other down-payment assistance programs that can piggyback ongoing federal programs are often available at the city, county and state level. Just conduct an Internet search for "down-payment assistance programs" with your town, city or county and Virginia added.
Tip 3: Make home improvements now.
Now may be the best time in years to fix up your home, either for a potential sale or simply for the sake of better living. Low financing costs, reduced construction materials costs and lower contractor profit margins make rehabs more affordable. Repairs that typically yield the highest returns are kitchen and bathroom makeovers with an emphasis on counters and cabinets. Get at least three different estimates and talk to your Real Estate Agent after you get them to see if these improvement costs will pay for their self at resale. Remember even Remodelers Magazine say's "you will only get .60 on the dollar back on such repairs". So make sure you want to live with the renovations, not just because you think it will help your home get sold. A good agent can help with that kind of a decision.
Tip 4: Hire Real Estate Agents wisely.
Now is not the time to hire a friend or relative as your Real Estate Agent. Just because you know who they are socially should not be a qualifier for them as your Real Estate Agent. Anyone that you hire, especially with one of the most expensive transactions of your life, should have over 7 years in this business. More over, should have sold hundreds of homes in your price range. In this market going with the 2nd string could cost you 10's of thousands of dollars. You hire an agent that is well known in the Real Estate industry. You want someone who is well-connected with other agents, to help you get the home you want or other agents like to Sell there homes to. One that lenders and other fellow industry pros know will get the job done. Check credentials, references and recent performance histories of that agent relative to your home.
Tip 5: Price accordingly, sellers.
This should be on every real estate seller's priority list. In most of our area, if the home is under 1million there are few reasons other than price that a house can't go under contract in 60 days or less. Homes in the upper brackets need more time but pricing is also the key. The listings that generate activity while others gather dust are typically those whose owners have adjusted expectations based on comparably priced homes, or "comps." That doesn't mean you should drop your price precipitously on your well-maintained home to undercut that of a poor-condition foreclosure homes. It just means "price to the present," not to a fantasy market.
Tip 6: Don't wait out the recovery.
Yes sellers, housing has been repriced. And by the looks of things, it will take YEARS for values to return to their previous highs. Just because your home is less then what it was selling for a few years ago, doesn't mean you are taking a loss. Only those of you that purchased a home from 2004 to 2009 may be underwater. The rest of you are still getting more than you paid. If you bought and sold then you still might be ahead. It is a great time to move up. Sell your home at a fair market value and shop for a deal. Or, move up by improving your home to a home that will do better in the future. Example: Sell that home that backs to a road or is older and a little dated and get a updated better location..
Tip 7: Think long term.
Buyers, make sure you look for a home that suits your long-term needs, look at schools even if you don't have kids yet, but plan for them in the future. Think functionality, neighborhood, location, access to services, highway access, work routes, schools, relatives and mass transit, and not price only. Do your homework, keep a cool head and carefully examine all the options. The longer you keep a home the better it will be for long term wealth, making a mistake can cost you a lot since it cost 10% to move. Now there are still going to be deals for maybe one more year, and in these there maybe exceptions, but that is a longer story. A house is a habitat first, an investment second but when done right it can be both.
Tip 8: Energy largesse.
Through Dec. 31, 2010, homeowners who buy and install specific energy-efficient windows, insulation, roofs, doors and heating and air-conditioning equipment can get a 30 percent tax credit for up to $1,500 of their costs on each product.
If you want to take it a step further, you can buy greener (and more expensive) energy-saving products, including solar energy systems, geothermal heat pumps, small wind systems, residential fuel cells and micro-turbine systems, and get 30 percent tax credit with no spending limit on each system, through 2016. Go to EnergyStar.gov's Federal Tax Credits for Energy Efficiency for a complete summary.
Tip 9: Consider rent-to-own deals.
The current market has driven many former homeowners into rentals, where they have nothing to show for their payments. Rent-to-own or lease-to-own deals allow buyers to "test drive" a home for a designated period while paying a higher-than-market rent to buy down an eventual down-payment. This gets renters vested in a home while they repair their credit and also helps frustrated sellers generate an above-market revenue stream. Make sure you have an agent that understand the pitfalls and use a very specific contract that spells out all the options.
Tip 10: Don't take or make it personal.
Our homes have such a personal connection to us that we're often challenged to turn them back into just plain houses when it's time for us to sell. It is always best to remove personal effects such as too many pictures, knickknacks, mementos, trophies, greeting cards and the like before showing a house. A good agent or one of our home-stagers can emphasize the positives of a room and down play the negatives.
The buyers want to imagine themselves in the house for years to come and your excess decor and whatnots only distract from this vision. And don't get defensive about any changes that a buyer may want, keep your eye on the ball you want it sold and move on.
Buyers remember, it's only paint and or carpet, don't miss out on the right home over the belongings or colors of the Seller.
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