We have fielded many calls over the past few weeks from clients, friends and associates curious about what's going on in the real estate market. So, I thought I would take a moment and share my insights here.
Real estate is a very "local" phenomenon. Unfortunately, the news media generally is not. Accordingly, consumers are influenced by national stories that may or may not apply to our local market.
Here is some good news: "Hampton Roads had the fifth lowest rate of home foreclosures out of the 100 top metropolitan areas in the first half of 2007. The ranking comes from Irvine, California based RealtyTrac, which lists and compiles foreclosures nationwide.
According to the firm, the region had one foreclosure for every 787 households. The area with the highest rate was Stockton, California, with one foreclosure for every 27 households. RealtyTrac claims that Richmond has the lowest rate, with one for every 2,319 households."
In the past year, we have seen the market shift to a "buyers" market, largely due to the increasing level of available inventory of homes for sale. It's important to note that the number of pending sales is holding relatively steady; in other words, the same number of buyers are in the marketplace. However, because the number of new listings continues to grow, there is a backlog of unsold listings each month.
That is great news for buyers ~ there is a wide variety of choices right now. And, for the most part, sellers are willing to negotiate terms and concessions for the first time in 4 or 5 years.
The volatility in the mortgage market has been quite unsettling, and we have felt its effects locally with the closure of American Home Funding. SunTrust was quick to take over its local assets (leases and loan originators), though, and for the most part, loans were assigned and closed relatively expeditiously. We are definitely seeing a reduction in the number of loan programs available, especially those high risk options, such as 100% financing, interest only, and low or no documentation loans.
Many of us have been predicting this outcome for a number of years now, and although it has unfolded with a bang, I believe it is a healthy correction to the market that is frankly long over due.
In our market, real estate values are holding steady. I don't expect to see major gains in appreciation in the coming months, but most homeowners have seen such growth "on paper" in the preceding 5 years that there is plenty of equity to handle a slight downturn in values if that should happen, and still come out with a healthy positive gain averaged over time.
For sellers, the key is to plan in advance, as market times are increasing. Pricing aggressively is important, as well as hiring a Realtor who is well versed in target marketing, and can counsel effectively on timing and positioning. And, the good news for move up sellers is that they generally will make up on the buy side, any ground that they may lose on the sell side!
For additional Info contact John Womeldorf/ Liz Moore & Associates 757 254 8136
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