Northern Virginia's Market is giving first time buyers the blues!

Real Estate Market Trends for September in Northern VA The Northern Virginia Association of Realtors® reports on September 2009 home sales activity for Fairfax and Arlington counties, Alexandria, Fairfax & Falls Church Cities, & towns of Vienna, Herndon and Clifton. A total of 1,684 homes sold in Sept. 2009, a 2% increase above Sept. 2008 home sales of 1,650. Active listings decreased by 24.40% from last year, with 6,889 active listings in 9/09, compared with 9,112 active homes available in Sept. 2008. The average days on market (DOM) for homes in September 2009 decreased by 32.26% to 63 days, compared with 93 days in August 2008. The Average Sales price increased 4.94% Sept. 2009 averaging $427,881, compared with last Augusts’ average of $407,748. Pending home sales in Northern Virginia in Sept. 2009 increased 13.22 % at 2,012 units compared to 1,777 in Sept. 2008. First Time Buyers Have the Blues in their Quest for “Affordable” Homes under $300,000 in Northern VA Our team has routinely experienced 5, 10, even 25 offers presented on some of our affordable listings, and our buyers have written multiple offers on many different properties. Here are some comments from other agents in our company representing buyers seeking affordable housing showing their frustration: “We are pounding our head against the wall. We have quite a few FHA buyers in that area and we are losing out to cash and conventional buyers on a regular basis. It is very frustrating…especially on a $250,000 deal” “One of the problems I see as a listing agent is the bidding up – banks are not necessary taking the highest offer because they are concerned about the appraisal – so conventional with more money down is winning a lot” We’ve been in multiple offer situations for many months. Here’s the trick: in addition to writing a full price offer w/no closing costs, we did put a modest escalation clause in place (they could only go so high), but most importantly my lender spoke w/the listing agent to assure him of the solidity of my buyer’s financial ability, and solid nature of their approval. It was JUST the ticket to tip the scales in our favor. Incredibly happy clients (& new home owners now), with both their agent and their lender” “My experience is that CASH buyers are putting bids in for those homes in that area and they have the money to bid up, and fix them up and resell them. Some of them coming back on the market with the new owners are making $50000. That is the problem. I used to do bids on HUD/foreclosed homes in Maryland, and always won them for my clients, they look at the bottom line that they want and the same I'm sure applies today, they want the asking price or 10% above, no Seller Subsidy, if you want a seller subsidy you have to add that on to your contract price. “That is all I know. Hope other Realtors can give you more insight” “No, one buyer was able to switch to conventional. Had 48 contracts bidding for one house in Annandale, and we lost out again” “We just lost a contract with 20% down, $40K over list price with a conventional loan, settle in 30 days losing out on a $224K list price foreclosure in Fairfax with 17 offers! Not easy anywhere” I know the feeling. It certainly appears to be the norm these days rather than the exception. We put in several as well before we got one to go thru. What we did was put in an escalation clause but you have to be careful with that and make sure you protect your client. Specifically, don't waive the appraisal clause & do you homework & try & get a feel for where you think it will appraise” I know your frustration. I am having the same problem in Lakeridge. Some sellers are not taking FHA loans. Please forward any info or suggestions” “It takes time and perseverance! Be there the day the house comes on the market, write and submit the contract same day. (Some times you just get lucky depending on the listing agents practices.) Inquire often regarding quantity of offers received. Always be prepared for best and final round and bid to your clients maximum capability! It sometimes requires 30K over asking price....and then you contend with appraisal issues! I am averaging 8-12 offers for FHA and VA clients....VA clients are even more difficult! It is doable, just a whole lot of work for lower income properties” “I am experiencing the same thing. My client is FHA on a townhouse in Centreville and there were 25 offers and lost out to higher price and conventional financing. We have done this about 5 times now. No inventory” “I had same experience with my client, with multiple offers over list price we were getting outbid and just not getting contracts accepted. My client finally and fortunately was able to go conventional. Next property we wrote on had 15 offers and we got it. My team leader also list's foreclosures for banks and we get a lot of offers on each one, usually some cash offers as well. With banks usually accepting cash and conventional contracts It could be really difficult for your client, unless your client can go conventional I think her best chance is to go in high and hope they pick your offer. Might have to go higher with offer than you think with multiple offers. Good luck.” Same frustrations here . . . especially Manassas Park. I’ve got one client I’ve written 7 offers on ….. aaarrrggghhh”