Overall Market Continues To Improve!

The market continues to see signs of improvement throughout the area serviced by our multiple listing service. Check out these statistics for the week ending 3/14/09 compared to the same week last year: 

• New Listings:          Down 22.6%
• Pending Sales:        Up 19.4%
• Active Listings:      Down 20.6%
• Months Supply of Inventory (as of Feb):     Down 15.4% (7.6 months supply)

And some of the best news for anyone looking to buy a home: The Housing Affordability Index is at the level we were at in early 2003! This index is at 154 right now, which means that the median income in the area is 154% of the necessary income to qualify for the median priced home under prevailing interest rates! This is fantastic news!

This information is great for BOTH buyers and sellers! For sellers, you have less competition, and if your home shows well and is in a first time homebuyer market, it will sell. While it is still soft on the upper end market, the entire market is improving. This spring is a great time to sell! Certainly the best time since 2005!

For buyers, it is an unprecedented time to purchase a home! Low prices, lowest rates in history, an $8,000 TAX CREDIT for first time homebuyers (It is much different thisyear than last; please consult your accountant for full details!) is creating multiple contract situations on low priced homes. Houses are again going for list price or higher in that market segment.

One of the best things I see happening in the market is that investors are flooding into the market, buying many of the properties with cash, and getting great returns from rent. The next thing that will happen is that people renting, that are able to buy, will realize that they can own for less than they are paying in rent, and this will increase demand further.

To me, this is all evidence that we have reached the bottom of the market in the DC area. If you haven’t already bought, don’t miss out on what will most likely be the most opportune time in the next decade or two to buy a home!!

Make a Move- To the Shenandoah Valley!

Warren County was the place to move to in 2005. Affordability was the main reason. Home buyers came to Front Royal and bought their dream home for the price of a small condo in Northern Virginia. It was too good to be true, right? Minutes from I66. Close proximity to all the best wineries. Gorgeous mountain views, every where you turn. After the gas prices began to rise and property values dropped, all this sudden it wasn’t so great. The wonderful affordable homes declining in value offered no relief from the rising cost of gas. Many buyers once considering buying the serene mountain retreats in the Shenandoah Valley disappeared- over night. Now that gas prices are down and home sales are looking up in Warren County, hope is restored! So why wait- make a move now!

Warren County is back. Front Royal is no longer “that little tourist town with cheap houses and no shopping”. The 2006 cencus confirmed that the population in Warren County was 36,102. The town officials have worked hard to bring in businesses who are providing convenient shopping opportunities to the residence. The citizens of this growing town are chirping with contentment to be able to shop at Lowes, Target, Walmart, and  the money for taxes going back into the community and schools their children and grand children attend. There are two very large brand new shopping center with every store imaginable. Plans are in the works for another shopping center.

Did you know that Front Royal is the Canoe Capital of Virginia. It’s the place where the Skyline Drive begins.  There is a flow of tourists through front royal, but who could blame them? I’d come here all the time if I had to live somewhere else. The Shenandoah River promises weekends of fishing and fun. Skyline Caverns are one of the most magnificient attractions in the Shenandoah Valley. Walk down historic Main Street. Charming shops and Mom and Pops restaurants line the streets. Classic Americana at it’s best!

Many of the new residents of Front Royal come from other areas. To answer a question I am constantly being asked- Yes, the Warren County Public School system is excellent.  The High Schools are educating the youth of this community to adapt to life beyond high school. The students are receiving career training and technical education through work study programs that have been implemented. Career programs are in place at each of the brand new high schools which are both fully accredited. Local businesses within the community offer scholarships to the graduating students. Front Royal offers private education as well, with 7 private schools facilitating the area. One of the country’s most prestigious schools, Randolph Macon Academy is right here in Front Royal. Students attending this prestigious school are from all over the country- some are from other countries. Can you imagine having a learning facility like this available to your children, within minutes from your home? The parents in Warren County receive this option of convenience.

Homes sales in Warren County are on the rise. In February of 2008 there were 22 units sold. This past February, 2009, MRIS reports that there have been 25 home sales. This is a step back into the right direction for the Real Estate market in Warren County. After all, there were 28 sales in 2007- that’s only 3 more than 2009 and 6 more than 2008. Sales are slowly rising again! Warren County is the place to be and I’m excited I’m here. If you were waiting for the bottom of the market- you may just have missed it. We have relocation packages available. Please email your address [bethbarnett@mris.com] if you would like a FREE information package delivered to you.

If you are looking to get away from the city for a fun day in Front Royal on Main street- attend the Annual Virginia Wine & Craft Festival on May 16. Remember to stop by the Avery-Hess Booth and tell us how much you love the Shenandoah Valley!

For a walking tour of Front Royal or more information on the Shenandoah Valley, contact Beth Barnett with Avery-Hess, Realtors at 540-533-4793 or bethbarnett@mris.com. You can also search for information on-line at  www.barnett-homes.com

Are You Ready?

We’ve been getting bits of encouraging news regarding the recovery of the housing market. There are positive signs that lead to optimism. Unlike most periods of economic upheaval where there is a gradual decline followed by a down time and then a gradual rebound, this current recession defied the conventional wisdom. Nearly 4 years ago, almost overnight it seems, the real estate market just collapsed. We certainly should have seen it coming but most people were just oblivious. Some experts will say we haven’t seen the bottom yet, others think we have. Again, don’t listen to the nightly news, it’s more local than what they report. I believe we’re heading back to normalcy.

So let’s focus on recovery. The initial signs are here. In February, housing starts were up and building permit requests were higher than they’ve been in years. The Fed is investing billions of dollars in securing long term T-Bills with the effect of lowering mortgage interest rates. The administration’s Stimulus Package allows for a 1st time homebuyer tax credit of $8000. The time has never been better to purchase a home.

Do you have a plan? If you made a decision to go on vacation, you wouldn’t just jump in the car and start driving somewhere (although that could be interesting). You would begin to plan by searching for destinations, airfares, hotels, routes, rental cars, entertainment options, etc. A lot of planning before you spend a few thousand dollars for a memory. You are about to decide on the largest, and most important purchase in your life. It should require a lot of careful planning and guidance from a trusted counselor.

Avery-Hess, Realtors has provided our clients and customers with the perfect roadmap to follow from the time you decide to purchase, through the entire process, and beyond move-in day. Our web site, www.averyhess.com, allows you to find your home, learn all you need to know about the neighborhood and the community, including where to find schools, hospitals, restaurants, shopping, churches and more. In addition you can find the average price of gas and calculate the cost of your commute. There is a mortgage calculator to help you calculate your house payment. You’ll find our relationship partners who will save you time and money from moving companies to purchasing appliances at a discount. All of this and so much more from the comfort of your home. When you’re ready to put your plan into effect, you’ll find that our agents are experienced, knowledgeable, patient, and your partner and advocate.

Don’t miss out on the opportunity to find your perfect home. Don’t assume it’s out of your reach. On your mark, get set, GO.

SEARCH FOR HOMES: www.averyhess.com

Multiple Photos = Happy Consumers

An interesting aspect of running Avery-Hess’ E-Commerce department is the opportunity it affords me to speak directly with today’s Real Estate Consumer. I talk with and assist rougly 100 or so consumers every month, and the conversations touch on a wide spectrum of Real Estate information and issues. Tonight, I had an interesting conversation with a consumer I will call “CONSUMER X.” CONSUMER X had requested some information via our website (www.averyhess.com) around 5:30 pm. I emailed CONSUMER X back and mentioned that I would call later this evening to see how I could assist.

I called and spoke with CONSUMER X around 7:15 pm, and our conversation lasted nearly an hour. CONSUMER X had a lot of questions about Real Estate, which was great, but CONSUMER X was frustrated as well. Frustrated at the lack of pictures available on listings of interest. If I recall correctly, I assisted CONSUMER X with information about 4 properties, (1 Avery-Hess listing and 3 which were listed by other brokers). The only listing with multple photographs showing the property was the Avery Hess listing. The other 3 listings had the following amounts of pictures respectively: 1,0,1. (Before I go any further, here is a shameless plug for myself and Avery-Hess: CONSUMER X is now working with an Avery-Hess agent to look for a home). But now back to the point of my post.

• It is 2009.
• 99% of consumers start their home search on the Internet.
• The Internet IS NOT GOING ANYWHERE
• CONSUMERS LIKE TO LOOK AT PICTURES OF HOMES THEY MAY CONSIDER PURCHASING.
• There is ABSOLUTELY NO EXCUSE for not having multiple photos on your listing if and when you list a home for sale.
• If you do not have multiple photos of your listing(s), GO TAKE SOME PICTURES OF YOUR LISTING(S) AND POST THEM.

I am proud to say that the majority of Avery-Hess listings DO have multiple photos posted. Kudos to all of our agents who work hard and represent their clients well.

On-Line is where consumers look for homes. Listings without multiple photos are routinely passed over by Consumers. Why? Because TIME is valuable. If you are spending your free time (which for many is at a premium) and you can find 20 Listings with 25 photos each, or 20 Listings with 1 photo each, which ones will you spend the time on?

MORAL: Post Pictures. Lots of Pictures. It makes Consumers Happy. It makes me Happy. It will make you Happy.

SEARCH FOR HOMES (and view multiple photos on thousands of listings): www.averyhess.com

Interest-ing Information about Interest Rates

We have seen mortgage rates that were already at near historic lows edge down even further in recent weeks. Depending on personal situations, prospective home buyers are looking at interest rates for 30-year fixed mortgages in the 4% – 5.5% range. Our mortgage partner, Choice Mortgage (an affiliate of Wells Fargo Home Mortgage), has today’s rate displayed online at 4.625% with 1 point.

WOW. WOW. WOW.

Even if rates go up a anywhere from half a point to a point and a half, these are still unbelievable deals!

But really, what does a drop or increase in interest rates mean? How does this affect you? How does this affect your payment on your mortgage should you choose to buy a home this year?

Depicted below is a sample interest rate chart that shows how different interest rates affect your monthly payment (On a sample home purchase with a mortgage of $200,000):

Fig. 1.1 - Sample Interest Rates on a $200,000 Loan

Essentially, a 0.5% reduction (or increase) in interest rate on a $200,000 loan roughly equates to a $55 – $65 reduction (or increase) in your monthly payment. While a half-point reduction in rates may amount to a small monthly savings, ultimately, “Interest Rate Day-Trading” is a game I would caution us all about playing.

Folks who try and time their home purchase to take advantage of the absolute lowest interest possible are taking a risk. What if rates go up? What if home prices go up? At what point will a rise in home prices offset any savings you get through a lower interest rate? A modest 2% – 6% increase in home prices could offset any potential savings gained through trying to time a home purchase around getting the absolute lowest rate.

There are ways that you can take advantage of this unprecedented buyers market we are experiencing right now – and still protect yourself with respect to interest rate when obtaining a loan.

Inquire with your lender about the possibility of a float down in interest rate should a better rate surface for you prior to settlement. There is typically some cost associated with obtaining a rate float down, but in many cases these costs are tax-deductible if they come in the form of points on a loan – a great benefit come tax-time.

One last thing to keep in mind when shopping for interest rates and the perfect time to buy a home – THE $8,000 TAX CREDIT FOR FIRST TIME HOMEBUYERS! This tax credit is available to first-time buyers who purchase this year and settle on their home PRIOR TO Dec. 1, 2009. If you decide to play the “Interest-Rate Day Trading” game and miss out on this credit to save half a point (let’s say $65 a month on your loan), it will take 123 months (or 10 years) to make up the difference in the full $8,000 credit. Considering folks tend to spend about 7-8 years in their home before moving on…. Well, you can do the math.

Ultimately, making the decision on when the right time to buy a home is a personal one –  but bear in mind that there are many factors to consider, not just the interest rates.

*Disclaimer: Charts and examples shown for illustrative purposes only. For information pertinent to your personal situation, please contact your lender or Carl Mazzan at carl.mazzan@wellsfargo.com or Don Metcalf at donald.metcalf@wellsfargo.com.

Search For Homes: www.averyhess.com

Short Sale or Long Sale- Is it worth it?

About 3 years ago I met with a man who was losing his home to foreclosure. I mentioned to him the option of a Short Sale. He looked at me like I was from another planet. After a brief explanation, he didn’t understand why he was just hearing about this. He had no clue you could sell your home for less than you owe on it with the lender’s approval. As an informed home seller, he became hopeful. The Short Sale is now a term that people are familiar with. Clients I first meet with think of a Short Sale as a quick way to sell or buy a home. They don’t know it’s a long process. That’s why it’s important to be informed. Often I wonder why the transaction is not called a Long Sale. It would be more appropriate.

The Short Sale takes longer because there are many people involved. You must get approval from the loan company, who will order a Broker Price Opinion (BPO). Consultation with the mortgage insurance company is needed. If you have more then one mortgage on the home- that company will also be involved will their own set of loss mitigation consultants. A lot of paperwork is reviewed and approved in order to get final approval. You may wait one month to six months to even know if your contract is approved. The Short Sale process is long.

If you are a seller who is contemplating a Short Sale on your property, consult a Real Estate Agent. At Avery-Hess, Realtors, we have many agents with experience on the Short Sale process. You will want an experienced Short Sale agent to handle the sale of your home. Become informed by scheduling an appointment for a Market Analysis to assess the current market value of your home- (it’s FREE) Find out if a Short Sale is actually necessary.

If you are a buyer, do not be intimidated by Short Sales. While they are not for everyone, for others Short Sales can be an excellent opportunity. Certain banks will approve a Short Sale prior to contract. Have your buyer’s agent call and find out if the home you are interested in has an approved Short Sale price. This can speed up the approval process of your contract if it’s an “approved Short Sale”. Meet with your Real Estate agent and assess your situation. If you do not have a deadline that you must close by, chances are, a Short Sale may not be a problem for you. When you select the home of your choice and it’s a Short Sale- be prepared for the transaction to take a longer time than normal. In the end, it will be worth it.

When dealing with a Short Sale property, be informed. It’s very important to know all the facts before hand. Be prepared to wait a few months. It will take some of the stress off of you and make the process a better experience. The main thing is to be informed by a reliable source. Once you know all the facts, you can assess your own situation. I know most of my clients will say, “It has been worth it”. What is your situation and is it worth it to you?

For more information on listing your home as a Short Sale/Short Sale Properties available in your area, visit www.barnett-homes.com or call (540)533-4793 and ask for Beth Barnett.