From Centreville to Vienna to Arlington and points in between, homeowners have already received (Arlington) or will shortly have their new real estate tax assessment in the mail. (Fairfax County assessments will be available 2/28) I am guessing most will be higher than last year since we had an overall 3% increase in prices in 2011.
I am often asked if the assessment is reflective of market value and the answer is
I must admit, I am a bit of a stat nut. I have detailed sales and inventory data for the Northern Virginia market for the last 15 years and additional sales data going back to 1975. (Using baseball parlance, I might border on being called a seamhead) Don’t worry, it is safe to read on. My blogs will never get too deep into a statistical interpretation of the market. I will leave that to others. Under the Market Stats tab above are several good resources for those interested in viewing a stunning array of charts and graphs. Here we will just review very simple data that can help a buyer or seller in deciding what time of year may be best to act.
For years I have kept a record of the market stats. I have tried to keep my summaries simple. I look at the 3 major categories of housing: single family detached, townhomes and condos. Through different market cycles, they move in different directions. I also pay attention to days on market, inventory levels and the percentage of sale price to list price.
For a more thorough analysis, I would recommend clicking on the Real Estate Business Intelligence link under the Market Stats tab above. There you can not only look at a variety of charts and graphs but can drill down to very specific sub markets including zip codes.
The chart below gives you a good overview of how 2011 compared to 2010. The numbers reflect activity in Fairfax County, Arlington County and the cities of Alexandria, Falls Church and Fairfax.
Often homeowners move up because of a life event. Perhaps two single homeowners are getting married and need to sell their current homes and buy a home better suited to their new life. (A Realtor’s dream – 3 transactions!!) Or perhaps an expanding family requires more space. Or a wonderful career opportunity pops up outside of Northern Virginia.
However, other moves are discretionary. The homeowner has the financial resources to move to a new home and desires to do so for a variety of reasons; more space, bigger lot, smaller lot, more amenities, better schools, etc. The actual timing of the move is not critical so these folks often ask, “How is the market? Should I do this now or wait?” There may be some personal financial factors that dictate the proper response but the market is not really a factor. Here’s why.
Recently I wrote a blog outlining the basics of buying foreclosures, short sales and other distress property. I mentioned in that post that short sales are a vast wilderness with many pits, traps and paths leading nowhere. The stories below reinforce that statement. These are real cases I have worked over the last few years. The names and some other data have been modified to protect privacy but the key points are accurate and, most importantly, the timelines are real. The moral of all of these stories is that before deciding to pursue a short sale, make sure you have enough time and resources to wait for the bank to make a decision. If you are one who likes certainty and control, the short sale world is not for you. There is very little the buyer or buyer agent can do to shorten the time between contract and settlement. The pace of the transaction depends on the bank negotiator, the seller and the listing agent. On to the stories….
Many buyers ask me about buying foreclosures or short sales thinking they are the “best” deals. I have helped buyers, particularly investors, make great below market acquisitions but just because a home is a foreclosure or short sale does not mean it is a great value. And, more importantly, depending on your situation and goals, distress property may not be the right type of property to consider.
Below is a brief review of the pros and cons of foreclosures and short sales. I also have some comments on court ordered sales, another type of distress sale but one that is not as prevalent as the other two.
The standard sales contract used by Realtors in Northern Virginia, DC and the Maryland suburbs will be changing as of January 1. Our contracts and forms have always changed over time and most changes are of minor consequence. However, this revision includes a change that drastically alters the way a home is conveyed.
I have always felt that our contract was fairly balanced between buyers and sellers. There were terms in the in the contract that buyers didn’t like and others that bothered sellers but when each side has a little pain, it is probably fair. This latest major revision includes a significant seller friendly modification.
In the new contract, there are lots of the usual minor semantic changes like substituting “legal expenses” for “attorney fees” and adding that all definitions of time are based on east coast time. But the big one
Almost all purchase contracts contain a contingency for a home inspection. And those that don’t, really should. There are some contract contingency clauses that are marginal. In a multiple offer situation, some of these may be passed over to make your contract more attractive. The home inspection contingency should not be on that list. Even in a foreclosure or short sale when you can not ask the seller to execute repairs, you still need a home inspection contingency. In that case the contingency will contain wording that if the inspection reveals conditions you can not deal with, you have the right to void the contract.
So that leads to the question of how to pick an inspector.
One of the most powerful tools in the real estate investors arsenal is the 1031 exchange. In our current market cycle with a great disparity among markets throughout the country, now may be an great time to take advantage of this opportunity to expand and diversify your real estate portfolio. It could be a time to sell high and buy low.
A few years back, there were several 100% or no money down financing programs available. Many were quite dangerous, had adjustable rates or negative amortization and were a major contributor to the housing crisis. The 3 programs I will examine in this article are all 30 year fixed rate programs and much safer. One is from a local bank, one from the Virginia Housing Development Authority (VHDA) and one is from a credit union.
