Thursday, November 29, 2007

Chicken Little Never Had It So Good

I’m sure everyone has seen the latest doom and gloom, “S&P: 3Q home prices fall by 4.5 percent.”

“U.S. home prices fell 4.5 percent in the third quarter from a year earlier, the sharpest drop since Standard & Poor's began its nationwide housing index in 1987 and another sign that the housing slump is far from over, the research group said Tuesday.”

I’m not here to sugar coat market trends. By now, Sellers would have to have their heads buried in the sand to believe that their house is worth what it was a few years ago. However, with the continual “Chicken Little” reporting, it’s surprising that any Buyer has the courage to venture out into “the market is falling” world.

But let’s keep things into perspective.

Yesterday, the Dow jumped 331 points and had its best two-day rally in five years. While the traders continue to high-five, let’s remember that for the past five years, the Dow has had its own struggles. Yet despite its “Chicken Little” media, the Dow maintained around a 5% growth rate. What’s this got to do with the housing market?

In April 2002, I bought a townhouse in Northern Virginia for $242k. In 2005, it appraised for over $482k. Today, I’d be lucky if I got $400k. Now, I can look at the current situation in a couple of ways. (1) Cry how I’ve lost almost 20% on the price in the past two years; or (2) Celebrate the 11.9% annual growth rate seen over the past five years.

I’m not a financial advisor; but I am a thinker. Like the Dow, the housing market fluctuates. Like with stocks or mutual bonds, the average buyer purchases a home for the long term. Like the Dow, home prices have historically increased over the long term. For past few years, it was reported that many Buyers were discouraged from buying because of affordability. Now “Chicken Little” wants Buyers to be discouraged because prices are dropping?

What I see is an opportunity. As prices drop, more people will be able to afford to purchase a home. Serious Sellers can encourage offers by being reasonable on their list price. For most, there is enough room to lower prices and still make a hefty gain. Buyers who are waiting for signs that the market has hit bottom run the risk of missing the window. Just as quickly as prices shifted downward, they can reverse. From what I can see, the housing market has created a situation that should be bringing Sellers and Buyers closer together. With the strong job market, low interest rates, and a good local economy, I see a forecast in which even “Chicken Little” can enjoy the view.

Wednesday, November 28, 2007

It's All About The Children

A friend recently asked me how “How’s the market doing?” Of course, “the market is good; and at the right price, with the right Realtor and proper showing, any house will sell.” “Sure, sure …” she said. Somehow I don’t think I convinced her.

Sound familiar? Of course with the media blasting doom and gloom for the past two years, who can blame her for having doubts? So where is the good news? Well, let’s connect a few dots.

(1) Earlier this week, Express reported that local public school enrollment rose. Prince William County is now the second largest system in the state behind Fairfax which is 13th in the nation. Additionally, Loudoun County showed the fastest growth rate in the Washington area at 7%.

(2) Over the past 12 months, 47,600 new jobs were added in the Washington area. This is 5.8% above the 15-year annual average. Northern Virginia created 41% of these new jobs and it is projected that job growth will continue to increase upward to 49,000 by 2009. (MRIS “Trends in Housing)

(3) Approximately 25% of the U.S. population is a homeowner with children under the age of 18. (HUD Report)

(4) Approximately 46% of first-time home buyers have children under the age of 18. Roughly 49% of repeat buyers have children.

OK, thanks for all the numbers, right? The point is that the Washington area continues to maintain a solid job growth. As employment increases so does the demand to purchase a home. Northern Virginia is projected to bring in almost 20,000 new jobs in 2008. Of these, roughly 8,000 will become homeowners with children. There is no coincidence that this number matches the reported new enrollments figures. The influx has already begun as evident by the additional yellow buses you are seeing.

So, like I told my friend: “The market is good.”

Tuesday, November 27, 2007

You Will Be Missed


1983 - 2007


Monday, November 26, 2007

Buyer Series - The Home Buying Process

For the first time homebuyer, the home buying process can seem intimidating. Even those who have gone through the experience may not recall all the steps. To make things easier, I have created a flowchart of the home buying process. I use it with my clients during our initial meeting. It helps to explain things visually.

If you would like to use the file, please feel free to download it.

Saturday, November 24, 2007

Information Overload

I did a Google search on "homes for sale in Gainesville, VA." I got 567,000 results in .16 seconds. Nice to get so many results so fast. There are currently 462 active listing on the market in Gainesville. Recent sales show the average days on market at 99 days. With so much information available, I'd recommend having your local REALTOR keep it simple for you.

I hope this post is as useful as the 567,000 web sites that claim to have Gainesville, VA homes for sale.

Friday, November 23, 2007

Ashburn is Zillow’s most watched Northern Virginia ZIP

According to online housing tracker Zillow’s math, Ashburn’s 20148 ZIP was the most intensely eyeballed Northern Virginia neighborhood in the third quarter. That’s based on Zillow counting the number of property search made on its site by ZIP vs. the number of homes in that ZIP. Here’s the Top 10 …

1. 20148, Ashburn
2. 20105, Aldie
3. 20152, Fairfax
4. 22066, Great Falls
5. 20147, Ashburn
6. 20166, Dulles
7. 22182, Vienna
8. 20176, Leesburg
9. 20171, Herndon
10. 22101, McLean

Three Northern Virginia ZIP codes were at the bottom of the list … 22305 (Alexandria), 22311 (Alexandria), 22060 (Fort Belvoir).

To see the report that contains these rankings, CLICK HERE