Thursday, January 31, 2008

President Bush made two real estate references in his seventh and final State of the Union. From the prepared text …

To build a prosperous future, we must trust people with their own money and empower them to grow our economy. As we meet tonight, our economy is undergoing a period of uncertainty. America has added jobs for a record 52 straight months, but jobs are now growing at a slower pace. Wages are up, but so are prices for food and gas. Exports are rising, but the housing market has declined. And at kitchen tables across our country, there is concern about our economic future.

… and …

On housing, we must trust Americans with the responsibility of homeownership and empower them to weather turbulent times in the housing market. My administration brought together the HOPE NOW alliance, which is helping many struggling homeowners avoid foreclosure. The Congress can help even more. Tonight I ask you to pass legislation to reform Fannie Mae and Freddie Mac, modernize the Federal Housing Administration, and allow state housing agencies to issue tax-free bonds to help homeowners refinance their mortgages. These are difficult times for many American families, and by taking these steps, we can help more of them keep their homes.

To read more, CLICK HERE.

No More Builder Incentives?

Read this snippet from a transcript of builder Centex’s recent conference call with Wall Street analysts (Thank you, Seeking Alpha!) …

Alex Barron - Agency Trading: Hey, guys. Wanted to ask you questions on this transparent pricing strategy. I guess, I am just trying to understand it seems to be obviously working and it seems pretty logical so I am trying to figure out why do you suppose other builders aren’t copying what you are doing and if they did what would you do compared to that or relative to that?

Timothy Eller - Chairman and Chief Executive Officer: Well I don’t know the answer to that. I would speculate that from standpoint of some private builders they may just not have the ability to do that. And based on the further question, what we are seeing is increasingly more and more of the public builders doing… doing just that because it’s it really is the reality of where the mortgage markets are today.

Cathy R. Smith - Executive Vice President and Chief Financial Officer: And then that’s a good thing we compete on community locations in our product. And that’s a good thing for us.

Alex Barron - Agency Trading: But, basically what your saying is rather than, let’s say, as an example instead of selling at $250,000 home with $50,000 incentive, all you doing is doing that your are selling it for $200,000. Is that basically the idea?

Timothy Eller - Chairman and Chief Executive Officer: That’s the idea. That’s basically… that… it’s back, its back to the way it used to be.

Centex is a nationwide builder currently selling homes in Orange (pictured at right.) To read the rest of the transcript, CLICK HERE

Wednesday, January 30, 2008

Fed cuts half point

The Federal Reserve cut its key interest rate another half-point, to 3%, as part of a continued effort to keep the U.S. economy from falling into a recession.Here’s the Fed’s thoughts on housing …

Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets.

To read the entire Fed statement, CLICK HERE!

Pimco Fed watcher Paul McCulley says … “The right stuff — half percent, with a balance of risks statement skewed to concerns about growth, leaving the door open for more. ben is honoring the covanent he made with the markets on Jan 10: You become more risk seeking and I will back you. Yea verily, he has.”

Thursday, January 24, 2008

Stimulus may boost lending

It might become a little cheaper to buy a home. Part of the government’s economic stimulus package announced Thursday (DETAILS HERE) would boost the size of so-called “conforming” mortgage loans (under $417,000) bought by government-sponsored agencies. That move could allow more borrowers to find lower rates when buying a home or when refinancing an existing mortgage.

The current limit is $362,000 for Federal Housing Administration loans and $417,000 for loans sold to Fannie Mae and Freddie Mac. Interest rates are lower for “conforming” loans, and “jumbo” loans exceeding those amounts have become much harder to get since the credit crunch hit last summer.

Meanwhile, the Mortgage Bankers Association reports today on a mini-refinancing boom nationally. Refi applications are up 92% since November, the group said, and up 16.9% last week from the week before. Refi applications made up 66% of all apps last week. And average rates for 30-year loans, conforming of course, dropped to 5.49% from 5.62% a week earlier.

Monday, January 21, 2008

Holy Trinity Church to Open Doors in February

Arlington Bishop Paul S. Loverde will dedicate Holy Trinity Catholic Church in Gainesville, Virginia:

11 a.m., Saturday February 2, 2008

Holy Trinity Church 8214 Linton Hall Road, Gainesville, VA 20155

“The dedication of the newly-completed Church of the Holy Trinity in Gainesville is not only a blessing for this parish family, but also for our entire diocesan Church. I pray that present and future members of this Parish of the Holy Trinity will experience within these sacred walls the living presence of Jesus Christ, who will unite them in giving praise to God our Father in the power of the Holy Spirit and strengthen them for their witness to truth and to charity in the world,” said Bishop Loverde. (Catholic Herald)

Construction began in February 2006 and was funded by the parish’s Founding Families capital campaign and the Rooted in Faith-Forward in Hope diocesan capital campaign. Photos of the church are available at

“We are very excited to finally have a home in Prince William County and we are looking forward to being in our spiritual home; to worship God as a parish and be able to provide the sacraments. Holy Trinity Church is a beautiful setting to glorify God and the Blessed Trinity,” said Father Francis J. Peffley, Pastor of Holy Trinity.

The church’s Irish gothic-style pillars and arches, paired in threes, symbolize the Holy Trinity. A focal point for the 80,000 square foot Church is the main stained glass window, which has three rings made out of pre-cast concrete, weighing over 12 tons. The cost for the church, with furnishings, will total approximately $18 million.

Father Peffley celebrated the parish’s first Mass on July 21, 2001 at the Benedictine Monastery in Bristow, Virginia. Since the parish was established in 2001, Holy Trinity Church has grown from 200 parishioners in 2001 to 5,390 parishioners in 2007. To date, Mass for Holy Trinity parishioners has been celebrated at the Benedictine Monastery, Brentsville District High School, and at other area parishes.

Over 400,000 registered Catholics belong to the 68 parishes of the Arlington Diocese, which has opened six new parishes, three new schools, and established three new missions since 1999. Further information can be found at

Friday, January 18, 2008

What's Your Risk?

Mortgage insurers PMI published their latest home-price risk study … and guess who’s near the top? PMI economists juggle price momentum, affordability, regional economics and mortgage-payment problems to come up with their index, that translates to chance of home-price declines in the next two years in the 50 top U.S. markets. Here’s the dirty dozen, PMI’s riskiest …

1. Riverside-San Bernardino-Ontario, CA – 94%
2. Las Vegas-Paradise, NV – 89%
3. Phoenix-Mesa-Scottdale, AZ – 83%
4. Santa Ana-Anaheim-Irvine, CA – 81%
5. Los Angeles-Long Beach-Glendale, CA – 79%
6. Fort Lauderdale-Pompano Beach-Deerfield Beach, FL – 78%
7. Orlando-Kissimmee, FL – 74%
8. Sacramento-Arden-Arcade-Roseville, CA – 73%
9. Tampa-St. Petersburg-Clearwater, FL – 72%
10. West Palm Beach-Boca Raton-Boynton Beach, FL – 71%
11. San Diego-Carlsbad-San Marcos, CA – 69%
12. Oakland-Fremont-Hayward, CA – 65%

… 17. Washington-Arlington-Alexandria, DC-VA-MD-WV – 37%

PMI says: “Are we nearing the end of the current housing downturn? We don’t think so, given the magnitude of the run up in housing (with no significant housing downturn since the recession of 1991–92). That doesn’t mean that the level of housing activity has to fall to 1992 levels—after all there are almost 22 million more households today than there were back then, with higher income levels and lower unemployment rates. But the unsustainable surge of 2002–05 has to be worked off, and that’s what’s going on in the housing market today. The famous economist Herb Stein once noted, ‘If something cannot go on forever, it will stop.’ That is probably the best way to view the housing market today. We know that given the combination of demographics, job and income growth, and the level of interest rates, housing demand can’t fall without bounds.”

To read more, CLICK HERE

Tuesday, January 15, 2008

Dont't Hold Your Breathe

If you are waiting for the Fed to save us, you might want to look elsewhere for your ray of sunshine. In his latest Financial Market Strategies report, Wells Fargo senior economist Eugenio J. Aleman indicates that people banking on a Fed rate cut to spur home sales are looking in the wrong place for help.

In fact, he thinks that even if the Fed slashes rates it would do little to help the market. Here’s his reasoning:

“Let’s say that the Federal Reserve lowers the Federal Funds rate to 2%, does this mean that we are going to start buying homes and U.S. automobiles again? The reason why nobody is willing to buy a home today is not that interest rates are too high; the reason is that home prices are too high. Nobody will want to buy a home today when they know that if they wait they could get the home for a large discount.

“This means that it does not matter what the interest rate is on mortgages; nobody is buying. And thus, it does not matter what the Federal Reserve does with the Federal Funds rate. And I actually believe the Federal Reserve knows this. They are well aware of the ineffectiveness of the Federal Funds rate to help bring back the U.S. housing market and/or the U.S. auto sector. Thus, I still believe that many of the Federal Reserve Governors are going to be reluctant to lower the Federal Funds rate even if they ultimately go ahead with a decrease in the rate on January 30th.”

Aleman argues that the bigger concern for the Fed right now is inflation.

CLICK HERE for full report.

Friday, January 11, 2008

The End of the Buyer's Market!!!!

It’s not my intent to add fuel to the negative fire, but I am beginning to see the end of the Buyer’s Market. Unfortunately, I think it’s the beginning of a “Lender’s Market.” What do I mean by this?

Seller’s Market = Sellers dictate price and terms (Woe to Buyer)

Buyer’s Market = Buyers dictate price and terms (Woe to Seller)

Lender’s Market = Lenders dictate terms and make it impossible to get a loan (Woe to Everyone)

It’s hard to argue that lenders are returning to the practices that did not fail them in the past. A lender’s bread-and-butter is a 30-year, fixed-rate, conventionally amortizing loan based on 80% of appraised value taking no more than 28% of a borrower’s gross income (36% maximum total debt.) This is what is coming and it will be a catastrophe for sales volumes and home prices.
Why would banks continue to loan 90% of value when there is a likelihood of a greater than 10% decline and banks know high loan-to-value ratios result in high default rates? They are doing it now because they have to in order to make any loans at all. But only the very high FICO scores will qualify, and they are betting these people will not default do to moral reasons or the desire to keep that high FICO score. If they try to extend these loans to lower FICO score individuals or subprime borrowers, they won’t stay in business long. Large downpayments are coming back, and government assisted financing will become widely used by first-time homebuyers to overcome the high equity requirements. What other way is there to move forward?

Zillow improves math, 97% of Washington Metro now covered

Online home-price tracker Zillow says it’s deepened its database and upgraded its valuation math (RELEASE HERE.) The company’’s “Zestimates” have drawn healthy criticism for frequent inaccuracies. However, has more homes are brought into the database, accuracy are expanding down to the county level.

Zillow indicates the Washington Metro data now has 97% of the homes with Zestimates, 41% are within 5% of the selling price, 65% are within 10% of the selling price, and 84% are within 20% of the selling price.

Prince William data has 87% of the homes with Zestimates, 43% are within 5% of the selling price, 68% are within 10% of the selling price, and 90% are within 20% of the selling price.

By the way, Zillow puts typical Prince William home values down 9.0% in a year.

Why not try Zillow out and report back what you find about the homes you know best and the Web site’s “new math” …

Thursday, January 10, 2008

58.5% of Moving Vans Arriving in D.C.

United Van Lines’ annual report on where its moving vans take people shows that Washington DC last year again had far more moves IN than relocations out.

United says it had 1,116 (58.5%) inbound moves to DC last year vs. 793 (41.5%) of their business. DC has remained inbound since the inception of the study (1977).

Virginia (51.6%) stayed strong with its 12-year inbound trend. However, Maryland (54.1%) retained its 16-year outbound tradition. Michigan (67.8%) once again captured the top outbound spot, followed by North Dakota (67.2%) and New Jersey (61.0%.) National report IS HERE.

These United Van stats, usually seen as a barometer of management-level relocations, reinforce the notion that many families find the Northern Virginia – D.C. area a good place to call home, particularly due to the strong job market.

I-66/Route 29/Linton Hall Rd Interchange

Below is information from the VDOT Project Website. As one of the many sitting in traffic, I find this to be (1) on the technical side - pretty neat and (2) on the commuter side - long overdue and way too long to wait [2010]
What's being done

Route 29/Linton Hall Interchange Improvement Project is one of the largest construction projects in Virginia. The current total estimated project cost is approximately $181.4M.

The purpose of the Phase IV - I-66/Route 29/Linton Hall Road Interchange project is to construct a grade separated interchange at the existing Route 29/Linton Hall Road intersection, creating a fully limited access facility on Route 29 between Virginia Oaks Drive and Heatcote Boulevard. The interchange will be a single point urban diamond interchange (SPUI), with a braided ramp configuration along southbound Route 29 between I-66, Linton Hall Road and Gallerher Road.

The interchange will include 4 bridges:B632 - Route 29 and Ramp K over Norfolk Southern Railroad

B633 - Linton Hall Road over Route 29

B634 - Route 55 over Norfolk Southern Railroad, and

B635 - Ramp G over Ramp K.

Also associated with this project are the removal of at-grade railroad crossings (Norfolk Southern Railroad at Gallerher Road, Route 29 northbound and southbound) and two traffic signals along Route 29. Following completion, Route 29 will be a 6-lane divided facility between I-66 and Virginia Oaks Drive and will operate without signals or obstructions within this same area.

Phase IV Plan Roll in PDF Format


Proposed Construction Phasing - Maintenance of Traffic

There are three main phases of construction - Phase 1 is broken into two parts that can be completed mostly at the same time.

Below is the preliminary breakdown of various construction phases with a rough estimated construction cost at this time:

Phase 1A - Detour Construction - $10 million - includes Route 29 & Linton Hall detour construction and temporary railroad signal crossings. Estimate construction time for this phase is 6 months.

Phase 1B - Interchange Construction - $50 million - includes Linton Hall Road bridges over 29 and NS Railroad NB 29 Bridge over NS Railroad ultimate grades of NB 29 and portions of interchange ramps, and access roads. Estimate construction time for this phase is 24 months.

Phase 2 - Interchange Construction - $30 million - includes SB 29 bridge over NS Railroad Ramp G bridge over Ramp K ultimate SB 29 grading and portions of braided ramps. Estimate construction time for this phase is 12 months.

Phase 3 - Interchange Construction - $5 million - includes final portions of Ramps I and J and minor detours to facilitate final construction. Estimated construction time for this phase is 6 months.

Estimated Total Construction Time: 4 Years

What's being done

Summary of other I-66 Projects

Phase I (UPC 63724) - University Boulevard - new alignment Construct a four-lane divided roadway with a bridge over I-66 from Wellington Road to Rte 29.
Status: Construction completed and opened to traffic on August 06.

Phase II (UPC 69113) - I-66 HOV widening from Rte 234 Business to the Rte 234 Bypass. Add one HOV and one SOV lane to EB and WB converting the existing four lane divided interstate to eight lanes divided.
Status: Construction completed and opened to traffic in November 2006.

Phase III (UPC 70043) - I-66 HOV widening from Rte Bypass to Rte 29. Add one HOV and one SOV lane to EB and WB converting the existing four lane divided interstate to eight lanes divided.
Status: Construction started on December 2006 with a completion date of August 2010.

Traffic Data

Based on traffic counts, Route 29 carried 46000 vehicles per day (ADT - average daily traffic) in 2005, and is anticipated to increase to 63,000 ADT by 2035. Linton Hall Road's count in 1998 was at 9000 ADT, and by 2005 that number had increased to 15,500 ADT. By 2035 it is anticipated to grow to 42,000 ADT on Linton Hall Road.

Thursday, January 3, 2008

Meet Your Refinance Savior

In a market when appraisal values make it hard to refinance, one option is still available.

FHA Streamline Refinance

Normally to refinance, you must qualify by providing all of your income, banking, credit, and liability information as well as an appraisal. With a FHA streamline refinance a property appraisal is not required. However, the new loan amount cannot exceed the original loan amount. The FHA streamline mortgage programs are great if you like little paperwork and no hassles.

FHA Streamline finances can also be used to shorten a 30 Year Loan to a 15 year as well as to take one out of an FHA adjustable rate mortgage. The main qualification standard is a timely mortgage payment history.

The basic requirements of an FHA streamline refinance are that your present mortgage must already be FHA insured, your mortgage should be current (you can now finance the payment due for the first of the month you close), the loan should result in a lowering of your principal and interest payments, and no cash may be taken out.

FHA Streamline refinances generally do not require an additional appraisal to complete, which alone saves the borrower hundreds of dollars in fees and potentially thousands of dollars in interest due to the faster close, and the fact that you don't have to finance the cost of an appraisal over 30 years.

FHA Streamline Refinance is a mortgage that can reduce one's rate. It can reduce the amount of documentation and the need for an appraisal and credit check to speed the processing of the loan.

Wednesday, January 2, 2008

Manassas - 2007 Market Trend Analysis

Residential Homes trended DOWN by 4.5% during 2007

Average Original List Price: $347,754
Average Sales Price: $316,726 (91.1% of Original Price)
Average Days on Market: 128
Average Homes Sold per Month: 95
Total Sold in 2007: 1135

Currently Active Listings:
Average List Price: $292,775
Average Days on Market: 132
Total Listed: 1537

As we enter the new year, it is important to know the path the market is currently on. Sellers need to lead the market not follow. Continually lagging behind the trend will lead to higher days on the market and lower "walkaway" sales prices.

Haymarket - 2007 Market Trend Analysis

Residential Homes trended DOWN by 9.1% during 2007

Average Original List Price: $590,499
Average Sales Price: $549,690 (93.1% of Original Price)
Average Days on Market: 133
Average Homes Sold per Month: 27
Total Sold in 2007: 320

Currently Active Listings:
Average List Price: $608,055
Average Days on Market: 254
Total Listed: 290

As we enter the new year, it is important to know the path the market is currently on. Sellers need to lead the market not follow. Continually lagging behind the trend will lead to higher days on the market and lower "walkaway" sales prices.

Gainesville - 2007 Market Trend Analysis

Residential Homes trended DOWN by 10.4% during 2007

Average Original List Price: $483,484
Average Sales Price: $449,521 (93.0% of Original Price)
Average Days on Market: 118
Average Homes Sold per Month: 42
Total Sold in 2007: 502

Currently Active Listings:
Average List Price: $476,627
Average Days on Market: 154
Total Listed: 389

As we enter the new year, it is important to know the path the market is currently on. Sellers need to lead the market not follow. Continually lagging behind the trend will lead to higher days on the market and lower "walkaway" sales prices.

Tuesday, January 1, 2008

FHA 203K Streamline - Rehab Loan

You can borrow up to 110% of the sales price from $5,000 up to $35,000 extra to rehab your home.

Need 1 bid for work to be completed from a licensed contractor.

We do one appraisal with 2 values - as is and subject to completion. Completed value must be supported.

Two draws - 1. at closing for materials - cannot exceed 50% of the estimated cost
2. Labor when done

6 months to complete the work

Borrower needs 3% of sales price - can use Nehemiah grant program.

Rate is about .25% higher when doing 203K

Work to be performed must not cause the mortgagor to be displaced from the property for more than 30 days during the time of the rehabilitation work is being conducted.

Cannot increase living space like finishing basement or putting on an addition.

The following repairs can be financed with this program::

  • Repair/Replacement of roofs, gutters and downspouts
  • Repair/Replacement/upgrade of existing HVAC systems
  • Repair/Replacement/upgrade of plumbing and electrical systems
    Repair/Replacement of existing flooring
  • Minor remodeling, such as kitchens, which does not involve structural repairs
  • Exterior and interior painting
  • Weatherization: including storm windows and doors, insulation weather stripping, etc.
  • Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwaves.
  • Improvements for accessibility for persons with disabilities.
  • Lead based paint stabilization or abatement of lead based paint hazards.
  • Repair, replacement or the addition of exterior decks, patios and porches.
  • Basement remodeling which does not involve sculptural repairs.
  • Basement waterproofing.
  • Window and door replacement and exterior siding replacement.
  • Well or septic system repair or replacement

Just some usefully information from your friendly neighborhood Realtor

2007 Top Ten List

According to the Potomac News & Manassas Journal Messenger the top 10 news stories of 2007 for Prince William County were:

  1. Illegal Immigration Debate
  2. Transportation Issues
  3. Three People Killed (Triple Homicide)
  4. The War
  5. County Continues to Grow
  6. The Crash of the Real Estate Market
  7. Virginia Tech Shootings
  8. Antibiotic-Resistant Staph Infections
  9. Political Arena Faces Shake-up
  10. Residents' Unusual Stories

Personnally, I think the market should be ranked higher. It's ecomonic impact will be felt in 2008. Good luck to all in 2008.