Blogging Real Estate in NoVa

Loudoun County! What’s Next? by Jim Stakem 9/15/2009

Loudoun County! What’s Next?

by Jim Stakem 9/15/2009

Without rehashing the point any further, this has been a very difficult couple of years for the Real Estate market. Our market in Loudoun County has experienced its fair share of problems. The million dollar question is what’s ahead for us. Loudoun County is composed of three distinctly different markets. The first and most active is the heavily developed Rt. 7 corridor from Leesburg east. We also have the partially developed Rt. 50 corridor east of Rt. 15 and finally the rural market west of Rt. 15.

This is what I expect to happen in the next twelve months. First we have to look at the factors that influence Loudoun County. We are very lucky to be so close to Wash. D.C! We can expect solid growth in the future as a result of government spending which is currently adding jobs to the local market as well as bringing more private sector jobs our way. We are already experiencing an increase in financial sector jobs arriving as a result of the increased regulation and need of financial institutions to be near the Washington regulators, the  Washington Post reported on this in Sept. 13^th  , and this is just the beginning. We are also very lucky to have Dulles International Airport and the subway connection to Washington in the near future. We are the most attractive and promising market, in the most stable city in the country. Although we have had so many problems, as has the rest of the country, we are very lucky to be in Loudoun!

In the two eastern areas we have a housing shortage! We have a market which at any other time in history would be experiencing explosive price increases. This is especially true in the Leesburg, Ashburn, Sterling/Potomac Falls and South Riding areas. We have multiple contracts on many of the most attractive properties and rapidly decreasing inventories. What we actually have is a market being artificially restrained by mortgage regulations which will not allow prices to increase. Until these prices are allowed to rise many people will simply refuse to sell and we will continue to have multiple purchasers who are frustrated in their attempts to buy. Builders are also having problems with prices, there is simply not enough profit in the residential market for them to risk building to meet the current demand. This market will be stable with lower sales volume and very frustrating for all!

The rural market will experience more substantial problems. It is always true that the further west you go the longer it will take to recover. If you add to that the changing demographics, younger families are more likely to be looking for smaller properties which require less maintenance and a lower mortgage. They also want more amenities in close proximity to their homes. This trend is expected to continue and will seriously erode the chances for recovery in rural markets. The next year will continue to be very difficult in these areas. There will probably be a greater chance for recovery in the urban centers such as Hamilton, Purcellville and Round Hill.

In summary next year will probably look much like this year with prices continuing to increase slowly in the east with reduced sales and we will probably see prices begin to stabilize in the west and sales continue to slide.

Jim Stakem is the Owner and Managing Broker of  Re/Max Select Properties  located in Sterling, Ashburn, and Leesburg.  

Servering all of Ashburn, Leesburg,Mclean and Loudoun County area Real Estate needs!

Loudoun County! What’s Next? by Jim Stakem 9/15/2009

Loudoun County! What’s Next?

by Jim Stakem 9/15/2009

Without rehashing the point any further, this has been a very difficult couple of years for the Real Estate market. Our market in Loudoun County has experienced its fair share of problems. The million dollar question is what’s ahead for us. Loudoun County is composed of three distinctly different markets. The first and most active is the heavily developed Rt. 7 corridor from Leesburg east. We also have the partially developed Rt. 50 corridor east of Rt. 15 and finally the rural market west of Rt. 15.

This is what I expect to happen in the next twelve months. First we have to look at the factors that influence Loudoun County. We are very lucky to be so close to Wash. D.C! We can expect solid growth in the future as a result of government spending which is currently adding jobs to the local market as well as bringing more private sector jobs our way. We are already experiencing an increase in financial sector jobs arriving as a result of the increased regulation and need of financial institutions to be near the Washington regulators, the  Washington Post reported on this in Sept. 13^th  , and this is just the beginning. We are also very lucky to have Dulles International Airport and the subway connection to Washington in the near future. We are the most attractive and promising market, in the most stable city in the country. Although we have had so many problems, as has the rest of the country, we are very lucky to be in Loudoun!

In the two eastern areas we have a housing shortage! We have a market which at any other time in history would be experiencing explosive price increases. This is especially true in the Leesburg, Ashburn, Sterling/Potomac Falls and South Riding areas. We have multiple contracts on many of the most attractive properties and rapidly decreasing inventories. What we actually have is a market being artificially restrained by mortgage regulations which will not allow prices to increase. Until these prices are allowed to rise many people will simply refuse to sell and we will continue to have multiple purchasers who are frustrated in their attempts to buy. Builders are also having problems with prices, there is simply not enough profit in the residential market for them to risk building to meet the current demand. This market will be stable with lower sales volume and very frustrating for all!

The rural market will experience more substantial problems. It is always true that the further west you go the longer it will take to recover. If you add to that the changing demographics, younger families are more likely to be looking for smaller properties which require less maintenance and a lower mortgage. They also want more amenities in close proximity to their homes. This trend is expected to continue and will seriously erode the chances for recovery in rural markets. The next year will continue to be very difficult in these areas. There will probably be a greater chance for recovery in the urban centers such as Hamilton, Purcellville and Round Hill.

In summary next year will probably look much like this year with prices continuing to increase slowly in the east with reduced sales and we will probably see prices begin to stabilize in the west and sales continue to slide.

Jim Stakem is the Owner and Managing Broker of  Re/Max Select Properties  located in Sterling, Ashburn, and Leesburg.  

Servering all of Ashburn, Leesburg,Mclean and Loudoun County area Real Estate needs!

New Appraisal Rules are now in effect!

Just when you thought Real Estate in Loudoun and Fairfax County could not get any freakier. Well, the new appraiser rules are now in effect! So, what does this mean for you! Well, if you are thinking of buying or selling a home in Loudoun, Fairfax, Alexandra or anywhere in-between you will be affected.

Here are the highlights of the new appraisal guidelines (also some tips and pit falls);

¢       The days of the lender directly calling the appraiser to look at a house are gone! Lenders now must use an outside firm who is not directly associated with the lender to complete the appraisal. The outside firm must rotate each appraiser. So what you say! Well, overnight a new industry has sprung up that caters to banks needing to comply with these regulations. These companies (more like clearing houses) bundle appraisals and bid them out to the highest bidder. This explains why some local Realtors are seeing appraisers as far away as Virginia Beach Va! Try explaining the difference between Brambleton and Ashburn or Evergreen Meadows and Woodlea Manor to someone who™s never set foot in Loudoun or Fairfax County! The larger lenders have 1,000™s of appraisers in their database that they are rotating.
¢       All appraisers must use at least two closed transactions within 90 days and two active listings in their appraisers report. Most professional local appraisers will use only traditional sales (no distressed properties) when appraising a normal sale however, we have seen out of area (sometimes out of state) appraisers uses the lowest three listings in any given area.
¢       Spot checks and field reviews, just because that first appraiser said you where okay doesn™t mean you are out of the woods yet. Lenders will now double check appraiser. This can be done by a œdesktop appraisal(basically looking up data on a computer vs. visiting the house) or by sending out another appraiser.
¢       There is an appeal process if you do not like the outcome. Each lender is a little different.
¢       Appraisers now have to report the condition of the overall market with the appraisal. The appraiser will determine if an area has an over supply or is in decline. The following areas are places that have an oversupply of homes for sale (this is according to our guest appraiser):
o       West of Leesburg
o       Purcellville
o       Great Falls
o       Manassas
o       Oakton
There are many sub-neighborhoods in these areas that are doing very well. The real rub has been when Realtors listing Short Sales and foreclosures much lower then market price (I™ve seen some agents list houses as much as 50% below market value) in order to get multiple offers and start bidding war. Appraisers have to use a couple of active listings to determine if the neighborhood is in decline or incline. This low-ball strategy is killing neighborhood prices!!!!
¢       Just about everything inside the Beltway is in good shape. Also, just about all homes under $400,000($250,00 for townhouses) seem to be selling well and do no fall into the oversupply category. Conversely, homes in the upper brackets ($700,000 and up) are having amazing challenges. As always Real Estate is local and you should consult a Real Estate professional for an individual evaluation of your home (please send all hate mail to George we don™t need no stinking regulations Bush).
¢       If you are using an FHA loan the appraisal will stick to the house for 6 months. No need to shop lenders if the first appraisal did not come in at price.
¢        Here are some helpful hints for all those who want to know how much credit you get for upgrades (these are all estimates please no hate mail;0):
o       Extra full bath                               $2,500-$5,000
o       Decks                                           $5,000
o       Walkup or Walkout basements                   $5,000-$10,000
o       Price adjustments for sq footage (bump outs etc)       $40-$75 per sq foot
o       Finished Basement                               $10,000-$20,000
o       Maximum price adjustments cannot exceed 25% of sales price!
So, you want to sell your house in Ashburn, Brambleton and or Leesburg and all this info just gave you major stomach pains. Well, I™m here to help.

¢       First things first, HIRE A FULL TIME PROFESSIONAL REALTOR WHO UNDERSTANDS YOUR AREA. This just huge. I see agents who are not familiar with the area list so many houses and I™m just left scratching my head (banks do this too!)! It is just as bad when you use a buyer™s agent that doesn™t know the area they are selling. I see so many crazy offers on houses that I know the buyer™s agent has no idea the true value of the home! If you are thinking of buying or selling in Ashburn, Brambleton, Leesburg, Lansdowne and Purcellville make sure your agent can tell you what it was like when route 7 was two lanes and the only thing that slowed you down were deer, cows and cops!
¢       Consider getting an appraisal done in advance. These can be done as cheaply as $200. Most competent agents can do a CMA (not an Appraisal) for free. This should give you a good idea of what houses are selling for.
¢       Always give yourself at least 30-45 days to close. The appraisal can take up to two weeks to get done!
¢       Think about using a local bank. It is much easier to challenge an appraisal when the bank manager is in your neighborhood vs. one on the other side of the world! I like Middleburg Bank and Sandy spring. They both do very good work! Email me and I™ll send you the contact info for the Loan officers I like to use.

Take care!
Chuck

THE FED MAKES A MOVE ON FREDDIE!

What does the latest government take over mean to the already fragile housing market? Well, truth be told only time will really tell however, early signs are good (unless you own Freddie stock. Sorry).

So what did exactly happen over the weekend? The long and short of it is that the government beheaded the leadership teams at both firms (about time). They have installed long time financial gurus from both the private and public sector to turn the intuitions around. This is so far being hailed very positively on Wall Street which has been calling on the government to step in for the better part of  a year. My main MAN Cramer was ranting about this first on his show over a year ago. Unfortunately, there were pundits who wanted the markets to fix themselves and did not want the government to step in. These same folks (and there are a lot of them) think this is a step into socialism and don’t want tax dollars used.

What does this mean for you now? Well, if you are buying a home right now there is a good chance that interest rates will be coming down. I™ve heard  rates could fall by as much as a ½%over then next few months. This is great news for those who are buying and those who need to refinance. This is also good news for banks that need the US government™s money to keep making loans. Now that the government is in charge there is little concern of Freddie Mac running out of money. Most bank stocks are seeing a nice jump in prices today because of this move by the FED.

So what™s the downside??? Well, the biggest downside that I can see is that the FED is now on the hook for over 1 trillion dollars worth of paper(loans). This isn™t to say that the government is losing this money, this only the amount of loans outstanding. Two things to remember: 1.The FED might actually make money on the deal if the market™s stabilizes 2. FHA loans have some of the lowest default rates of ANY loan product. As everyone knows who has tried to get one of these loans in the past. These loans are all fully documented (and always have been) and require much stricter underwriting standards then those sub-prime loans that banks got in trouble with during the boom years!

So what do I think??? I think: 1. the market is at bottom (especially here in the Metro area) 2. Rates are going to be very good for buying 3. The FED will wait until the new administration takes over to make major changes on how FHA loans are written.

Until then as my favorite uncle used to say œJUMP IN THE WATER IS GREAT!

Chuck Rifae

Well, it looks President Bush (aka lame duck Bush)  grudgingly sign off on the latest attempt by Congress to stop the housing melt down. Overall, from what I’ve read and  understood about the Bill’s programs  it sounds like it will  be a win-win for everyone. Banks will dump  risky borrowers  with only a 10% hit to their bottom line and borrowers will be able to get a 30 year loan without  the rate adjustments.  The  trick will  be how these programs are going to be used and which banks will participate.  I believe this will be good news for everyone! Buyers can get extra cash for buying foreclosures and  sells have another avenue to save their homes. Best of all this should at least slow down the foreclosures that are hurting everyone!

Attached is a quick link to the Bill( enjoy): http://www.realtor.org/gapublic.nsf/pages/hr_3221_key_provisions?OpenDocument

Take care,

Chuck Rifae

Has the market turned Part 2

July 16th, 2008 10:25 AM

Has the market turned??? We are seeing good signs of the local market turning around( http://www.dullesarea.com/RealInfoMLS2008.html  ). All the leading indicators seem to be pointing to a rebound.

I’ve got my fingers crossed!

Welcome to Chuck Rifae’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Leesburg.