Let's Talk Real Estate!

The Latest from Laura - Is a Housing Recovery on the Way?

How nice it would be to say Yes. Instead, the answer is that it all depends. Market success and failures are zip code specific. The media reports national news, so be careful not to paint your house (or your zip code) with the same brush the media is using.

Our market in the general Washington DC area has strengths and weaknesses. The strong markets remain the usual suspects: Washington DC, Arlington County and the City of Alexandria. Fairfax County is too large to generalize; the closer in, the better the market. Given the climbing costs of transportation, those areas will continue to perform well, and will likely enjoy an early boost of price appreciation.

Inventory is key to turning the housing market around. High levels of inventory favor a buyer's market and lead to aggressive price negotiation. Building permits continue to fall and eventually housing inventory, both re-sale and new construction, will shrink. When that happens, we will start to see the recovery of the housing market. Earlier this year, some economists belived that the second half of this year would show real improvement. That optimism has been revised to late this year.

In my immediate experience, there is strong buyer interest in our real estate market. Most buyers are slow to act, and feel anxious that the market may continue to decline. If you plan to stay in your home for at least 4-6 years, then I believe you should consider buying a home. Longer than 6 years is a no-brainer; our market will improve and we will see price appreciation.There is no doubt in my mind.

I believe we are at the bottom of our market in the DC region, as we have already seen the closer-in communities improving. If you would like to discuss your particular situation, or review a value analysis of your home/community, please give me a call. I'd be more than happy to bring you up to date.   

From Coral: Banks...Can They Help Themselves?

Back in December, I had a buyer who was interested in buying a short sale property--that is when the owner owes more than the home is now worth, can't make their payments, and is trying to get the bank to accept the sale at a loss.

The townhouse was listed for $399,999 and my purchaser offered $370K with $11K in closing assistance. We were almost instantly verbally countered by the bank, Wells Fargo, for $377K with $11K back in closing and we verbally agreed. Six very long weeks ensued of being promised we would get something in writing from the bank. Literally every day we were told a new story on why we were not getting the counter in writing, but were assured by our WF contact and the listing agent that this deal was "99% sure to go through."

My buyer and I kept an eye on the market, and eventually started looking for another house to buy. Finally around the end of the sixth week, they rejected our offer, citing some comparable sale that was over $400K. No counter offer, no bottom line, just a rejection.

My buyer has since bought another home, directly from a seller, and has been happily settled for about two months now.

I've kept track of this little townhouse ever since, and see now that it is listed as a foreclosure, with a contingent contract. Listed price: $339,150. Seven months have passed since my buyer originally wrote his offer in December. We were originally going to settle on January 21. That's five months of higher mortgage payments that the bank could have been receiving, rather than 5 months of losses, ending in a price that is sure to be around anywhere from $30K-$50K lower than what my buyer would have paid.

I am not sure what the moral of this story is, other than the banks got themselves into this mess and are having a really hard time getting themselves out. Anyone have a positive short sale experience? Please share!