Archive for February 2008
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Deciding To Refinance |
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Mortgage interest rates have continued to decrease over the past year (much to my surprise). Once again, some homeowners are wondering whether it might make sense for them to refinance. While there are many factors to consider when making such a decision, here's one way perspective that might help you decide whether to proceed . . . The theory: With the assumption that you are not trying to pull out equity via a refinance, you need to determine how long it will take for the monthly cost savings (with a lower interest rate) to exceed the cost of refinancing. How it works out: You bought a $300,000 house three years ago for $300,000 with a $50,000 downpayment. Thus, the original loan was for $250,000 --- but the balance is now down to $240,000. The interest rate on the loan is 6.25%, which made the principal and interest payment $1,539 per month. Today's rate of 5.625% looks good to you, but the closing costs will be $3,500 -- which you would have to finance because of your current cash flow situation. The new loan would be $243,500 (old balance + closing costs), financed at 5.625% over 30 years, which makes the new principal and interest payment $1,402 per month. When it makes sense: In the scenario above, many people would immediately jump at the opportunity to save $137 per month ($1,539 - $1,402). However, bear in mind that it will take 26 months for the monthly savings to pay off. That is to say that since you paid $3,500 of closing costs in order to refinance, it won't be until the 26th month ($3,500 / $137) that you actually see a net gain for your decision. Thus, in this scenario, if you know you were going to stay at least two years, it would make sense to refinance --- but not if you thought it was likely that you would sell sooner. Your scenario: There may be more variables in your situation than I mentioned above. Perhaps there is a second mortgage with a variable rate, for example. I'd be happy to help you with calculating when it would make sense to refinance, or you can contact a lender to get a similar analysis. Just remember --- even if you are lowering your rate, it doesn't always make sense to refinance! | |
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Foreclosure: 7110 Rocky Bar Road, Elkton |
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Property To Be Sold: 7110 Rocky Bar Road, Elkton Date/Time of Sale: Friday, February 22, 2008 at 9:00 a.m. Original Principal Amount of Deed of Trust: $92,800 Assessed Value: $155,700 Deposit: $5,000 or 10% of sale price, whichever is lower For Information Contact: Stephen B. Wood Friedman & MacFadyen, P.A. 1601 Rolling Hills Drive, Ste. 125 Richmond, VA 23229 804-288-0088 Ref# 213234 Per the Daily News Record, February 6, 2008 | |
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Foreclosure: 7415 Lilly Square, Dayton |
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Property To Be Sold: 7415 Lilly Square, Dayton Date/Time of Sale: Wednesday, February 27, 2008 at 9:40 a.m. Original Principal Amount of Deed of Trust: $35,000 & $61,000 Assessed Value: $155,700 Deposit: $10% of sale price. For Information Contact: Hill & Rainey Attorneys 2425 Boulevard, Suite 9 Colonial Heights, Virginia 23834 (804) 526-8300, Ext. 124 Per the Daily News Record, February 6, 2008 | |
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Foreclosure: 3291 Barrington Drive, Harrisonburg |
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 Property To Be Sold: 3291 Barrington Drive, HarrisonburgDate/Time of Sale: Thursday, February 21, 2008 at 11:30 a.m. Original Principal Amount of Deed of Trust: $262,000 Assessed Value: $369,000 Currently For Sale: $379,900 (more details here) Deposit: $26,000 or 10% of the sale price For Information Contact: Glasser & Glasser, P.L.C. Crown Center Building, Suite 600 580 East main Street Norfolk, VA 23510 Fiel No. 61932 757-321-6465 (call between 10a and 12p) Per the Daily News Record, February 8, 2008 | |
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Foreclosure: 202 Kensington Drive, Elkton |
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Property To Be Sold: 202 Kensington Drive, Elkton Date/Time of Sale: Tuesday, February 19, 2008 at 9:00 a.m. Original Principal Amount of Deed of Trust: $292,500 Deposit: $12,000 or 10% of the sale price For Information Contact: Draper & Goldberg, PLLC 803 Sycolin Road Leesburg, VA 20175 703-777-2448 http://www.drapgold.com Per the Daily News Record, February 8, 2008 | |
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Five Years Of January Consistency --- Out The Window |
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For the past five years, January real estate sales have been rather predictable and consistent in Harrisonburg and Rockingham County. Between 2003 and 2007 we have seen January home sales counts of 75, 64, 78, 79, and 76. But January 2008 marked an end to that consistency --- with a surprisingly low 48 home sales.  The Details: The graph above shows the number of sales per month as reported by the Harrisonburg/Rockingham MLS in all of Harrisonburg and Rockingham County | |
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No surprise here . . . Supply Is High! |
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I've changed things up a bit this month --- I'm starting to break down sales into four price ranges (as seen below) instead of three price ranges. Several people mentioned that the $200k-$350k was rather large and encompassed too many types of housing.  As can be seen here --- the only price range that could be described as having a close-to-normal balance between supply and demand is of properties valued under $200,000. All others are significantly oversupplied, with January 2008 sales that aren't too encouraging! | |
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Foreclosure: 2388 Hopkins Drive, McGaheysville |
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Property To Be Sold: 2388 Hopkins Drive, McGaheysville Date/Time of Sale: Wednesday, February 27, 2008 at 9:45 a.m. Original Principal Amount of Deed of Trust: $450,000 Assessed Value: $338,300 Terms of Sale: A deposit of $20,000.00, or 10% of the sales price, whichever is lower, cash or certified check, will be required at the time of sale with settlement within fifteen (15) days from the date of sale. For Information Contact: Samuel I. White, P.C. 5040 Corporate Woods Drive, Suite 120 Virginia Beach, VA 23462 757-457-1460 Call between 9:00 a.m. and 11:30 a.m. 0512-08/CONV Per the Daily News Record, February 4, 2008 | |
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Correction - - - High End Homes Actually ARE Selling! |
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 Last week an article ran in the Daily News Record stating that only eight "high-end" homes are selling per year. Unfortunately, I think many people read that portion of the article and thought "yeah, I knew people really aren't buying those expensive homes..."The Good News: The eight / year statistic is not at all correct! The Bad News: This still doesn't mean that high-end homes are selling quickly. I'm not sure how the eight per year figure was derived, but when searching in the Harrisonburg/Rockingham Multiple Listing Service for homes sold in Harrisonburg or Rockingham County during 2007 with sales prices of $500,000 or higher, I'm finding 27 properties! This changes the context of the story quite a bit. If 8 homes sold per year, the current inventory of 72 homes (66 at the time of the DNR story) would take 9 years to sell. With the actual figure of 27 homes selling per year, it would take 2.67 years to sell the active inventory. And thus the bad news becomes clear --- even with the corrected data on the rate at which these homes are selling, there is still an oversupply of homes on the market in this price range. I rarely meet a homeowner who hopes that it will take 2+ years to sell their home. One further correction . . . time to sell has not increased . . . The article implies that these high end homes often sit on the market for nine months, where as in a more normal market they would only take six months to sell. In actuality, the 27 homes that sold in 2007 took (on average) 6.6 months to sell. And in contrast (or lack thereof), in 2005 (a very active market), these high-end homes took (on average) 5.8 months to sell. One last clarification --- I am in no way indicating that it is easy or fast to sell a high-end home priced above $500,000 in the current market. However, if you need to sell such a home, it is important to know the facts to help you make the best home selling decisions. The property pictured above is that of Jack Miller, who was featured in the Daily News Record article. He says he is ready to sell --- any takers? | |
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The Most Popular Properties --- At Least Online . . . |
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 If you're reading my blog in a browser, as opposed to in a rss reader, you'll always see a property in the upper right corner of my blog. It is labeled as a "Top Property" with a number beside it --- and several of my blog readers have asked what this is all about. Now you'll know . . .Coldwell Banker Funkhouser Realtors operates over 60 web sites with property listings --- this includes our company web site, and a web site for each agent in our company. Each day, consumers perform thousands of property searches on all of these sites combined. We keep track of which properties are being viewed, and each night we sort through all of the properties on the market to find the 100 properties that consumers have viewed most frequently in the most recent 30 days. Curious to see how these properties rank? Visit my blog, and click on the  button next to the "Top Property" section. You'll be able to see a list of the top 100 most viewed properties. Enjoy! | |
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Foreclosure: 9212 Rawley Pike, Hinton |
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Property To Be Sold: 9212 Rawley Pike, Hinton Date/Time of Sale: Friday, February 22, 2008 at 9:00 a.m. Original Principal Amount of Deed of Trust: $179,100 Assessed Value: $180,700 Terms of Sale: A deposit in the form of certified funds in the amount of $15,000.00 or 10% of the successful bid, whichever is lower, is required of any bidder at the time of sale. Closing within fifteen (15) days of sale. For Information Contact: Stephen B. Wood Friedman & MacFadyen, P.A. 1601 Rolling Hills Drive, Ste. 125 Richmond, VA 23229 (804) 288-0088 Ref #213213 Per the Daily News Record, January 30, 2008 | |
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Foreclosure: 388 Ridge Court, Timberville |
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 Property To Be Sold: 388 Ridge Court, TimbervilleDate/Time of Sale: Monday, February 11, 2008 at 10:00 a.m. Original Principal Amount of Deed of Trust: $125,600 Assessed Value: $121,100 Most Recent Sale: $157,000 (1/6/2006) This property is currently on the market for $169,000. Terms of Sale: A bidder's deposit of $12,500.00 or 10% of the sale price, whichever is lower, will be required in cash, certified or cashier's check. Settlement within fifteen (15) days of sale, otherwise Trustees may forfeit deposit. For Information Contact: Professional Foreclosure Corporation of Virginia C/O Shapiro & Burson, LLP 13135 Lee Jackson Highway, Suite 201 Fairfax, VA 22033 703-449-5800 Per the Daily News Record, January 30, 2008 | |
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Buy vs. Rent --- Harrisonburg Townhouse on Vine Street |
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 There are many perspectives on whether it is better to buy or rent --- let's pick one property type, in one imaginary buy vs. rent scenario, and start with a monthly cash flow perspective . . .The townhome pictured to the right, located at 904 Vine Street in Harrisonburg, is listed for sale with a price of $149,000. Since homes sell on average at 97% of their asking price, we'll assume that it may sell for around $144,530. We'll also assume that one might be able to rent it for around $825 per month.  If we just consider monthly cash flow, we will discover that it takes a $17,000 down payment (plus closing costs) to keep the monthly mortgage payment in line with the projected $825 per month rental payment. Many buyers of townhomes in this price range do not have $17,000 to put into the transaction --- some only have the closing costs ($3,000 - $4,500). Let's take that angle --- which increases the monthly mortgage cost to $922 per month, or $97 extra each month. So why might someone consider purchasing this townhome rather than renting it? Let's assume, for a moment, that the conflicted buyer-tenant will stay in the townhome for three years. Here's the comparison: 1. The buyer pays $3,492 extra in monthly housing costs ($97 * 36 months) 2. The buyer pays down their mortgage $6,176 during the three years. 3. The buyer pays $23,366 of interest, which saves them approximately $5,841 on taxes (assuming 25% bracket). So far, the buyer is ahead of the tenant by $8,525 by the third year. If we then include a modest 3% per year appreciation, the buyer has gained an additional $13,402. (They don't get this until they sell). Thus, by buying, rather than renting, the net gain comes out to be: - $4,000 purchase closing costs - $3,492 extra monthly housing costs + $6,176 principal reduction + $5,841 tax savings + $13,402 appreciation --------------------------------------------------- + $17,927 net gain after three years One important note --- if the buyer then decides to sell after three years, some portion of their gain will be expended in seller closing costs. | |
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Builders Association To Hold Smart Growth Symposium |
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The Shenandoah Valley Builders Association will hold a Smart Growth Symposium on Friday, February 22, with registration at 9:30 AM and finishing around 3:30 PM. This event will be an opportunity for members of the community to come together to learn about issues related to growth from a variety of perspectives, and to participate in a public conversation on the future of the Shenandoah Valley. The schedule of speakers and topics is as follows: 10:00 AM - Stewart Schwartz, Coalition for Smarter Growth Addressing the topic, "The Smart Growth Option" 11:45 AM - Lunch served 12:30 PM - Question & Answer session for panel of guests:
Addressing the topic "What is a Comprehensive Plan?" This should be an informative day with a variety of opinions and perspectives. The cost is $10 per person and includes lunch, and the deadline to RSVP is by Wednesday, February 20. Reservations and payment can be made online. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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