Buying
| Newer Posts | Older Posts |
 |
 |
||||||||||||||||||||||||||||||||||||
Foreclosure: 1121 Rebecca Ridge Court, Harrisonburg |
|||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||
 |
 |
||||||||||||||||||||||||||||||||||||
|
|
February 2008 - Sales are Down, Prices Are Up!?! |
|
February 2008 home sales are the lowest on record within the past 5 years (beginning January 2003), according to data from the Harrisonburg-Rockingham Multiple Listing Service. Only 44 properties were transferred in February, down from 50 in January 2008, and down from 63 last February (2007).  The Good News If we compare this February (2008) to last February (2007) we see two conflicting market conditions:
Advice to sellers --- be patient, as it may take longer than you expect, or would like, for your home to sell. | |
|
|
|
|
Housing Supply in Harrisonburg and Rockingham County |
|
Here is a fresh look at inventory levels for Harrisonburg and Rockingham County --- looking at all single family homes and townhomes. This is a similar analysis as I have provided in past months, with one notable exception . . . see below the graphic . . .  In previous months, I had calculated the rate at which homes were selling using only the previous three months of sales figures. My logic was that if I looked back beyond those three months, it would take too long for short term trends to appear in my calculations. Today, however, a local builder suggested that short term trends (if they really are short term), could skew these numbers --- and perhaps it would be more helpful to determine the sales per month looking at a larger history than the past three months. Since I update these figures each month, I decided to make the suggested change --- thus, the data above compares available listings in March 2008 with the average sales per month for March 2007 through February 2008. The full data table is below . . .  | |
|
|
|
|
Daily News Record >> Getting Local With Real Estate |
|
 I applaud Dan Wright (pictured to the right), and the Daily News Record (DNR) for running some local stories on our real estate market, such as today's "Feeling The Ripples" article on foreclosures.In contrast to today's story about our local market, the DNR will often run AP stories --- which are written from a national perspective, and about markets that are usually quite different than the Shenandoah Valley. As a quick aside --- if it's not immediately apparent whether the article is local, check the "dateline" --- the city that precedes the article. And yet, despite my excitement for seeing a local article today, I can't keep from commenting on a few interesting parts of this story . . .
| |
|
|
|
|
NPR Is Right On --- The Potential Real Estate Standoff |
|
 Perhaps Jonathan Clements, a personal finance columnist at The Wall Street Journal, has been reading my blog? Unlikely, however he speaks of a possible real estate standoff in a recent NPR interview, making many of the same observations as I made a few weeks ago.In the interview, Jonathan ponders . . . "are we going to see prices drop, which will encourage buyers to step up to the plate and purchase, or are we going to continue with the standoff, where sellers are reluctant to cut prices and buyers are reluctant to commit?" He then makes some other great observations about selling in today's market:
| |
|
|
|
|
Deed Details - - - Don't Wait Until Closing! |
|
 In a typical purchasing scenario, a buyer may not see the deed that will be recorded at the courthouse to transfer ownership to them for the property that they are purchasing . . . until after the closing, after the deed has been recorded. This could have serious implications!First, to give the benefit of the doubt to local attorneys and title companies, many will briefly show the buyer the deed before having the seller sign the document --- though typically this is only to make sure that the buyers' names are spelled correctly. Again, this could have serious implications! Here are a few recent conversations I have been a part of, or heard about:
Where do we go from here? I am not a title examiner --- thus, though I will begin to pull recorded deeds for my buyer clients, I will not necessarily always be able to pinpoint all of the associated documents. A great solution, however, is to use a title company or closing attorney who will initiate the title search process as soon as the property is under contract. If deed restrictions (of any kind) exist, at least they will be discovered early on, as opposed to after the closing has taken place. | |
|
|
|
|
Who Is This Scott Rogers Person?? |
|
Do I know you? It has been great to have e-mails and comments on my blog from people that I know --- and also from people that I don't know at all. My intent for my real estate blog is to provide a place for real estate related issues and trends to be discussed in our community. So . . . even if I don't know you, feel free to e-mail me a question, or add a question or thought in the comments section of this, or any other post. Do you know me? Some of you do --- others have never met me. Hopefully, this blog allows you to feel like you are getting to know me better --- and to know what I think and feel about our local real estate market, parts of the real estate transaction, etc. To take it one step further, I added two videos to my web site today (introducing the site, as well as the searching section of my site). You'll find these videos embedded below, as well, and I welcome your feedback. They are, perhaps, a bit on the "serious and professional" side --- so in future videos, I'll try to let a little more of my personality shine through. Despite their imperfections, I hope these videos allow you to get to know me a little better. And, as the name of my blog implies, if you'd like to get together for "Coffee with Scott" some day, just drop me an e-mail, or call me at 540-578-0102. All About My Web Site . . . Searcing On My Web Site . . . | |
|
|
|
|
Foreclosure: 292 E. Riverside Drive, Timberville |
|
 | |
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Foreclosure: 97 Blue Stone Hills Drive, Harrisonburg |
|||||||||||||||||||||||||||||||||||||||||||
Per the Daily News Record, February 27, 2008 | |||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
Foreclosure: 12173 Port Republic Road, Grottoes |
|||||||||||||||||||||||||||||||||||||
Per the Daily News Record, February 27, 2008 | |||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
|
Foreclosure: 1182 Portland Drive, Harrisonburg |
|
 Property To Be Sold: 1182 Portland Drive, HarrisonburgDate/Time of Sale: Friday, March 5, 2008 at 3:15 p.m. Original Principal Amount of Deed of Trust: $177,882 Assessed Value: $193,000 Deposit: $15,000 or 10% of the sales price, whichever is lower For Information Contact: Samuel I. White, P.C. 5040 Corporate Woods Drive, Suite 120 Virginia Beach, VA 23462 757-457-1460 (call between 9:00am and 11:30am) ASAP# 993440 Per the Daily News Record, February 21, 2008 | |
|
|
|
|
Harrisonburg Water & Sewer Connection Fees Increase |
|
 Most homeowners, or those who hope to be homeowners in the future may not have paid too much attention to the news earlier this month that Harrisonburg water and sewer connection fees will be increasing. But maybe we all should have taken note . . .The Change Example #1: three-quarter-inch water meter --- in this example, the sum of the water and sewer connection fees will soon be $7,000, instead of the existing $2,000. This size would be typical for a single family residence. Example #2: a six-inch water meter --- in this example, the sum of the water and sewer connection fees will soon be $300,000, instead of the existing $17,500. This size would be typical for a large commercial project. Peruse the current fee schedule here, and the new schedule here (effective July 1, 2008). The Effect As Todd Rhea, of Clark & Bradshaw, commented at last week's Smart Growth Symposium, when builders or developers are faced with new fees, we're fooling ourselves if we think they absorb those costs. They ultimately get passed on to the buyer. With this logic, one could argue that city housing costs will increase universally by $5,000 come July. Action Item Builders and developers should note that the fees are charged at the time of obtaining the building permit --- so as long as a lot has a building permit prior to July 1, 2008, you can take advantage of the lower fee schedule. For a developer of a major residential or commercial project, this could equate to hundreds of thousands of dollars of savings. | |
|
|
|
|
The Shenandoah Valley's 2007 Real Estate Market |
|
I recently posted 2007 sales trends for Harrisonburg and Rockingham County. Here's the rest of the story . . .  OK --- that was just for visual effect --- admittedly, none of us can read the graphs above, but hopefully you can see that this market report is chock-full of usable data. The report covers the following areas:
| |
|
|
|
|
Who Pays The Closing Costs? |
|
 Some buyers make offers including a condition that the seller pay all or some of the closing costs.Some sellers offer the incentive of seller-paid closing costs to try to entice buyers. What's really going on here? There are a few ways to look at it:
| |
|
|
|
|
PMI -- Is It Good, or Evil?? |
|
I am frequently asked whether PMI (private mortgage insurance) is a good thing, or something to avoid. To start with --- private mortgage insurance is an insurance policy that protects the lender in the event that a borrower stops making payments, the lender has to foreclose, and they can't recoup all of their costs. Despite the fact that the lender is the beneficiary of the insurance policy . . . you guessed it, the borrower gets to pay for the policy! PMI is required (by most lenders) for any mortgage where the loan-to-value ratio is greater than 80%. In other words --- if you have less than a 20% down payment, you will likely have to pay PMI. PMI is typically paid on a monthly basis --- with every mortgage payment. However, with most lenders, you can avoid paying PMI by paying a slightly higher interest rate. Don't be fooled --- the intent and result are essentially the same. When a borrower has to finance more than 80% of the purchase price, a lender is a bit more worried about their future ability and likelihood to repay than if they are financing 80% or less. The lender mitigates this risk by taking out an insurance policy, and having the borrower pay for it. The policy can either be paid for (by the borrower) each month, or up front. Thus the option of either paying every month, or over the life of the loan (in the form of a slightly higher interest rate). I suggest that most of my clients pay the PMI each month. Typically, the monthly payments are about the same regardless of whether you pay PMI each month (with a lower rate), or do not pay PMI (and have a higher rate). So . . .
One final note --- if you have monthly PMI costs, at some point you will want to have that part of your payment removed. Before you hire an appraiser to appraise the property and prove that your loan balance is less than 80% of the appraised value, check with your bank on their process. Many banks have a list of appraisers that are acceptable for this process, and some banks insist that they generate the appraisal request. | |
|
|
|
|
Beyond The Numbers --- What's Happening In Our Market? |
|
If you hadn't figured it out yet --- I love data analysis. In the world of real estate, there is a lot of data that can help buyers and sellers make intentional, intelligent decisions. Ask me a question, and I'll work to find the data that can give you a thorough and factual answer. But, there is more to the story than the numbers... Many Sellers Are Standing Firm The past year (2007) showed lower real estate activity than the several years prior, and one significant factor in that reality is sellers who stood their ground on price. It is reasonable to think that we may have seen more real estate activity if sellers had accommodated in their asking or selling prices. Average sales prices increased between 2006 and 2007 in almost all segments of our market. If sellers (collectively) had been willing to sell for a small percentage less, I suspect that sales activity would have increased accordingly. Many Buyers Are Bashful In working with buyers, and talking to possible buyers, I have come to realize that buyers in our market are (collectively) hesitant to make the "crazy offer." While there are some buyers who do indeed make those offers, many buyers do not make an offer significantly lower than asking price if they think the price is too high. This, coupled with resolute sellers, has led to a stalemate of sorts. Buyers hesitate to make the offer, and sellers hesitate to lower the price. Excitement Turned Into Trepidation Real estate values escalated rapidly between 2002 and 2006. Buyers and sellers in our market became very excited about the extraordinary gains being imagined and realized by owning real estate. It seemed like people couldn't buy enough real estate fast enough. Nobody wondered or questioned whether values would increase -- they stayed awake at night marveling at the 10%, 20%, 30% that they had or would gain by owning real estate. These days, buyers and sellers stay awake at night for a different real estate related reason. Sellers wonder if their house will ever sell. Buyers wonder if they should really be buying. We don't feel the same excitement level for buying and selling real estate. The Effect of National News We hear terrible things about plummeting home prices in other communities across the county --- or about foreclosures --- or bankruptcies. National news outlets are excitedly covering the worst of the worst situations --- which many people locally assume are happening in our local market as well. Where Do We Go From Here? It is essential that buyers and sellers have a firm understanding of their segment of our local market. Don't be distracted by other areas of the country, or other price ranges locally. It is important to make decisions based on market realities, and out of the context of your personal situation. Owning real estate is a good investment, but buying and selling decisions must be made thoughtfully. | |
|
|
|
|
Foreclosure: 111 Middlebrook Street, Harrisonburg |
|
 Property To Be Sold: 111 Middlebrook Street, HarrisonburgDate/Time of Sale: Friday, February 29, 2008 at 9:30 a.m. Original Principal Amount of Deed of Trust: $260,775 Assessed Value: $260,400 Last Sale: $274,500 (April 3, 2006) Deposit: $26,000 or 10% of sales price, whichever is lower For Information Contact: Glasser and Glasser, P.L.C. Crown Center Building, Suite 600 580 East Main Street Norfolk, VA 23510 File No. 61895 757-321-6465 Per the Daily News Record, February 18, 2008 | |
|
|
|
|
Preston Lake -- Diving Into The Details |
|
 I have had several clients inquire about Preston Lake, a mixed-use development underway just east of Harrisonburg. I have sent a variety of information and links to online resources to these clients, but thought I'd group all of that information together in one place. General Information News Articles / Opinion Pieces
A few more notes and disclaimers:
| |
|
|
|
|
Buying A "For Sale By Owner" Property . . . with a Realtor |
|
 Some times, when I am working with a buyer, they or I will become aware of a "for sale by owner" property of interest to them. They almost always have the same question --- how would it work if we wanted to pursue that property? Here's how I see it . . .In Virginia (and in most places) when a homeowner decides to sell, and work with a Realtor in doing so, they typically negotiate a percentage of the purchase price that will be paid as a "brokerage fee" at closing. This brokerage fee (call it 20% of the sales price, for the sake of absurdity, and because there is not a standard brokerage fee) is almost always split between the Realtor (and his/her company) representing the seller, and the Realtor (and his/her company) representing the buyer. So, in my absurd example, 10% to the seller's Realtor and realty company, and 10% to the buyer's Realtor and realty company. An interesting byproduct of this typical business practice is that a buyer isn't counting on "paying their Realtor." As a buyer works with their Realtor to identify, view, evaluate, negotiate and close on a property --- they aren't necessarily thinking "and in addition to buying the house, I'll be paying my Realtor 10% of the sales price." Here, some people would interject to point out that the buyer pays both Realtors, as they are the ones bringing the money to the transaction --- the seller just brings the house. And thus, the questions begin when a buyer client becomes interested in a "for sale by owner" property. As a buyer looks at the sales prices of homes listed by Realtors (for example, $200k), they don't think about having to pay a brokerage fee on top of the price --- since the seller will pay it out of the sales price. But many "for sale by owner" sellers don't plan on paying a brokerage fee to any Realtors, and thus the sales price they would negotiate doesn't accommodate for the buyer's Realtor being paid. So . . . if I have been assisting someone in looking for a home, and they decide they want to buy a "for sale by owner" property, here are the options I make available:
| |
|
|
| Newer Posts | Older Posts |
Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
Home Search
Housing Market Report
Harrisonburg Townhouses
Walk Through This Home
Investment Properties
Harrisonburg Foreclosures
Property Transfers
New Listings
