Foreclosure, REO Home Prices Rise

Average sale prices for homes in foreclosure and those owned by banks rose 1.6 percent in the second quarter compared to the first quarter and 6.1 percent year over year, according to RealtyTrac, a foreclosure marketing service.

The average price of these homes in the second quarter was $174,198 nationwide, but was significantly higher in California where the average price, according to RealtyTrac, was $256,833. These prices reflected homes sold by lenders or by homeowners who had received at least one notice of default.

About 24 percent of all properties sold in the second quarter were REOs and foreclosures. Their prices were on average 26 percent lower than those of homes not in foreclosure, RealtyTrac reported.

RealtyTrac Senior Vice President Rick Sharga projected that it would be the end of 2013 before the housing marked works its way through the foreclosure inventory.

Source: Los Angeles Times, Alejandro Lazo and Daily Finance, Hugh Collins (09/30/2010)

  • Julie Nesbitt

    Julie Nesbitt knows the back trails and by-ways of Northern Virginia real estate.

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  • Enjoying Winkler Botanical Preserve

    We had a great time walking the trails. 

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  • Don’t take chances with real estate.

  • REDUCED: 7202 Churchill Rd, McLean

    Open House, Sunday, 1-4 BIG PRICE DROP! 7202 CHURCHILL ROAD McLean, VA 22101 6 Bedrooms 5.5 Bathrooms 6,752 SF $1,695,000

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  • [FWD: The Empire Strikes Back Pictures]

    We played a game at the office this Sunday. Lots of fun. Sincerely, Will Nesbitt Principal Broker   Nesbitt RealtyAlexandria VA licensed in the Commonwealth of Virginia and the State of Maryland 703 765 0300 (main) 571 237 7902 (direct)888 783 6391 (fax) ——– Original Message ——– Subject: The Empire Strikes Back Pictures From: [email protected]

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Would Lower Market Rates Pump Up Sales?

Will mortgage rates ever drop to 0 percent?

Zero percent financing has long been a loss leader in the automotive industry, but Keith Gumbinger, vice president of HSH Associates, a provider of mortgage information, says that scenario is unlikely. You’d have to find an investor who would buy a security with a zero return – a hard sell even today.

Jim Sahnger, mortgage associate Palm Beach Financial Network, concurs that the funding would be hard to find “unless there were significant fees on the front end to compensate for costs to originate, deliver, default, etc.”

If 0 percent financing could be funded, Sahnger believes potential borrowers would be lined up, kicking up demand for houses.

Gumbinger isn’t so sure because buying a home is a bet on the economy and that kind of confidence is hard to find, he says. “People are concerned that tomorrow is not going to be better than today.”

Source: MarketWatch.com, Amy Hoak (09/27/2010)

  • Julie Nesbitt

    Julie Nesbitt knows the back trails and by-ways of Northern Virginia real estate.

    Read More

  • Enjoying Winkler Botanical Preserve

    We had a great time walking the trails. 

    Read More

  • Don’t take chances with real estate.

  • REDUCED: 7202 Churchill Rd, McLean

    Open House, Sunday, 1-4 BIG PRICE DROP! 7202 CHURCHILL ROAD McLean, VA 22101 6 Bedrooms 5.5 Bathrooms 6,752 SF $1,695,000

    Read More

  • [FWD: The Empire Strikes Back Pictures]

    We played a game at the office this Sunday. Lots of fun. Sincerely, Will Nesbitt Principal Broker   Nesbitt RealtyAlexandria VA licensed in the Commonwealth of Virginia and the State of Maryland 703 765 0300 (main) 571 237 7902 (direct)888 783 6391 (fax) ——– Original Message ——– Subject: The Empire Strikes Back Pictures From: [email protected]

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Owners Spending Less on Housing

The percentage home owners with mortgages who spent 30 percent or more of their household income on housing, including mortgage payments, taxes, insurance, and utilities, was 37.6 percent in 2009, almost unchanged from 2008. At the same time, the median home price dropped about 6 percent, according to data from the U.S. Census Bureau.

Renters weren’t so lucky. The number of renters spending 30 percent or more of their household income on housing-related costs rose to 51.5 percent of all renters in 2009, rising from 50 percent in 2008, according to the Census.

Two factors affected housing affordability:

  • Median household income, adjusted for inflation, fell 2.9 percent in 2009 as unemployment rose.
  • Median monthly housing costs, including rent and utilities, rose 3 percent in 2009 from $818 to $842.

Source: USA Today (09/29/2010)

What’s New in New Housing Design

Here are the products grabbing the attention of the home building and remodeling industries, according to Bill Millholland, executive vice president of sales and marketing at Case Design/Remodeling in Maryland, and Jamie Gibbs, a New York-based interior designer:

  • Appliance Drawers. Small warning drawers, modest-sized dishwasher drawers for small loads, refrigerator drawers and microwave drawers.
  • Counter-depth refrigerators. Some are only 24 inches deep.
  • Motion-detecting faucets. Like you’d find in the restrooms of businesses.
  • LED (light-emitting diode) lighting. These are used under cabinets and in ceiling fixtures as a longer-lasting, more efficient alternative to compact fluorescent lamps and incandescent bulbs.
  • Electric heated floors. A nice touch in bathrooms,
  • Showers with multiple heads and body sprays. Bathtubs are out.

Source: The Washington Post (09/25/2010)

Recommended Lenders

Will Nesbitt -- principal broker of Condo Alexandria / Nesbitt Realty

I’m often asked for recommendations for financing.  First-time home buyers often don’t know where to begin, but even veteran purchasers like to know who I suggest.  This is also important for relocation buyers.  Condo Alexandria\ Nesbitt Realty never makes any money off of loans and our only goal is to see that your transaction happens smoothly and at the lowest cost.  My recommendations are based on direct experience, so this list only includes folks I know personally.

One distinction for first-time buyers: a mortgage broker is a company that arranges for loans with lenders.  Mortgage brokers don’t technically make the loans, rather they get a cut from the bank for finding borrowers.  Mortgage bankers actually loan the money.  Mortgage bankers usually have good prices.  Mortgage brokers with low overhead can sometimes beat the banker’s price. On the other hand, mortgage brokers without a conscience can hammer the consumer.  In other words, mortgage brokers often have more discretion on their price.

Condominium Mortgage

Condominium Mortgage is a mortgage broker in Alexandria VA.  Although we used to send the bulk of our loans to Condominium Mortgage and American Affordable Mortgage, many of the lenders that provided loans to to these Condominium Mortgage have gone out of business. This company now focuses on buyers with top-flight credit and bankable incomes, providing discount loans for high-end buyers.

Alexandria Financial

Dillon Lee runs a nearly one man brokerage in Alexandria VA.  Dillon has years of experience and can help all types of buyers. He specializes in keeping his overhead low to pass savings on to consumers.  You won’t always get Dillon the first ring, but once he answers he is a great loan officer.  Call him at 703 360 8868.

Don Bucci

Don Bucci is a friend of mine dating back more than 25 years ago to my time in the Army.  Don works for a mortgage banker with an office in Richmond VA where he resides. Don can sometimes beat Northern VA prices because of lower overhead working in Richmond.  On the other hand, Don can’t meet with you personally if you’re buying a home in Northern VA.  His number is 804 400 0864.

Kelly Garant

Kelly works for Wells Fargo.  I think the “big boy” banks like Wells Fargo and Bank of America often have great prices, but it’s tough to get an experienced and accountable loan officer for these big banks.  (Tip: NEVER call the 800 number for a mortgage.) You can get Kelly at 703 442 5338. She works for the big bank but you’ll get the service you expect from a small lender.

James Thompson

James is fairly new to my acquaintance but he’s impressed me with his attention to detail, pricing and work ethic. James works for AmericaHomeKey, Inc.  You can call him at 240 499 1140.

A few suggestions from Patsy Woods

Patsy has had dealings with the lenders above, but has also had good experience with these lenders.

your realtor
  • Lila Manley — Senior Mortgage Banker Pinnacle Mortgage Group 877-716-9006 Ext 872
  • Gregory Williams — Home Mortgage Consultant, Wells Fargo Home Mortgage 7620 Little River Turnpike, Suite 300, Annandale, VA 22003, (703) 333-5560
  • Kenneth A. Cyr, CMPS Mortgage Banker, Mortgage Planning Specialist, Asst. Manager Primary Residential Mortgage, Inc. 8001 Braddock Road, Suite 101, Springfield VA 22151. Call him at 703.426.6968

A few more tips …

Credit Unions promise great rates but there is often a funding fee or other fee that basically makes the price the same as a mortgage broker or mortgage banker.  The trouble is the service at credit unions is often poor.

Above all, we’re I’ve seen the biggest problems is with out-of-the-area fly-by-night Internet lenders who hang customers out to dry after promising a great rate.

Recently, I’ve also seen a pattern of delayed closings with Bank of America.  Bank of America has had an influx of business since the onset of the financial crisis and they don’t appear equipped to handle the volume of loans they are trying to do.

Will Nesbitt is the principal broker of Condo Alexandria / Nesbitt Realty.

Sellers Quickly Transform Property with Paint

The best way to update a property is to paint it. It’s a job that many sellers can do themselves.

Here are six suggestions for making the work go quickly.

Montebello’s Living Spaces
  1. Move the furniture. Get as much furniture as possible out of the way, and then cover what’s left with plastic drop cloths held in place with masking tape.
  2. Buy good paint. Top-quality latex interior paint will hide what’s underneath and make the job go faster.
  3. Tape the edges. Taping the edges with painters tape will speed up the job and make the results more professional.
  4. Work top down. Paint the ceiling first, then the walls, then the windows and trim and finally the baseboards. This will cut down on time spent repairing drips and splatter marks.
  5. Cut in the corners. Applying a three-inch band of paint around the edges will allow you to fill in the middle with a paint roller.
  6. Apply paint generously. Trying to stretch the paint won’t save sellers any money if they have to repaint.

Source: Paint Quality Institute (09/21/2010)

  • Julie Nesbitt

    Julie Nesbitt knows the back trails and by-ways of Northern Virginia real estate.

    Read More

  • Enjoying Winkler Botanical Preserve

    We had a great time walking the trails. 

    Read More

  • Don’t take chances with real estate.

  • REDUCED: 7202 Churchill Rd, McLean

    Open House, Sunday, 1-4 BIG PRICE DROP! 7202 CHURCHILL ROAD McLean, VA 22101 6 Bedrooms 5.5 Bathrooms 6,752 SF $1,695,000

    Read More

  • [FWD: The Empire Strikes Back Pictures]

    We played a game at the office this Sunday. Lots of fun. Sincerely, Will Nesbitt Principal Broker   Nesbitt RealtyAlexandria VA licensed in the Commonwealth of Virginia and the State of Maryland 703 765 0300 (main) 571 237 7902 (direct)888 783 6391 (fax) ——– Original Message ——– Subject: The Empire Strikes Back Pictures From: [email protected]

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Housing Starts Rose in August

Housing starts rose 10.5 percent in August to an annual rate of 598,000 homes, the most since April, the Commerce Department announced Monday.

Housing starts were up 2.2 percent in August compared to the same month last year, while permits decreased 6.7 percent.

Construction of single-family houses rose 4.3 percent to a 438,000 annual rate after declining 6.7 percent in July.

Construction of multi-family homes increased 32 percent to an annual pace of 160,000.

Housing starts increased 7 percent in the South, 34.3 percent in the West, and 21.7 percent in the Midwest. Starts fell 24.3 percent in the Northeast.

Source: Bloomberg, Courtney Schlisserman (09/21/2010)

  • Inlet Cove is near Fort Belvoir and Potomac Mills

    Inlet Cove is alongside Route 1 This neighborhood of townhouses is near grocers and eateries Inlet Cove is close to Fort Belvoir, Alexandria, and Potomac Mills shops, in the city of Woodbridge Interior to these properties are multilevel Inlet Cove is serene

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  • Pending Home Sales on an Upswing

    Pending home sales increased again in March, affirming that a surge of home sales is unfolding for the spring home buying season, according to the National Association of REALTORS®. The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, rose 5.3 percent to 102.9 from 97.7 in February, and is 21.1…

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  • A Good Time to Buy a High-End Home

    Some of the best housing deals are on high-end homes, many over $1 million. Some of them need TLC or they aren’t in the most-coveted locations. But there are plenty of desirable properties and lots of sellers who are getting impatient. Buyers with cash have the best opportunities. Buyers who need a mortgage should move…

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  • Looking for the big price drop?

    If you love price drops we have good news. NesbittRealty.com now features the biggest and most recent price drops on area real estate. We have condos, townhouses and houses all with big price reductions. These HOT properties will attract a lot of attention so contact us to take a closer look. In general we look…

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  • Who is today’s homebuyer and why are they buying?

    The National Association of Realtors recently did a study about the characteristics of home buyers. Some of the findings might surprise you. Thirteen percent of buyers purchased a home with one or more parents and grandparents together with adult children. There were several reasons given for purchasing a multi-generational home. Cost savings; Children over the…

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Housing Affordability: A Possible Good Omen

Four Leaf Clover 068
Four-leaf clover

Amid all the media reports on how housing is still “in the tank,” one piece of news seemed to have escaped many of the pundits. Housing affordability could possibly reach an all-time high of near 200 in the second half of this year. That is, a household making the median income would have twice the income necessary to buy a median-priced home in America. To date, NAR’s housing affordability index reached an all-time high of 184 back in early 2009. It was only slightly above 100 during the housing bubble years, meaning that qualifying income barely met the requirements to buy a home even with a 20 percent down payment (if not using teaser-rate, funny/toxic mortgages). Historically over the past 40 years, the average affordability index was 118.

The principal reason for the expected record high housing affordability index reading is the rock bottom mortgage rates of 4.4 percent on a 30-year fixed rate. Add to that modest gains in the average wage rate, which rose 3 percent in 2009 and is up 1.2 percent this year-to-date in spite of the high unemployment rate. Consider now versus then when home prices were at their “bubble” peak in 2006.

Shiny Penny Macro April 30, 20101
shiny penny

Of course, like all things “real estate,” affordability is local as well. There will be considerable local market variations in affordability conditions. Remember that one of the main components of NAR’s affordability index is home prices. Some markets encountered only minimal price declines while others

such as Las Vegas experienced a 60 percent nose dive. Still, on a nationwide basis, the affordability conditions have risen to compelling levels.

However, if a sizable number of people view – rightly or wrongly – that home prices will fall further and raise the affordability levels to even higher levels, then homebuying will continue to remain soft. That will lead to a further build up of inventory and thus hold back a true price recovery. The price decline potential was evident in July’s housing data. Existing-home sales plunged 27 percent to 3.83 million seasonally adjusted annualized units – their lowest level since 1995. Even though there was little change in inventory (with 4 million homes available for sale), the actual months’ supply of inventory rose sharply to 12.5. The sales decline reflected the aftermath of taking the stimulus medicine away. For nearly all of June, homebuyers knew they had to close the deal by the end of June to qualify for the tax credit. Therefore – and naturally – people rushed in to close in June and not wait till July. Qualitative REALTOR® member survey data about recent homebuyers suggest that investors, all-cash buyers, and buyers of expensive homes stayed in the market in July, but first-time buyers did not.

Sky Palette
rainbow

Going forward, home prices may fall, although I doubt in any meaningful way. Even if they do decline, there is no guarantee that affordability conditions will improve. Again, the principal reason for our current exceptionally high affordability conditions is lower mortgage rates. If prices were to fall 10 percent but mortgage rates creep up to 5.4 percent, then the affordability conditions could actually worsen.

As for home sales, there are far fewer people in the pipeline to buy a home in the immediate months after the tax credit expiration.

Consequently, expect continuing low sales at least through autumn. But sales should slowly come back because of the high expected affordability conditions. Winter months are generally slow ones for home sales. If sales this coming winter matches up with past “normal” winters, then it would be a good sign that the housing market is getting back on track to normal sales levels. If sales this winter remain 20 to 30 percent lower than normal, then we are looking at trouble with high inventory stuck at a double-digit months’ supply. Remember that the months-supply figure is also impacted by the raw count of homes listed for sale. Since inventory generally declines from summer to winter, the months’ supply will steadily fall, hopefully to 8 or 9 months, and close to the level consistent with continuing price stabilization. For example, inventory fell by 600,000 to 800,000 from July to December in each of the past 3 years. If a similar decline occurs this year and home sales slowly bounce back to 4.5 million (annualized sales) then we can have continuing price stabilization.

A compelling argument can be made about the best affordability conditions, but it will be for naught if consumers lack confidence. Confidence in turn will be directly impacted by the general direction of the economy. Unfortunately, the economic recovery is coming to a virtual halt. GDP growth rates in the past three successive quarters were: 5.0%, 3.7%, and 1.6%. The upcoming GDP growth rates could be even lower figures. (If it turns negative for two straight quarters, then another fresh recession is at hand). At such tepid growth rate the unemployment rate could well reach 10 percent. GDP growth in a post-recessionary environment should be 5 percent or better, not only to start growing but to compensate for the recessionary downfall.

Entrance to the Jamieson Condominium

The weak economic expansion means that the job market will continue to look bleak and the unemployment rate could top 10 percent. This does not mean the country is necessary losing jobs on net right now. There have in fact been 763,000 private sector job creations from the beginning of the year to August. The soft economic expansion just means that the job creation pace is too slow to accommodate the rise in the labor force, particularly the recent high school and college graduates looking for work, aside from the need to fully re-hire the near 8 million job losses that occurred in the 2008 and 2009 recession. In a normal good year, there would be 2.5 to 3 million annual private sector job gains.

The homebuyer tax credit appears to have done its job in preventing home price over-correction. NAR prices show stabilizing pattern for the past 12 months while Case-Shiller price data show stabilizing patter for the past 18 months. We’ll still need to wait several more months to get a definitive gauge on price stabilization. At this point, we’ll see how the housing market behaves in the absence of the stimulus medicine. As with any sectors in the economy, it is very unhealthy to be dependent on government help for a long period. Compelling affordability conditions and some job creations are a move in the right direction and we have to just allow some time for these factors to work their way into the system. But an important question that will linger is of when consumer confidence will genuinely return to close on the deal.
by Lawrence Yun, NAR Chief Economist

Homes For Sale At Lemon Road

Lemon Road is located in McLean, Falls Church, VA 22101.

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Lee Boulevard Heights is located at Seven Corners, Falls Church, VA 22044.

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