Loudoun Real Estate Blog

The stricter lending standards, falling home vallues and tough economy is affecting everyone. However, the National Association of Realtors reported that for the 3rd quarter of this year, sales and median home prices fell across the United States expect in four states. Those four states were Nevada, California, Arizona and Virginia.  In Loudoun County, sales seem to have slowed lately though. During the entire month of October, 414 homes went under contract in Loudoun County. In November, there were only 382 homes to go under contract. It will be interesting to see how this compares to the rest of the country.  

At a recent workshop, Roger Arnold, a macro economist who does consulting for government agencies, stated that the Washington D.C. Metro Area is the most promising real estate market in the world. He gave three main points:

1. Washington has become the center of the world politically and now financially with the implosion of Wall Street, the size of the bailout and global recession.

2. The country is going through a deflationary period in the private sectors that will be offset by an increase in government.

3. The Washington DC area has a shortage of residential housing, office space and adequate transportation.

The future of the Washington D.C. area housing market may be brighter than other parts of the country.

After a relatively active real estate market over the summer, it seems everything came to a halt in September-at least in the upper price ranges. The market data confirms this. According to the Metropolitan Regional Information Systems, Inc.-MLS Resale Data, in the Ashburn zip code of 20147 during the period from 9/01/08-9/30/08 there were 24 active listings over $800,000 and not one sold during that time. Overall in the 20147 zip code there were 310 active listings with 59 selling during the month of September which basically represents a little over 5 months of inventory.

The Sterling/Potomac Falls zip code of 20165 fared a little better. During the period of 9/1/08-9/30/08, there were 167 active listings with 33 homes selling during the same time period. This represents a 5 month invenotry.  Unlike Ashburn, the upper price ranges did still have some activity in September. During the month of September, there were 6 active listings in the 20165 zip code listed above $800,000 with two homes selling during that time over $800,000.

Hopefully, things will settle down and activity will pick up over the next few months. There definitely are some great buys out there.

Effective June 1, 2008, Fannie Mae and Freddie Mac have dropped their “declining market” policy requiring an addition 5% down payment for properties determined to be in declining or “at risk” markets. Hopefully this will impact Jumbo loans as well as conforming loans but a formal announcement has not been made. This is good news for buyers and sellers especially in neighborhoods that are categorized as “declining.” Hopefully, programs will continue to be announced to help buyers and sellers in this market.

I attended a seminar sponsored by Countrywide Mortgage on Tuesday May 6th at the Crowne Plaza in Tysons Corner, Virginia which featured Tom Fiddler, an expert in the real estate industry. It definitely put the current real estate market in perspective. He gave some background about the bond ratings of mortgages, etc. but more importantly emphasized that we need to "celebrate affordability" and I couldn’t agree more. Home prices are down and household income is still up. The final piece of the puzzle is interest rates-which are still so low. It is one of the most affordable times to buy a home nationwide in two decades! Obviously, at some point, probably after the election, interest rates will have to rise.

Mr. Fiddler also emphasized using FHA to the fullest. Not only do FHA loans typically end up being cheaper than conventional loans right now, if home prices were to stay flat or even go lower and interest rates go higher, the sellers who have FHA loans will be in a much better selling position because of the assumability of FHA loans. Tom Fiddler was an excellent speaker and I highly recommend seeing a seminar if you have an opportunity.

Thats right! On April 26th Loudoun County wants you to feel free to dump that hazardous waste off and get it out of your home to be properly disposed of. The county has a fabulous program dealing with household hazardous materials which I don’t think many people know about. From March to November the county has monthly drop off locations at different areas through-out the county to make it convenient for people to dispose of anything the trash company won’t take or shouldn’t go into the county landfill.

This month’s location is at Loudoun Valley High School 340 N. Maple Avenue, Purcellville Virginia between the hours of 8:30am and 2:30pm. For more information visit the county’s website .

Not sure what is hazardous waste? Click here for a list of common household items .

Open Houses might expose your home to more than potential buyers. It may expose your home to a possible burglary. A Leesburg woman was recently charged with 34 crimes related to accusations that she used her position at a moving company to attend open houses and burglarize homes. There have been several homes burglarized in Loudoun County since November 2007 many of which resulted from an Open House.  See the full story here.  I am happy to do Open Houses for my clients but do not think it is the most effective way to sell homes. My job is to find the real estate agent that has a qualified and motivated buyer or to find a qualified and motivated buyer myself. The majority of the people who attend Open Houses are considering buying or selling in the future.

Gary M. Clemens, Loudoun County’s Clerk of the Circuit Court, announced that his office is working with the clerks of circuit court from the City of Alexandria, Arlington County, Fairfax County and Prince William County on establishing uniform guidelines related to the refund of the Northern Virginia Transportation Grantor’s Tax paid on deeds recorded between January 1, 2008 and March 3, 2008.The 2007 Virginia General Assembly passed legislation authorizing certain fees and taxes to be imposed by the Northern Virginia Transportation Authority (NVTA) which became effective on January 1, 2008. The Virginia Supreme Court ruled that these fees and taxes were unconstitutional on February 29, 2008 and the clerks of circuit court stopped collection of the taxes on March 3, 2008 as directed by the Supreme Court’s ruling.

The clerks of circuit court in Northern Virginia will be required to issue refunds to the real estate settlement agents who paid the taxes to the clerk. The settlements agents are then required to provide the refund of the taxes to the individuals who paid the taxes as part of the settlement of the a real estate transaction.

A listing of the Loudoun deed transactions where the NVTA grantor taxes were paid and eligible for a refund will be posted on the Loudoun County Clerk of the Circuit Court’s website at www.loudoun.gov/clerk to assist citizens and settlement agents. The clerk’s office will also be providing detailed guidelines for the refund process once those guidelines are aproved by all five circuit court clerks in Northern Virginia

The Board of Supervisors adopted a new tax rate for Loudoun County on April 1st. The new real estate tax rate is $1.14 for every $100 of a home’s assessed value. This is the highest rate for Loudoun County since 1981. The rate in 2008 was 96 cents. Even with the higher tax rate, the Board of Supervisors said the county’s public school system will fall short of what the School Board said it needed from county tax dollars. Homeowners won’t be happy with the higher rate because most homes would sell right now at a price far lower than the assessed values from Loudoun County.  Click here for the public news release.

There were actually some positive signs in the real estate market at the national level lately. New mortgage applications jumped up in the beginning of March for the first time in more than a month according to the Mortgage Bankers Assocation. Also, the pending home sale index didn’t decline in February as many predicted. It stayed flat. Finally, the Federal Reserve is keeping short term interest rates low. Could this mean real estate conditions are improving? I will keep you posted.

Metropolitan Regional Information Systems (MRIS), which is the MLS system that all of Northern Virginia, including Loudoun and Fairfax Counties, most of Maryland and parts of Pennsylvania is changing the Days On Market Property reset time.  The Days On Market Property was the counter that would continue to increase every day the home is listed regardless if the home owner changed Real Estate Agents.

The Days On Market Property use to reset after the property was no longer active for a period of 180 days (6 months).  This value to established in 1993 and was thought to be a good indictor of a complete market cycle.  Since then people have started to move more frequently and value started to lose its meaning.  As of February 15^th 2008 the reset time is being changed to 90 days (3 months) which is a huge improvement and a welcomed change.

The other important factor in this change is that MRIS is going back through all the data and updating the Days On Market Property values.  Here is a quote from MRIS:

MRIS will recalculate the Days On Market for all existing listings.  In terms of appraisers accustomed to the old formula for assessing property value, the statistics that they have always relied on will still maintain value as the “market snapshots” they were intended to be.  Those market snapshots are still valid.

Any thoughts or questions please let us know and I will be happy to answer them.