North Arlington Condo Market Update - August 2008

Zip Codes 22201 and 22203 (includes Ballston, Virginia Square, Clarendon)

	1 BR Units	2BR Units
ACTIVE LISTINGS as of Aug 24
Average List Price	$362,444	$534,537
Number of Active Listings	51	61
Average Property DOM(P) – Actives	66	111
SOLD LISTINGS
Average Sold Price for Previous Month (does not include seller subsidies)	$320,469	$451,453
Number of Sold Listings in Previous Month	16	20
Average Property DOM(P) - Solds	67	56

Absorption Rate (Balanced Market = 6)

1 Bedroom Condos = 3.2

2 Bedroom Condos = 3.1

* Statistics exclude retirement communities

Click here to see the previous North Arlington Condo Market Update

Source: MRIS data as of 08/24/2008. All data deemed reliable but not guaranteed.

$7500 First Time Buyer Tax "Credit" Info

NOTE> This post applies only to homeowners who purchased in 2008. If you purchased in 2009, see the updated version of the credit here.

It's official, the $7500 tax credit for first time buyers is now law. But how will it work?

First of all, it's not really a 'credit' per se -- it's an interest free loan. Nonetheless, as my first time buyer clients will tell you, an interest free loan is the best kind of loan! First time buyers -- defined as buyers who have not owned a principal residence during the 3 year period prior to purchase -- will claim this credit on their tax returns, and receive a credit of 10% of the purchase price, up to a maximum of a $7500 'credit.' (Note this is NOT a deduction. Taxpayers receive the full $7500.) Here are the additional details:

• All homes, including condos, are eligible.
• The 'loan' part comes into play because it must be repaid over a 15 year period at $500/year starting in 2010.
  
• The purchase must be on or after April 9, 2008 and before July 1, 2009. (Note the law says BEFORE, so those of you buying next year - settle on or before July 1!)
• There's an income restriction: Single taxpayers can't make more than $75,000 and married couples are limited to $150,000. Above those limits, the credit is phased out.
  
• Sorry, DC home buyers, you can't claim both this and the DC First Time Buyer credit. (That one is a real credit, not a loan, so for almost everyone the DC credit is the better deal.)
• There doesn't appear to be any way to get the money in advance, so this credit will have to be a 'reimbursement' of sorts for buyers. You can however, as with any purchase, adjust your withholding to better match your (now $7500 lower) tax bill. The closest thing you can do to getting it sooner than later is to buy a home in early 2009, but then you apply the credit to your 2008 return (before April 15) since the law allows you to choose the year in which you apply the credit.
  

You can learn more at www.federalhousingtaxcredit.com

Update 1/29/09: President Obama's $820B stimulus package contains a proposal to eliminate the need to repay the $7500 -- it would change into a straight on credit, rather than the interest free loan it currently is. This bill has passed the House and is currently with the Senate -- the bill is NOT yet law. Stay tuned.

Thinking of Buying an Investment Property? Take This Class.

I don't usually put in plugs for classes or professionals--other than for myself, of course ;) -- but I want to highly recommend a class taught through Arlington County's Adult Education Program called "Landlording." I took this class a few years ago and it was an excellent overview of managing residential properties, tenant and landlord rights, and the Virginia Landlord Tenant Act. A must for anyone considering renting out their home, or buying an investment property.

There are two offerings, both on Monday nights from 6:30 to 9:30. The first is on Sept 22 and the other is Nov 17. Cost is $49 for Arlington residents and $60 for non-residents (and discounts for seniors). You can look at the catalog, and get details on registration, at the Arlington Adult Education site here.

Thinking of buying an investment property? I have some suggestions on neighborhoods that are great values right now, with even more long term potential. Contact me to discuss the pros and cons of owning investment property.

Northern Virginia Real Estate Market Update - The Good, The Bad, The Ugly

It's tough to interpret the market today.

The Good: Inventory in Northern Virginia remained below the "balanced" mark of 6 months for the second month in a row, as sales increased. The PMI Mortgage Insurance Company has released its latest index which indicates ranks the liklihood of declining markets across the US. Our area got a score of 21.4 which, for you glass-half-empty folks, means there is a 21.4% chance that prices will be lower in two years. For the glass-half-full folks: they predict almost an 80% chance that prices in our area will rise over the next two years.

Even Loudoun County, which was hit significantly harder than close-in markets like Arlington and Alexandria, showed significant improvement, with the highest number of monthly sales since December 2005. Sterling Park, with the highest rate of foreclosures in Loudoun, had a year over year sales increase of 94%, and inventory across the County is down 25%!

Barron's has noted that numbers may indicate we are nearing the bottom.

The Bad: Case-Schiller continued to report declines in our area: 1% decline this quarter, and 15% year over year. Predictions continue to roll in for slowed growth and an underperforming economy as consumer confidence and home prices slide.

The Ugly: Foreclosures remained high, though buying one is not for the feint of heart. Here is a good article to guide your expectations, and another with some tips on buying an REO property, and don't forget to read my blog post series on foreclosure risks as well.

So should we believe the bad news or the good? The bottom line is that all of it is true! The decision to buy or sell a home is one that depends on your situation, timing, finances, and neighborhood. Don't trust that decision to a single headline. Give me a call to discuss if it makes sense for you.

Beautiful 1BR in Logan Circle - Open Sunday!

I have a new listing on the market: a beautiful 1BR just a block off of Logan Circle! It features an open floorplan, and at 800 sq ft both the living area and the bedroom area are quite large. Totally renovated, hardwood floors, in-unit washer/dryer and low condo fees! As you all know, I provide my sellers with lots of services, including high-quality photographers and brochures, and a dedicated website. Check out more at www.1225NStreet.com, and come by the open house on Sunday, August 3 from 1:00 to 4:00. I'll be at 1225 N St NW, Unit #B. Come by to talk about the market and see if I can help you with your home search!