Northern Virginia Inventory Sees MASSIVE Drops

Update 5/9/09: Looks like I've got some investigating to do - the final MRIS numbers are published (updated graphs now available at my website here - click on the "Market Stats" in the left sidebar) and they aren't even close to the "live" data I ran on the last day of the month. Not sure what's going on -- seriously, how can hundreds of listings be not there on the last day of the month but then appear retroactively 9 days later? I'll look into it and post results here when I get them. The short story is that inventory didn't drop in most cases--just a tiny increase of about 2% over last month for NoVA, for example. Still surprising but not nearly the big story the initial data hinted at. Contracts are up about 12% over last month, so the buyers are definitely biting! Obviously with an increase in contracts disproportional to the slight increase in inventory, it still indicates a shift in the market, just perhaps not that dramatic a shift as originally indicated.

In the meantime, here are some excellent charts detailing real estate inventory levels that illustrate my points and appear to be using the "live" data just as I had.

Original Post:
This. Is. Big. News. Typically in the Spring (from February through June) we see run ups in inventory as sellers prepare their homes for market. The final numbers aren't out just yet, but I think both buyers and sellers are going to be shocked by April's real estate statistics.

Let's take a look at the Arlington numbers I ran from today's MRIS (the consortium that owns our area's multiple listing service.) The spring run up looks like this for January through April: 875 - 925 - 986 --------and 793 for April! What?! That is the lowest number of homes available since February 2007. A 21% DROP in inventory in Arlington?! During SPRING?

And Northern Virginia as a whole: 7545 - 7811 - 8069 ------ and 5435!
A WHOPPING 33% DROP and the lowest number of homes for sale in NoVA since August 2005! Remember August 2005? When buyers were running around bidding things up like crazy because there weren't enough homes to go around?

What's going on?? First, buyers are getting it! Low prices, the lowest interest rates in 50 years, and the $8000 first time buyer tax credit have them out in droves. Just in the past week I had 3 of 4 buyers who submitted offers get outbid on properties in various locations.

To add insult to inventory, potential sellers are waiting to put their homes on the market because they don't want to have to take low offers. Much of the inventory, especially in the suburbs, is "distressed" (foreclosures and short sales) and many are in such poor condition that they will not sell for a very, very long time. So the level of "good" inventory (that is, will realistically sell within the next few months) is even lower than the numbers show. Homeowners who are on the fence about selling don't want to be lumped in with distressed comps, so aren't putting their homes on the market.

Finally, the 'moratorium' on foreclosures in the first quarter contributed to a lack of new distressed inventory coming on the market. But if there's another wave coming, it's not in the pipeline yet: a review of "preforeclosure" filings in Arlington listed just 73 properties, and Fairfax County showed 1000 (a big number, no doubt, but not enough to make up for the 2500 drop in inventory from March to April.)

What are the implications of this?

Buyers: Unless there's a big wave in May, you're going to have a lot less to choose from, especially if you want something that is 'move in ready.' Less inventory means more competition for the 'good' listings -- expect to pay closer to list price for those, and be ready to move quickly when you see one you like. Chances other other people are circling it too. Hope for a big bump in the coming weeks - otherwise it may be a tough road if you're trying to buy before November 30 to take advantage of the tax credit. Typically inventory peaks in June, with another much smaller bump in Sept/Oct.

Get started with your search:
Sign up to attend a free first time home buyer class or search the MLS

Sellers: If you are on the fence about selling, go ahead and get it on the market asap, especially if your home is a good option for a first time buyer. Make sure you put your best foot forward with some sprucing up, staging, multiple photos taken by a professional, a home warranty, and an extensive web presence as part of a comprehensive marketing plan. And it still needs to be priced right, of course. If you're wondering what the comps are for your neighborhood, contact me or visit my sellers resource center.


Source for all data: MRIS as of 5/1/2009. Data deemed accurate but not guaranteed

North Arlington (Orange Line) Condo Market Update - May 2009

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

Source: MRIS as of date of blog post. All data deemed accurate but not guaranteed. Stats exclude retirement communities.

Click here to see last month's stats.

	1 BR Units	2BR Units
ACTIVE LISTINGS as of May 1
Average List Price	$339,093	$561,627
Number of Active Listings	44	55
Average Property DOM(P) – Actives	55	70
SOLD LISTINGS for Apr 2009
Average Sold Price for Previous Month (does not include seller subsidies)	$352,433	$501,563
Number of Sold Listings in Previous Month	9	25
Average Property DOM(P) - Solds	101	63

Arlington Virginia Neighborhoods

I've started a series of blog posts specific to individual Arlington neighborhoods (starting with North Arlington because I live there -- sorry, South Arlington). Each neighborhood will eventually have its stats and a few links posted on this Arlington neighborhood boundary map to give buyers a bird's eye view of Arlington.

Click the links at the bottom to read more about the history and a few current real estate stats on individual neighborhoods. Remember you can always email me if you want to set up an automatic update on your neighborhood's market conditions - it's free and only takes me a few minutes.

Looking to buy a home in North Arlington? I live here and know the area very well. Contact me!

Search the MLS or contact me to set up a custom alert for your favorite neighborhoods!

Are you getting ready to sell your North Arlington home? As an Arlington resident, I can help you best highlight all the positives of living here! Not all agents are alike -- ask me about the services that I provide my sellers including professional photography, staging, and custom websites--after all, most buyers start their home search on the web and DEMAND high quality photos. For a free pricing analysis and comprehensive marketing plan, contact me or visit my Sellers Resource Center.

Arlington Forest

Berkshire Oakwood

Colonial Village

Lyon Park

Maywood

Tara - Leeway Heights

Waycroft - Woodlawn

Westover

North Arlington Condo Market Update - March 2009

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

Source: MRIS. All data deemed accurate but not guaranteed. Stats exclude retirement communities.

	1 BR Units	2BR Units
ACTIVE LISTINGS as of March 4
Average List Price	$348,898	$546,430
Number of Active Listings	37	62
Average Property DOM(P) – Actives	73	87
SOLD LISTINGS for Feb 2009
Average Sold Price for Previous Month (does not include seller subsidies)	$348,370	$466,829
Number of Sold Listings in Previous Month	5	12
Average Property DOM(P) - Solds	73	100

December 2008 Market Stats Available

MRIS (the consortium that owns our regional multiple listing service) has published the December 2008 stats, and I've updated graphs at my website (click on links below).

Arlington Market Stats - Arlington continues to post strong numbers. Only 4.91 months of inventory available, and of the homes that sold in December, an amazing 40% sold in under 1 month! Days on market held steady at 70, and average price increased slightly from the prior month.

Northern Virginia Market Stats - Of note here is the 37% increase in sales in December vs November, and an 8% decline in inventory, bringing the months of inventory down to 5.09 (6 months is considered a balanced market.) December 2007 was a 7.3 months inventory level.

DC Market Stats - Average price dropped significantly from prior month and prior year, which perhaps contributed to the amazing 34% increase in sales in December over November. And when it's good, it's good...almost 40% of the homes that sold in December had contracts in under one month.

Montgomery County Market Stats - MoCo continues to be a strong buyer's market, with the average price almost 20% below the same month in 2007. And the buyers responded--sales increased 22% over the prior month.

The big picture: Still a buyer's market in terms of price and selection, but drops in inventory and huge increases in contracts means the buyers are out there, circling, and ready to jump on good properties quickly if necessary.

If you're thinking about listing your home for sale, contact me to discuss how we can make your home one of those that sells in 30 days. Or sign up for a free Selling Your Home class.

If you're a buyer, give me a ring to talk about the stats in the specific neighborhoods you're looking. Or sign up for a free first time home buyer class.

Search the MLS

Buyers May Not WANT Condo Docs for Short Sales & Foreclosures

I was quoted in the Washington Post yesterday for my recommended strategy of NOT asking for condo docs on a foreclosure or short sale.

In the original article here, the author discusses the fact that:

Virginia law requires sellers or their real estate agents to get a presale financial disclosure packet from the association and give it to buyers. Buyers have three days to review the financial disclosures and rules governing life in the association and can back out of the deal if they don't like what they see. In Maryland, buyers have seven days in which to review the documents and cancel the purchase. In the District, buyers are allowed three business days.

The challenge with short sales and foreclosures is that the sellers either can't or won't provide these documents (which come with a charge of several hundred dollars.) This leaves buyers in a tough spot -- they don't know whether there are any problems with the Association's finances, for example, because they never received the packet. Sometimes buyers can pay for the pack themselves, but often Associations won't give them to anyone but a current owner.

BUT, there's an upside to this frustrating situation: Buyers who never receive the packet retain their right to back out at any time up until, and for 3 to 7 days after receiving them (depending on jurisdiction). See my quote here:

Katie Wethman, a real estate agent in McLean, pointed out a way to game the system. "It can be a strategic choice not to ask for the documents," she wrote. "Buyers retain a right of rescission up until, and for three to seven days after, the receipt of the documents. If the buyer is concerned about timing, financing, finding a better deal, or just getting cold feet, they may wish to delay receipt of those documents as long as possible. They may forgo them altogether in an attempt to keep their right to walk away right up until settlement."

So talk to your agent about your situation and whether it makes sense to try to obtain the documents or not...you may come to regret having asked for them.

Scared about taking on a short sale or foreclosure home because of the rehab work involved? Consider purchasing one using an FHA 203(k) loan, described in my blog post here.

First Time Home Buyer Class - Scheduled in Arlington

Note> For the most recent schedule of dates for 2008 and 2009, please visit the First Time Home Buyer class page at my website. Classes will be held in Montgomery County, DC, Arlington, and elsewhere in Northern Virginia.

The first classes of 2009 are now scheduled at Arlington County Library. As in the past, there is absolutely no cost or obligation to attend this one hour educational session where we will recap the current market conditions (including stats like days on market, inventory levels, and average sales prices), discuss the future outlook, and provide an overview of the home purchase process, including common pitfalls and financing basics. Simply contact us to register (enter seminar and the date in the comments) so that we may have materials available for you. Space is limited. Details are as follows:

Date(s):
Tuesday, February 17, 2009
7:15 pm - 8:30 pm
registration required

Logistics:

Arlington Central Library, 2nd floor meeting room
1015 N. Quincy St
Arlington, VA
Metro: Orange Line/Ballston

Cost: There is no obligation, and the session is FREE, but registration is required by emailing me at Katie@katiewethman.com. Seating is limited.

Related Link: Search the MLS

Read More: Working with Katie as Your Buyer's Agent

Read More: Buyer's Resources

Read More: $7500 Home Buyer Credit

Relocation Guide for the Incoming Administration

Welcome to Washington!

No doubt you’re excited about what the next four years holds for both our country as well as your own relocation. Washington, DC, Northern Virginia, and suburban Maryland are fantastic places to live, as you will soon discover. Obviously there are lots of other factors to consider in choosing a new neighborhood: schools, taxes, amenities, and lifestyle just to name a few. There are lots of great places to live in DC, MD and VA. Here are a few other tips to get you started:

1) Decide whether to rent or buy. If you’re looking for rental resources, check out my web page here. But I’d seriously considering buying if your expected time frame for living here is four years or more. Prices are lower than they’ve been in years, interest rates are low, and opportunities abound. Washington, DC, and Arlington were just named two of the top ten places to live in a recession, and the recent bailout is expected to be a boon to our local economy. This area is often pegged to be one of the first to “recover” and prices are expected to rise in the next two years.

If you’re thinking of buying in the District and meet certain income requirements, you’ll be entitled to a $5000 tax credit! This might also be a good opportunity for you to take advantage of the $7500 tax “credit” (really a loan) recently passed as well.

2) Carefully consider your commute time in choosing where to live. Most transferees to our area are shocked by the commute time—it can easily be 30 minutes to go just 3 or 4 miles, so don’t just look at a map and decide “it’s not that far.” This area’s congestion is among the worst in the nation. Our public transportation system is very good though; our subway system (known as Metro) is fantastic, though very expensive to live near. And don’t forget VRE and MARC trains. If you’re willing to commute by rail, you can get a lot more for your housing dollar. Commute times also vary widely based on whether you choose to live in the District proper, Maryland, or Virginia.

3) Get ready for sticker shock. Despite the national downturn in housing, prices in the Washington, DC, area have held up much better than other parts of the country, especially in close-in areas with under-an-hour commute times or along a metro line. For example, a one bedroom condo in North Arlington along the orange line will run you in the high $300s. But there’s some good news: there are definitely some pockets of under-valued homes right now—areas that were hit disproportionately hard by foreclosures and short sales in recent years, and in my opinion are primed for a comeback due to their proximity to public transportation and/or area demographic and employment trends. Keep in mind, though, that foreclosures and short sales, while attractive in terms of pricing, come with a host of other challenges that may be particularly difficult for someone on a tight timeline.

Looking for more info on area schools, government, crime stats, or cultural events? Check out my web page here. There’s an amazing array of activities and events in this area. I send out a list every month as part of my monthly real estate newsletter. (You can sign up on the right hand side of my blog here.)

If you need help with your relocation, please contact me to discuss the local market and your needs. Put my local knowledge, experience, and consultative background to work for you. I'm licensed in Virginia, Maryland and the District of Columbia, and I’d be happy to help you with your real estate needs!

Relocating to the area? Check out our new blog for military PCSing and relocations: www.militarymovetovirginia.com

How will the election and relocating administration staff impact the Washington, DC, area real estate market?

I’m often asked whether the market will pick up after the election, with the incoming administration. Whether the Republicans or Democrats win, a wave of new junior staffers and senior officials will sweep into Washington, DC. My guess is that the impact on the real estate market will be positive—by which I mean positive for sellers--for this reason: people who make a career of politics often don’t leave once they’re here.

What I mean is this: many of the current administration won’t leave, so it’s not a one-for-one swap in residents even with a complete turnover in administration. Some will have fallen in love with the area, some will have kids in schools or other local commitments that they don’t want to give up, many will be absorbed into local lobbying and law firms. So 100% of the current administration won’t be leaving. Of course there will be some houses put on the market, but I’m guessing not many.

On the flip side, though some of the next administration will undoubtedly already be living locally, there will be definitely be an influx of new residents as staffers and administration are relocated here from other parts of the country for their new appointments. Those people all need a place to live, whether it’s renting or buying. Junior staffers will undoubtedly rent, but senior officials and their families could just as easily look to buy—especially when they absorb the sticker shock of high rental prices in this area. They’ll likely decide this is certainly a good time to buy, with historically low rates, relatively high (though shrinking) level of inventory from which to choose, and their new four-to-eight year time horizon. The District and Arlington, after all, were recently named two of the top ten places to live in a recession, and our local real estate market has held up relatively well versus most of the country.

Since most of these new residents will be working in the District, I expect the real estate market to tighten in the District and close in, metro-accessible areas like Arlington, Alexandria, Bethesda, Silver Spring, Falls Church, and Vienna. Outer areas like Prince William likely won’t see a bump, but that’s okay—their current uptick is coming from the investor community.

Time will tell, but I predict that the incoming administration will cause a tightening of both the rental and purchase markets in close-in areas.

Are you a member of the new administration looking for help in understanding the local real estate market? Confused about where to rent or buy? I’m licensed in DC, VA, and MD and would love to help you. Contact me for an overview of the area and the local real estate trends.

DC & Arlington Named Best Places to Be During a Recession

Worried about the economy? Here's a bit of good news: DC and Arlington were named by Business Week as two of the top ten places to live during a recession. Cities with a focus on health care, law, education, energy, and government rose to the top. The article notes:

Government towns tend to be relatively stable because—even though budgets are slashed—the public sector still must pay the salaries of politicians, building inspectors, police officers, military personnel, and tax-authority employees. Cities that we think might benefit from government employment include Chesapeake, Va., near the massive Norfolk Naval base, and the state capitals of Baton Rouge, La.; Lincoln, Neb.; and Madison, Wis.

And another piece of good news for our local area: the bailout will be a boon to our local economy. The Washington Business Journal notes:

...the most massive government takeover of private capital in U.S. history likely will bring economic activity to the region’s economy, in much the same way the tragedy of the 9/11 terrorist attacks spawned a new homeland security sector, the panelists said. The savings and loan crisis of the late 1980s also led to another government boon, the creation of the Resolution Trust Corp., which maintained office space in downtown D.C. for a decade to deal with fallout from the S&L insolvencies.

“It’s going to create a whole new industry of services for all of us, for the banking sector, for commercial real estate, the advisory and brokerage sector, legal and accounting,” said David Kessler, a principal with the accounting firm Reznick Group P.C. “We’re going to see a boost in the local economy as a result of that.”

Another boon from the bailout: the $5000 tax credit for DC first time home buyers was included in the bill! (Not buying in DC? You can still take advantage of the $7500 first time buyer "credit" (really an interest free loan) until July 9, 2009.)

Clarendon Named One of Nation's 'Great Streets'

Congratulations to the Wilson-Clarendon Blvd area, which was named one of the Top 10 "Great Streets" in America.

The area is one of Arlington's famed "Urban Villages" along the Orange line which combines public transportation, business centers, retail, and residential buildings into a walkable AND livable mini-city. The concept, ground-breaking when it was introduced, has transformed Arlington into one of the most highly sought after places to live and work in our area. North Arlington, in particular, epitomizes the best of both urban and suburban living.

Are you thinking of buying along the Orange Line? Check out recent condo prices in my post here, and contact me to discuss current market conditions and how to get started.

North Arlington Condo Market Update - Oct 2008

North Arlington/Orange Line Condo Prices
Zip Codes 22201, 22203. Includes Ballston, Clarendon

ACTIVE LISTINGS: 1BR Condos / 2BR Condos
Number of Active Listings: 46 / 68
Average List Price: $351,858 / $526,993
Days on Market (Property): 74 / 100

SOLD LISTINGS: 1BR Condos / 2BR Condos
Number of Sold Listings in Prior Month: 18 / 14
Average Sold Price (excludes subsidies): $313,085 / $461,407
Days on Market (Property): 66 / 64


Absorption Rate
6 = Balanced Market;
>6 = Buyer’s Market;
<6 = Seller’s Market

1 Bedroom Condos = 2.5
2 Bedroom Condos = 4.9

* Statistics exclude retirement communities
Click here to see the previous North Arlington Condo Market Update
Source: MRIS data as of 10/17/2008. All data deemed reliable but not guaranteed.

North Arlington Condo Market Update - September 2008

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

	1 BR Units	2BR Units
ACTIVE LISTINGS as of Sep 29
Average List Price	$352,725	$542,493
Number of Active Listings	50	57
Average Property DOM(P) – Actives	69	119
SOLD LISTINGS
Average Sold Price for Previous Month (does not include seller subsidies)	$323,929	$458,069
Number of Sold Listings in Previous Month	31	32
Average Property DOM(P) - Solds	70	64

Absorption Rate

6 = Balanced Market

>6 = Buyer’s Market

<6 = Seller's Market

1 Bedroom Condos = 1.6

2 Bedroom Condos = 1.8

* Statistics exclude retirement communities

Click here to see the previous North Arlington Condo Market Update

Source: MRIS data as of 09/29/2008. All data deemed reliable but not guaranteed.

What Does the Fannie & Freddie Bailout Mean To Home Buyers?

Big news over the weekend and today is that the Federal government is 'bailing out' Fannie Mae and Freddie Mac, who lacked enough access to capital to keep the secondary mortgage market going. While buyers and sellers might initially think that this is bad news, it's actually good, as evidenced by the 300 point market rally at the opening bell today. The markets are glad that what was an 'implied' guarantee is now an explicit one and the markets like transparency.

This is critical to the mortgage industry: Freddie and Fannie buy mortgages that are originated by banks, then package those loans up, slaps a guarantee on them, and sell them to investors. This helps transform what would normally be a very illiquid and long-term investment (30 year mortgages) into a very liquid asset: mortgage-backed securities. This keeps access to capital for borrows high, and interest rates low. Both Fannie and Freddie were chartered by Congress for specifically this purpose.

Before you start slamming this as another taxpayer funded bailout, remember that Congress has control of both their charters and heavily regulates what they can buy and sell. Both companies, though publicly traded, have many restrictions on how they operate their businesses. (The government, for example, sets the conforming loan limit of $417,000, now $729,750 in our area, but due to drop back down to $625,000 at year end). If the governments wants the right to legislate how a publicly traded company--presumably accountable to shareholders--is going to operate, then it's only fair that when things get mucked up the government needs to help out.

In terms of rates, we should expect to see conforming/jumbo-conforming rates drop in the coming weeks by as much as a percentage point.

If you're on the fence about buying, this means the (possibly temporary) return of rates in the 5.5% range! For those of you who recently purchased, keep a close eye on rates -- if rates drop to a full percentage point below what you have, it may actually be worth it for you to refinance. Discuss this with your lender.

Sunny End Unit 4 Level Brick TH in N. Arlington - Open Sunday 1-4

Rarely available spacious and bright corner unit 4br brick townhouse in quiet enclave of homes. Located right on bike path and close enough to walk to Rosslyn metro or Georgetown!

Beautiful sunny kitchen with breakfast area and sliding doors to deck. High ceilings, tons of windows for great light! Main level features gleaming hardwoods, crown molding, chair rails and two bay windows.

Huge master suite with vaulted ceiling, sitting area, two large closets. Luxurious master bath has dual sinks, whirlpool tub & separate shower. Two car garage.

See tons of pictures and more info at www.22ndStreetNorth.com

Listed at $892,500. Open Sun 9/7 1:00 - 4:00.

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.

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.

North Arlington Condo Market Update - July 2008

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

	1 BR Units	2BR Units
ACTIVE LISTINGS as of Jul 22
Average List Price	$353,716	$518,239
Number of Active Listings	49	74
Average Property DOM(P) – Actives	69	90
SOLD LISTINGS
Average Sold Price for Previous Month (does not include seller subsidies)	$346,651	$452,120
Number of Sold Listings in Previous Month	26	16
Average Property DOM(P) - Solds	54	79

Absorption Rate (Balanced Market = 6)

1 Bedroom Condos = 1.9 Months

2 Bedroom Condos = 4.6 Months

* Statistics exclude retirement communities

Click here to see the previous North Arlington Condo Market Update

Source: MRIS data as of 07/22/2008. All data deemed reliable but not guaranteed.

How Do I Start My Home Search?

If you read my recent post "Why I May Not Be Able to Represent You" then you know that it's imperative that you choose an agent early in your home search process. But what happens when you meet with an agent for the first time?

Everyone is different of course, but here is a general idea of how many of my first meetings with clients go. Typically, we'll spend about an hour to go over the basics:

1) Go over the home purchase process.

2) Get an idea of needs vs. wants (i.e., 'must haves') - Bring any listings that you are already interested in.

3) Discuss neighborhoods, what you get for the money, etc.

4) Discuss the financing process. Before we go out to look at properties, you will need to be pre-approved by a lender. If you have already spoken with a lender by this point, bring your Good Faith Estimate(s) and I will go over some key points on them.

We'll also briefly discuss buyer agency agreements, and our mutual obligations.

Depending on the situation, we may even go out to tour properties following this initial meeting. If not, then we'll work together to identify some properties that might fit your needs. If/when we have a few properties (about 6-8) that you wish to view, we'll set up a block of time that we can go see them.

I find that most buyers need to see 8-10 properties (through a combination of open houses and agent tours) in a given neighborhood before they have a good idea of what they like and what they get for the money. Typically during our first few weeks working together we get you "caught up" to homes that are already on the market. Following that, it's easy to keep up to date and see what's new via open houses and brief (1-3 property) tours.

The search process may take longer than you think, though it varies widely by person. The search process itself takes anywhere from a few weeks to a few months. I've had buyers make an offer after just one or two days of looking--it's part focus, part preparation, and part luck.

From contract to settlement (for loan processing, appraisal, home inspections, etc.) then takes 30-60 days additional. You should count on at least 3 months from start to finish.

Shoot me an email today if you'd like to discuss starting your search!

What is the State of The Housing Market? (Multiple Choice)

What is the State of the Housing Market? Please choose the best answer.

A. Looks like the start of a recovery. NAR Q3 2007 Report indicates roughly half of US markets show an increase in median home prices.

B. About flat, plus or minus 1%...OFHEO reports Home Prices down 0.4% in Q3 2007

C. We have years of decline ahead of us…start keeping cash--strike that, better make it Euros--in your mattress, folks! Case Shiller reports “The Sky is Falling, The Sky is Falling!” (Ok, that wasn’t really a headline attributed to them, but that’s basically the message in all of their press releases…pick which ever press release you want.)

Ok, pencils down. You all get a gold star. No matter which one you choose, you're correct. Why? It comes down to the methodology.

The National Association of REALTORS® statistics captures the median value of home transactions that come from all of the Multiple Listing Services nationwide. They cover all home sales at all price points, and release data in a relatively timely manner.

OFHEO, the government agency that works with Fannie Mae and Freddie Mac, also releases its quarterly analyses. They cover 287 markets, but because they are primarily concerned with the conforming loan market, the track only resales that meet that criteria (until recently, loans under $417,000. See my post on Conforming Loan Limits.) It also includes refinancings, which arguably have more generous appraisals. FYI, OFHEO does typically include an attempt at reconciling their numbers to Case Shiller. Because CS is a privately owned index, the exact methodology is impossible to duplicate.)

Case-Shiller, which is probably the most widely quoted analysis, covers only 20 US markets BUT includes ALL price points and loan types—exotics, sub-prime, and limited documentation. Of course the 20 metro areas covered are very large ones, which typically have more expensive homes (anyone ever compare a 4BR colonial on an acre in North Arlington to a 4BR colonial on an acre in Cleveland?) It excludes 13 states completely and has limited information on 29 others—so incomplete or missing data from 42 states! It also weights transactions—a $700,000 home gets weighted twice as heavily in their index as a $350,000 home. But isn’t a 10% decline a 10% decline, regardless of the baseline? Apparently not.

Dramatic headlines sell papers--remember all the 2004-2005 headlines screaming Buy! Buy, Before You're Priced Out Forever! Doesn't sound like a great idea in hindsight, does it?) While I’m definitely not saying that those in the industry can’t spin stats better than a Maytag, I did find this little tidbit from the NAR pretty interesting:

“Another factor that rarely gets attention is that Dr. Shiller, a Yale professor, has a side business in Chicago. His index is used at the Chicago Mercantile Exchange for hedging housing futures values. The more hedging of bets that occur, the more profits go into Dr. Shiller’s bank account. And more hedging of the bets will take place if people believe there will be a crash in housing values. So naturally he has a financial incentive to “scare” the market.”

So what’s a buyer to do? Whom to believe? First, understand the methodology and if one matches up with your situation, pay closer attention to that one. Are you in one CS’s 20 markets and looking to use a no doc loan for a $600K home? CS may be the better measure for you. Are you looking to buy below $417,000? OFHEO may be a better report for you. Want the broadest measure possible? Use NAR. I find that with statistics, perception is reality, and no one calls a market bottom until it’s months behind us, and in the meantime, life goes on. If you’re buying a home, as opposed to an investment property, then do what's best for you, pick a time that works with your life, plan to stay there at least 3-5 years, and buy only what you can afford.

Read more: See my post from last year on Yes, the Market is Down 7% AND up 1%

Read more: from one of my favorite mortgage blogs on spin in the mortgage industry headlines: How Ignoring Adjectives Can Improve Your Understanding of Mortgages

Read more in the Carnival of Real Estate, which included this post. They make the extremely important observation that all real estate is local, so national trends don't mean very much in the first place! Read my posts making similar points here and here. This one is also interesting to look at the very different foreclosure stats, even from county to county, in our area.

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