Real Estate Information

The asking prices of more than one-fourth of U.S. homes on the market as of Oct. 1, 2009 have been cut at least once, and the average discount is 10 percent, according to the latest Price Reduction Report by Trulia. The total amount slashed from home prices is $28.4 billion, a $967 million increase from June 2009.

Of the 10 states that had the highest percentage of homes with price reductions, five are located in the Northeast — Massachusetts, Rhode Island, Connecticut, New Hampshire and New Jersey. Among the states with the largest price cuts, seven are located in the West where price reductions average 13 percent.

Luxury homes — those listed at $2 million or higher — continue to be hit hard. The average price reduction on luxury homes is 14 percent. While they represent less than 2 percent of all current listings on Trulia, luxury homes account for 25 percent of the $28.4 billion in home price reductions, the survey finds.

Very interesting report and thanks to the folks at Trulia for gathering this data.  Here in the New River Valley we are seeing homes that are priced realistically from the start as to avoid price reductions.  There will always be overpriced homes but not from motivated Sellers - and the key word is MOTIVATED!

Before you splurge on that pricey remodeling project, beware: It may not pay you back when it's time to sell.

Considering all the blood, sweat and tears (not to mention money) it takes to make your dream renovation a reality, you'd expect to be handsomely rewarded with a boost in your home's value. Unfortunately, not every remodeling project will bring a handsome return on investment -- and some might even repel future buyers. You might want to think twice about springing for these so-called upgrades.

Over-the-top improvements.
When it comes to renovations, bigger isn't always better. While bringing your post-war bathroom into the 21st century will increase your home's market value, installing a steam shower and carved marble tub probably won't pay off. Before your minor upgrade turns into a home-improvement bender, ask yourself whether potential buyers in your area are likely to pony up for posh upgrades. "People should be careful about over-improving for their neighborhood," advises Stephanie Singer, a spokesperson for the National Association of Realtors. "If you're in a neighborhood with traditional kitchens, and you put in a Viking stove and granite countertops, that's fine. But keep in mind that buyers probably aren't going to value that to the extent that you do." To get the best return on your investment, scour local listings to see what's standard in your area, and then bring your decor up to speed -- but don't leave the Joneses in the dust.

Home office overhauls.
If you work from home, a designated workspace is a must-have (and a potential tax deduction). But according to a report from Remodeling magazine, overhauling your office won't pay off when you sell your home -- especially if you borrow usable space from a bedroom, living room or garage. Treat yourself to that mahogany desk and built-in bookcase if you'd like, but keep in mind that you'll only earn back about 50 percent of the job cost.

Swimming pools.
Is there anything better than lounging by the pool with a book in one hand and a margarita in the other? Well, it depends on who you ask. "Some people see a swimming pool as a major enhancement. Others might see it as a major headache," Singer says. Your backyard oasis could actually deter those buyers who don't want to deal with skimming, filtering, PH-balancing, heating, repairing and winterizing this high-maintenance amenity. Unless you live in a Southern state where pools are the norm, don't expect to recoup the money -- anywhere from $10,000 to $50,000 -- that you've spent on the big dig.

New roofing.
Cedar shakes, clay tile or architectural shingles can instantly transform your house, but they probably won't have the same effect on your sale price. After all, buyers think of a roof as a bare necessity -- not a luxury that will inspire them to shell out extra cash. Still, don't put off a much-needed roof repair just because you're worried about the return on investment. If buyers notice a leaky roof or cracked shingles during their home inspection, they're likely to demand a concession for the repairs -- so you may as well fix it now and enjoy it 'til you sell.

Specialized spaces.
Maybe your recent trip to Tuscany inspired you to convert your basement into a wine cellar. Or you've always dreamed of replacing your boring front door with a working drawbridge. Or your kids convinced you to install a fireman's pole between floors. Whatever your pet project may be, don't expect every potential buyer to share your enthusiasm. "There's a limited audience for that kind of thing," Singer explains. "People just don't see the utility." Quirky renovations can personalize your home (and maybe earn you some bragging rights!) but buyers probably won't be willing to pay a premium for them.

Of course, even if a project won't drive up your home's resale value, that doesn't mean it's a waste of money. "Remodeling a home is a personal decision anyway, so sometimes there are projects you just want to do for yourself," Singer says. "You do have to live in the home; you're not always thinking about resale. Is it a worthwhile project for you? Is it going to increase your enjoyment of the house?" If you're not planning to sell anytime soon, and a new koi pond just screams "home sweet home" to you, go ahead and break out the toolbox.

Written by Kara Wahlgren

Feels like Fall is definitely in the air - it's a brisk 51 degrees outside as I write this update!

The Economy is Primed

Ten of Virginia's 15 major employment sectors saw growth in Q2 2009.  In July 2009 CNBC named the Commonwealth the Top State for Business for its economic growth, affordable cost of doing business, talented workforce and other factors.

The surge in business means more competition for homes and future price appreciation.

Remember, with home loan rates still low as well as a juicy tax credit for First Time Home Buyers that is going to expire on November 30th, it makes sense to get off the fence if you've been considering a home purchase .  Or do you have a family member, neighbor, friend or coworker who might benefit from getting some good home loan advice?

I'm always glad to get your referrals, so simply let me know who I might be able to help.

How Full Is The Glass Anyway?

We all know the economy will get even better and that we'll all look back at this time in history with a whole new perspective. In fact it's already improved from just a year ago! What keeps us strong and keeps a nation from failing is hope fueld by optimisism.

"The optimist proclaims we live in the best of all possible worlds; and the pessimist fears this is true." - James Cabell, American novelist and journalist (1879-1958)

What is optimism? It is a belief that things in our past were good for us and taught us lessons even if they were hard. It is also the belief that things will be better in the future.

Contrasts between optimism and pessimism: Optimism breathes life into you each day. Pessimism drains you. Optimism helps you to take needed risks. Pessimism plays it safe and never accomplishes much. Optimism empowers those around you. Pessimism drags them down. Optimism inspires people to greater heights. Pessimism deflates people to new lows. The only way that optimism and pessimism are the same is that they are both self-fulfilled. We choose to look at the world the way we want. Have you ever met a successful pessimist? Become an optimist and see your world change before your eyes. Remember, the glass is always half full -- we're halfway there!

"What you spend years building may be destroyed overnight. Build anyway." - Kent M. Keith

Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.12 percent with an average 0.7 point for the week ending August 20, 2009, down from last week when it averaged 5.29 percent. Last year at this time, the 30-year FRM averaged 6.47 percent.

The 15-year FRM this week averaged 4.56 percent with an average 0.7 point, down from last week when it averaged 4.68 percent. A year ago at this time, the 15-year FRM averaged 6.00 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.57 percent this week, with an average 0.6 point, down from last week when it averaged 4.75 percent. A year ago, the 5-year ARM averaged 5.99 percent.

One-year Treasury-indexed ARMs averaged 4.69 percent this week with an average 0.5 point, down from last week when it averaged 4.72 percent. At this time last year, the 1-year ARM averaged 5.29 percent.

“U.S. Treasury bond yields fell nearly a quarter of a percentage point over the week, and other long-term yields followed suit,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Interest rates on 30-year and 15-year fixed-rate mortgages fell to the lowest level since the end of May, while initial rates on 5/1 hybrid ARMs declined to levels not seen since January 2005."

“Low mortgage rates are helping to reinforce the housing market. New construction on one-family homes rose for the fifth consecutive month in July to an annualized pace of almost 500,000 homes, the most since October 2008. In addition, homebuilder views of housing market conditions for the remainder of the year rose for the second month in a row in August to the most positive reading since June 2008, according to the National Association of Home Builders.”

Good news on the housing front - after dropping for three years, home prices appear to be stabilizing. 

The median national home price today is about $169,000 which is down almost 14% from a year ago and an estimated 30% from its peak.

The First Time Home Buyer Tax Credit, which Congress recently improved by eliminating the the repayment requirement and increasing the benefit to $8,000 is working.

The credit, coupled with all-time-high housing affordability and continuing low interest rates, is leading to solid inventory improvement in most markets.

I've just posted additional information about the tax credit on my podcast and you can listen by clicking here.

In order to take advantage of the tax credit, you must purchase your home by December 1st - the clock is ticking down!  Please call or email me today if you would like to view homes or need help with getting your financing lined up - I'm happy to help!

OPEN HOUSE - Sunday the 23rd - COME SEE!!