What constitutes the "bottom of the market"?

I get this question all the time: have we hit the bottom yet? Market by market, that's what's happening across the country. I've been tracking "hot" markets for RealtyTimes.com (http://realtytimes.com/rtpages/manthonycarr.htm) for the last year and I'm seeing very healthy markets across the country in state after state.

The strongest market in the country is nearly any county in Texas. As far as comeback markets, where ever the foreclosures hit the hardest is where you'll see the biggest come back. Prince William County, Virginia (outside Washington, D.C.), many markets in the state of Florida, Los Angeles, Las Vegas, all are in the middle of a recovery.

Now, recovery doesn't immediately mean increasing prices. So when I refer to a "recovering" market, I'm looking more at pending sales; list to sold price; the level and direction of seller subsidies; and sustainability of the market, such as job growth and the housing inventory.

When inventory begins to drop, with pending sales moving upward - that's the beginning stages of a recovering market. That's what's happening all over Northern Virginia, for instance, in the shadow of the White House. In Fairfax County over the last month, pending sales have jumped above last December's levels by more than 50%; sales are up in the 30% range and inventory has dropped by about 35%. This has been happening for most of the year (2008).

Does the mainline media pick up on it? Of course, not, because they think a recovering market means one thing -- prices. Unfortunately, by the time you put in a contract on a home when prices are moving up - your chance for a great deal have already disappeared. Most likely, you'll pay at or above asking price and must bring your own money to the table without the benefit of seller closing costs to help you keep your own cash for redecorating, fix ups, etc.

I recently competed on a foreclosure property in Springfield, Virginia against four other investors. My buyer won, only because we came in closer to asking price more than anyone else and asked for no closing costs at all. We got a good deal, as the houses are selling for more than $100,000 more than what we pulled in on the property -- of course, it needs fixing up.

So as you look around for that "great deal," look at the underlying numbers that reveal the bottom of the market - not the sales price which tells you nothing more than the fact that the bottom's already hit.

NEWS ALERT: Fixed-Rate Mortgage @ 4.75%

Hey Folks – I don’t normally send emails out to my whole database, but today’s news is unprecedented from the mortgage field. You can refinance your mortgage on a FIXED RATE 30- or 15-year mortgage at 4.75%. For most mortgage holders, this could save you thousands of dollars per year.

I just wanted to pass this on to you and for you to do whatever you want with the information.

To calculate your savings, you can visit http://www.mortgagecalculator.org/. If you need a loan officer I can connect you with someone at our sister company Weichert Financial Services.

That Bounce Sound Was the Bottom of the Market

I met up with a potential buyer last night at a well-priced listing that is seller owned and completely fixed up inside. She was worried the price was too high, we hadn’t hit bottom yet, things could get worse, etc., etc.

She was not unlike many buyers out there in markets across the country that have already started to show signs of recovery. In Northern Virginia – the bottom was hit months ago. It’s a challenge of Myth vs. Reality.

(See this piece from Mortgage News Daily on foreclosures dropping: http://www.mortgagenewsdaily.com/12112008_realtytrac_foreclosures.asp)

For instance, in Fairfax County (just a few miles from Washington, D.C.), the inventory is down 23% while pending sales are up a whopping 60% over the last 30 days. In addition, average prices have leveled off for months now at pre-2004 levels and starting to rebound.

Buyers are now competing on foreclosures with multiple offers and escalating their offers over list price.

Prices are still thousands higher than they were in 2002 and previous. The good news for homeowners who want to move up is that if they purchased before 2002, more than likely, they can sell for a profit and move up for a lot less than they could have just a couple years ago.

The concept that “My house has lost money” is only important when you’re selling. What the consumer should look at is the purchase price vs. the sales price – not the height of the market value vs. today’s value. If you bought for $275,000 and sell at $375,000 – there’s $100,000 in profit – regardless of the fact that your house swelled in value to $450,000 three years ago. Such a seller has NOT lost $75,000, instead, he’s profited $100,000. In addition, he’ll be moving into a good deal in today’s housing and financing market.

FW: Fuel Assistance Program Extended until December 1

Hello Friends – If you or anyone you know needs assistance this winter with your heating fuel, please see the program below. My wife sent this to me and I wanted to pass this along. There is an online screening process for applicants to complete. Note the deadline – December 1.

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From: DFS PIO [mailto:DFSPIO@fairfaxcounty.gov]
Sent: Monday, November 17, 2008 12:05 PM
To: DFS PIO
Subject: Fuel Assistance Program Extended until December 1

The application deadline for the federally funded Fuel Assistance program has been extended until December 1. The original application deadline had been set for Friday, November 14.

The Fuel Assistance program helps eligible low-income households with the costs of heating their homes.

Applications are also available on the Web from the Virginia Department of Social Services at www.dss.virginia.gov.

FairfaxCounty residents who wish to apply are encouraged to call the Department of Family Services’ energy assistance phone line at 703-324-7604 (TTY: 703-222-9452) or visit any of the department’s four offices:

• Fairfax - PenninoBuilding, 12011 Government Center Parkway
  703-324-7500, TTY 703-222-9452


• Falls Church - 6245 Leesburg Pike (Route 7), Falls Church
  703-533-5300, TTY 703-533-5316


• Reston - LakeAnneOfficeBuilding, 11484 WashingtonPlaza West, Reston
  703-787-4900, TTY 703-707-9346


• Richmond Highway/Alexandria - SouthCountyCenter, 8350 Richmond Hwy (Route 1)
  703-704-6353, TTY 703-799-3435

The Department of Family Services offices listed above are open from 8 a.m. to 4:30 p.m., Monday–Friday.

D.C. Area Housing Market Booming In Face of Struggling Markets Nationwide

What makes the Washington, D.C. market different than the rest of the country? The job market within the market. While other cities brag about being the headquarters of Fortune 500 companies, we have something none of them will ever have – the Capital City of the United States. I like the way one colleague puts it when explaining to agents from other states: “When you can put the Pentagon, Congress and the White House in your backyard, then you’ll have a housing market like ours.”

It’s been an interesting week on Wall Street and on Pennsylvania Avenue, leaving Main Street wondering what will happen with the housing market. When you look at our numbers around the Washington Monument, and see that the job growth here has moved upward and heating up even more, it doesn’t take a rocket scientist (or political scientist) to see that the inventory is dropping, prices are starting to level and move upward, and buyers are writing contracts at a triple digit rate more than last year.

If you’re looking to move up, this is the year to take advantage of level prices so you can move up without busting your personal budget. In addition, with FHA financing requiring a minimal down payment, first-time buyers are creating a feeding frenzy in the entry-level market in all property types. We’re seeing more parents help their kids buy a house now before they are priced out of the market. Renters are getting out of supporting the landlord and beginning to build their own equity and personal wealth.

So what? What does this mean to you? Real estate is local. Despite job challenges and foreclosures across the country, homebuyers and sellers must make a decision based on the local scene. The number of foreclosures in the area is declining month after month AND they are drawing multiple offers. Traditional sales of homes priced right and in good condition still make up the majority of the market. Is now the time for you to sell or buy? Waiting too long may cause you to say in the future: “You know, I could have …”