I was at lunch the other day with some real estate agents and lenders from around the Northern Virginia area. Unfortunately, I was the only Re/Max agent in the restaurant but I can hold my own ground with these middle aged women. Anyhow, we all got started on the topic of the current market situation. Somehow by the grace of God we all agreed that finally, it’s a buyer’s market out there. Surprisingly, no one had anything to say when the topic was brought up. Usually some smart ass will go on a rant about all his/her experiences while the rest of us realize this is our chance to ignore them and dive into our food.

So why do we think it’s a buyer’s market? For the past few years the quickly increasing prices kept many first-time home buyers out of the housing market. However, now those rising prices have started a downward spiral. With the interest rates hovering at relatively low levels, it only makes sense to become a homeowner.

Now don’t go out and try to buy a home if you don’t have a secure job and good credit. The lenders are going to be stricter with income and credit requirements. Take it from my friend at Bank of America. He said that they’re not pushing everyone away, it’s just that they have to start being realistic with who they give the loans to.

You want stats? Here they come. The U.S. median home price was $201,000 in January which is down 4.6% from last January in 2007. The home-price index for the fourth quarter was down 8.9% from a year earlier which was the biggest drop in 20 years. There is a 10-month supply of existing homes right now.

An approach that you might want to take when buying right now is K.I.S.S. This means keep it smart and simple. To sum it up, you’re investing into something big so buy cheaper. Do your research before starting your home search. You can also call me at 888-998-9455 and I’ll explain the home buying process to you and the steps you need to take fully understand everything.

Here’s an insider tip: you have all heard it before, but now more than ever, LOCATION is crucial. You want to make sure that you’re in a good school district if you want to start a family or if you want to sell your home in the future. Also compare your estimated monthly costs for the mortgage, taxes and other expenses with the cost of renting a similar place nearby. If you can rent virtually the same house for a much lower cost, the seller is asking too much.

So if you have been waiting for the right time to buy it’s right in front of your face. Do your research, contact a HomeZill agent, and we’ll take care of you.

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Finally! The long awaited loan limits from the Federal Housing Administration has arrived! The new FHA limit for the Northern Virginia and Washington DC Metro area is now $729,750. This is HUGE! With the credit markets continuing to tighten and second mortgage lenders scaling back, we will now have a vehicle for those borrower’s who don’t have 10%-15%-20% down…plus the rates are better than conventional mortgages!

My eyes opened even wider last night when we learned that the new Fannie Mae/Freddie Mac ‘jumbo-conforming’ for the DC Metro real estate region was going to mirror the new FHA limit. You got it, the new temporary Fannie/Freddie second tier loan limit in the DC region is now $729,750! This number was completely out of left field, and against everything we had heard from our contacts at Fannie Mae…but who are we to argue!? Here are the guidelines that you need to know:

·Financing for owner occupied, second home and investment properties available

· Minimum down payment requirement (owner occupied) for the new “jumbo conforming” is going to be 15% (note: the guidelines state 10%, but since we are in a “declining market area” our max financing is cut by 5%)

· Credit score requirement is 700 for over 80% LTV and 660 for under 80% LTV

· Max seller concessions is 3%

Rates will be slightly higher than conforming under this new jumbo-conforming limit, but lower than current jumbo. Only three loan types will be available, 30 year fixed, 15 year fixed, and 5/1 ARM…they will be available on:

30 Year Fixed (avail 4/1/08)

5 Year Fixed (avail 4/1/08)

5/1 ARM (avail 5/1/08)

As this information is released to the public I certainly think that this will generate some excitement. If rates cooperate, thousands of buyers could really take advantage of these new offerings. While useful for some borrowers, the higher conforming limits pale in comparison to how FHA is currently structured. As it sits currently (which is subject to change), FHA is going to be far more beneficial for us than Fanniem Mae/Freddie Mac…here’s why:

1. Even with a loan amount of $729,750, borrowers still only need a minimum of a 3% down payment (FHA does not have a ‘declining market policy’)

2. Mortgage insurance payments are lower with FHA (because of the credit crisis second mortgages are become nearly extinct at higher loan-to-values)

3. Rates are significantly more attractive with FHA

4. No credit score requirement

All in all, this is all very promising, although rates have continued to go up this week, I am still very confident that the movement higher is temporary. Should you have ANY questions about these changes for the Northern Virginia or DC Metro real estate areas, I’m more than happy to answer them. I’ll post any new guideline changes that may come about, but as you may recall the current FHA guideline only requires a 3% down payment, but in many cases with a Nehemiah-type program, the down payment can come from the seller. You can look up the new FHA loan amounts in other regions of the country here.

Todd Murdock | Senior Mortgage Advisor | HomeFirst Mortgage Corp | 703.549.3400

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Re - Grand Opening this weekend March 15-16th at The Residences at Liberty Center condos in Arlington, VA. Liberty Center is reopening their doors after putting their sales on hiatus in order to settle the previous units under contract (most likely to keep any previous buyers from backing out of a deal if prices were reduced). Hopefully they’ll come out with competitive prices to give the Phoenix and Hawthorne a run for their money! The convenience of the Ballston Metro Station and Ballston Common Mall is just within a short walking distance.  The interior of the building and the finishes in the units are very nice, but the prices are nothing special.  You’re paying for the location and convenience of living in Arlington.

The units are your typical Arlington prices:

• 1 bedroom 695 sq. ft.
  • $360,900-$423,900

• 1 bedroom + den 775 sq. ft.
  • $425,900-$473,900

• 1 bedroom + den 879 sq. ft.
  • $$463,900-$505,900

• 2 bedroom 2 bath 1,183 sq. ft.
  • $584,900-$632,900

•  2 bedroom 2 bath 1,147 sq. ft.
  • $578,900-$720,900

• 2 bedroom 2 bath + den 1,254 sq. ft.
  • $614,900-$682,900

• 2 bedroom 2 bath + den 1,022 sq. ft.
  • $492,900-$588,900

Condo fee ranges from $349-$591 and includes water, 24 hour front desk service, fitness center, roof top terrace and pool, party room, and media center.
Condo features include: Spacious, light-filled living areas, Floor-to-ceiling windows, Hardwood floors, Gourmet kitchens composed of granite, maple and stainless steel, Elegant baths with 12″ x 12″ ceramic tile and granite vanities, Separate glass-enclosed showers, Soaking tubs in select condos, and Pre-wired for Verizon FiOS Internet and TV. The amenities include: First-floor retail with Marvelous Market and Bruegger’s Bagels, Rooftop pool and terrace with panoramic views of DC, Residents’ clubroom, plush seating, plasma-screen TV and fireplace, Rooftop fitness center with downtown views and state-of-the-art equipment, 24-hour staffed front desk and controlled-access parking.

If you have any questions or would like to schedule a showing at the Residences at Liberty Center condos in Arlington, Virginia, call 1-888-998-9455 and mention the HomeZill Blog to receive additional incentives when buying a new condo in Arlington VA.

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These new loft condominiums will blow you away. They’re Kenyon Square condos in Washington, D.C. Just footsteps away from the Columbia Heights Metro. The convenient first-floor retail includes Starbucks, BB&T, Georgetown Valet, Radiance MedSpa, d’vines fine wine & beer, Royal Blue Mediterranean Bistro, FedEx Kinko’s and The Heights, a top-notch restaurant from the owners of Logan Tavern. Unit features include: Open floor plans by award-winning architect, Gas cooking, Stainless steel appliances including large capacity refrigerator with bottom-load freezer, Microwave, Full-sized, stacked washer dryer, Walk-in closets, 2-panel contemporary doors with lever-set hardware, Minimum 9′ ceilings in living areas, “Volume lofts” with nearly 20-foot ceilings,Hardwood floor in living room, dining rooms, kitchen, and foyer, Ceramic tiled bathrooms, Berber carpet in bedrooms, lofts, and dens, The latest technology for structured wiring and high-speed internet, Cable, telephone, and internet outlets in every room, and Full and French balconies and terraces. In addition, the exciting new DC USA retail and entertainment center, to be located adjacent to the Columbia Heights Metro Station, will feature Target, Best Buy, Washington Sports Club, Bed Bath & Beyond, and many other retailers.

• One Bedroom:
  • 616 – 904 sq. ft.
  • $354,000 - $498, 900
• One Bedroom with Den:
  • 828 sq. ft.
  • $465,000 - $480,500
• Two Bedroom / Two Bath:
  • 982 to 1,181 sq. ft.
  • $549,500 to $689,900
• Two Bedroom / Two Bath with Den:
  • 1129 - 1,243 sq. ft.
  • $661,900 - $709,000
• Two-Level Loft Units:
  • 1,111 to 1,226 sq. ft.
  • $616,500 to $646,000

To schedule an appointment at Kenyon Square, please contact us at 1-888-998-9455 or at info@homezill.com, and ask us about our additional home buyer rebate of 2% cash back if you choose to purchase at Kenyon Square in Washington, D.C.

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January’s existing home sales rate was 4.9 million - its lowest level in 10 years and down 23% from a year ago. However, this has been the theme since September, which could indicate a bottom. Along those same lines, January sprouted 57% more foreclosures than the year before, which is better than December’s 97% increase year-over-year. The bleeding still has not come to a halt, but we can see that it might be stabilizing.

This is based on the following rationale:

1. Home prices have decreased 4.6% in the last year.
2. There is a 10 month inventory of homes for sale.
3. Interest rates are lower - a 30-year conventional loan was at 5.76% compared to 6.22% last January.
4. Many buyers are waiting for the President’s Economic Stimulus Plan to take effect, which will increase limits for FHA loans, and allow Freddie Mac to repurchase jumbo loans.

What all this means: If price declines were to follow sales declines, it would compare to the 24% decline experienced during the Great Depression of 1929. However, this is unlikely to happen since most homeowners will take their homes off the market before losing their arses. Furthermore, mortgage rates are around 6%, only half the rate they were in the 80’s. This allows mortgage holders to refinance, therefore reducing the potential of foreclosure.

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Yet another up and down week for us, yet I still strongly believe that rates will fall back well into the 5’s in the near future. The issue that has been plaguing us for a few weeks is that US debt just isn’t popular right now, and thus, there has been billions of dollars “jumping ship,” which is driving rates up. Rates will rise until they get to the point that they’re once again a ‘good deal’ (I believe that we’re at that point) at which time buyers will come back into the market…that will draw rates back down. It’s quite possible that the spring market will coincide nicely with rates falling. As always, time will tell.

We’ve gotten some news from Fannie Mae in regards to the ‘new conforming loan limits.’ Apparently it has been determined that the real estate in Northern Virginia and Washington DC area’s median home price is $474,000 (more than expected), if we add 25% to that, we have a new conforming loan size of $592,500. That’s the good news, the not-so good news is that instead of just raising the max conforming loan amount, they are simply creating a second tier for loan sizes between the current $417,000, and the new $592,500. This second tier will have slightly higher rates than current conforming rates, but will apparently be lower than current jumbo mortgages. We haven’t gotten any new news on the latest FHA loan limits, but I think that once again FHA will prove to also be a great option for borrowers lacking a substantial down payment.

Todd Murdock | Senior Mortgage Advisor | HomeFirst Mortgage Corp | 703.549.3400

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