Sales Report for Northern Virginia Real Estate
Released February 11, 2008
info from Northern Virginia Association of Realtors^®

The rising number of foreclosures and short sales over the past year have dramatically affected the supply of homes on the market for Northern Virginia real estate. This has in turn, brought the housing demand down (”economics 101″), along with NOVA area home values. The average home stayed on the market 21 days longer in Jan ‘08 versus Jan ‘07. On the other hand, the recent increase in conforming loan and FHA loan limits should give a boost the the DC Metro area real estate market. We should see a good amount of activity over the next few months into Spring and Summer as home buyer confidence rises. The stars are aligned for a buyer’s market in Northern Virginia!

Dr. Stephen Fuller of George Mason University’s Center for Regional Analysis (CRA) located in Fairfax VA, noted in a report in Feb ‘08 that the regional job picture is very strong. More than 20,000 new jobs are projected for Northern Virginia each year through 2011. The report stated that of the 15 largest U.S. job markets, the D.C. Metro area showed the lowest levels of unemployment: 3% - compared with a national unemployment average of 4.8%.

*Data from the Metropolitan Regional Information System, Inc (MRIS). Northern Virginia real estate figures include data collected from Fairfax County and Arlington County, and the cities of Alexandria VA, Falls Church VA, Fairfax VA, and the towns of Vienna VA, Herndon VA and Clifton VA. (Sales figures do not include most new home construction sales and For Sale By Owner sales since the data was not entered in the MLS. Only Northern VA Realtors can access the MLS to enter the sales data)

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Since record keeping began in 1963, sales of newly built homes dropped at the steepest pace throughout the country over the course of 2007. New home sales numbers totaled 774,000, which was 26% less than 2006 new home sales according to the Commerce Department. The 9.6-month supply of new home inventory for sale is a record. Since the July 2005 peak, the sales of new construction homes have plummeted 57%, and permits for construction have dropped nearly 50%. New home builders are rapidly cutting production which will help reduce the housing supply throughout the nation.

The DC Metro area is one of top hot spots for new home builders because of the high paying salaries and strong job growth. So what does this mean for home buyers? Well, for starters, the glut of new construction homes in Northern Virginia and Washington DC are breaking builders’ banks. It is a prime opportunity for savvy home buyers to scoop up good real estate at highly incentivized (apparently not a word according to spell checker) prices! Deals that were unheard of for the past 5 years (such as 6% home buyer incentives and 2 BR+den new condos in Arlington VA for $339k) are now available in highly desirable areas of Northern Virginia real estate. Many people remain pessimistic about the current DC real estate market, but the way I see it… how does the saying go- “one man’s loss is another man’s gain”… builders are hurting, so shoot ‘em while their wounded! (sorry builders). Just like foreclosures- if the seller is distressed, the buyer will be blessed (I made that one up ;).

Right now, I am informing my buyer clients that it is a great time to look for new construction homes and foreclosure homes (I’m a Northern Virginia & DC Realtor in case you didn’t know). With the builders’ incentives and highly motivated bank foreclosures, I’ve seen some pretty good deals recently that a lot of resale homes cannot compete with. Unless a seller purchased their home prior to 2003, they most likely won’t be selling their home for a profit (after selling costs) and will have less room to negotiate. That being said, if you are looking to buy a home and would like a professional to help you locate some good new home construction or foreclosure deals, give us a call at 1-888-998-ZILL (9455) or sign up for our free foreclosure list at the top of the page.

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If you’re one of those people doing their home search right now, then you have probably heard that the housing market will continue to downward spiral. Of course this means opportunities for buyers. However, waiting for the market to bottom out (which no one can predict) may not be the best idea. Here are the top 5 reasons to buy right now and the top 5 reasons you may want to hold off.

Some markets in Northern Virginia have not hit their bottom yet, but they are not too far off. The Arlington, VA market hasn’t been affected as much as most areas in the DC Metro region. The pace of sales has slowed down, but the prices have held firm or in a few cases gone up. If you’re waiting for the Northern Virginia real estate market to hit absolute bottom, this puts you at risk in missing it and getting caught up in the market on the upswing. Plus, for some first time home buyers, owning a home just makes more sense from an economic and financial standpoint.

Homes that are situated in a great school district like Fairfax County and Loudoun County, are often not affected as much when the market goes south. The times that they depreciate, these neighborhoods are usually the fastest to recover.

Sometimes buyers get so caught up in the sales price that they miss out on a good deal. You have to ask yourself if it’s worth it to wait a few weeks to see if the home goes down $10K-$20K. It’s a gamble you’re going to have to take. Or is it? For those first time home buyers, look at your mortgage payment when you’re debating whether to pay an extra $10K for a home. Assuming a buyer pays $300,000 rather than $310,000 on a 5.7%, 30-year loan with $30,000 down, they’d be paying $1,575 a month rather than $1,634. Not so bad is it?

Now of course there are those people who bought their home a few years back and if they were to sell their home now, they would end up losing out. These people are encouraged to stay with their home and not think about buying, unless of course you can afford it.

5 REASONS TO BUY

1. Prices in the neighborhood you are interested in are relatively stable. Either they are holding their own or increasing, or the pace of decline is slowing significantly. If you have to move and don’t like apartments, the small penalty you pay for missing the bottom may not mean much.

2. You plan to stay in the home for more than five years. If you can stick it out that long before selling, economists say you’ll probably ride out any downturn and come out ahead on price

3. Your rent rivals a mortgage payment. If you can afford to buy, it can give you one bonus that renting can’t: mortgage-interest deduction on your taxes.

4. You’ve found the right house in the right area for you. The schools are great. You love the area and know it would be hard to find another house like the one you have your eye on. In a better market, you would most likely have much more competition for that home.

5. You’ve built equity in your house and are moving to a place where homes are cheaper. In your new market, your money will go a lot further.

5 REASONS TO HOLD YOUR HORSES

1. You’ve lived in your house less than two years. Chances are you haven’t had enough time to accumulate equity in your home. Indeed, you may have negative equity, if you live in many areas such as California, Florida, Arizona or Nevada.

2. Your job security is uncertain. If your company or business is in distress, it’s probably better to stay put until the smoke clears.

3. You don’t plan to stay in your next house at least five years. While it’s not important to buy at the exact bottom of the market, it is important to stay long enough to ride it out completely.

4. You don’t have good credit or a decent down payment. Do you have a job and income you can document? As a result of the subprime lending crisis, lenders are much more careful about whom they’re giving their money to.

5. You have an existing home to sell in a neighborhood where prices are dropping precipitously or where the number of foreclosures is spiking. In this climate, you’re probably better off waiting out the storm.

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As most of you know from the recent real estate news, new home builders are having a hard time selling homes in the DC Metro area. Therefore, more homes and condos in Northern Virginia and Washington DC are available to purchase than one would expect. Is this a good time to buy? It depends on your situation. If you plan on buying a home because of the recent interest rate cuts, make sure you plan to living there for at least 3 - 5 years. This way you can weather the times if there is any downturn in the market.

If you plan on buying a new home, then turning around to flip it for a profit in the next year or two - I would say that now is NOT the time for you to buy. The best deals from what I’ve seen lately in Northern Virginia and DC are new construction homes and foreclosures. I have typically seen the largest price drops in these types of homes recently. Not to say you can’t find a great deal on a resale home, but sellers who have bought within the last 3 years (and did 100% financing) are many times “upside down” and don’t have much room for negotiations.

Many first time home buyers are unaware that the sales agents at these new home communities work FOR the builder. What does this mean? Well, it means that they are on the builder’s side and are looking out for the builder’s best interest. The reason I bring this point up is because you should always visit a new home community with representation from a real estate agent. Your agent will look out for your best interest, including pointing out design flaws, giving resale pointers, justifying comps, factoring in incentives, assisting with contingencies, making sure you are protected and negotiate on your terms. It doesn’t cost you any more to use an agent and the price of the home stays the same, so why wouldn’t you utilize the expertise of a real estate professional?

Click the link below to watch the video from Kiplinger. (heads up, there is a 10 second commercial before the actual video)

Buy a Newly Built Home Now?

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A unique high rise condo in Fairfax, VA known as the Elan at East Market. The luxury of this condo is unlike anything you’ve seen in the area. Filled with mostly garden-style- 4 story condominiums in Fairfax, this Northern Virginia high rise condo is in a league of its own. You have convenient access to Rt. 66, Rt. 28, Rt 29, Rt. 50 and Fairfax County Parkway. The Elan is located right in the heart of the hottest area of Fairfax VA- smack dab in between Fair Oaks Mall, Fairfax Corner, Fairfax Towne Center, Fair Lakes and many fine restaurants like PF Changs, Rio Grande, Coastal Flats, Ruth Chris, Cheesecake Factory and many more are right around the corner.

With the convenience of an on-site gym, state-of-the-art business center, underground garage parking, two-level cascading pool and designer party room, you have everything you need. Prices start in the mid $200k’s for 1 bedroom condos with 675 - 736 sqft.  Prices for the 2 bedroom condos start in the lower 400’s with 1078 - 1201 sqft. Though the Elan is definitely a unique, urban-type condominium in an area of Northern Virginia that isn’t accustomed to this type of product, it shouldn’t come with the Arlington price tag. The 1 BR’s are priced ok, but the 2 BR’s are overpriced by about 50k in my opinion. They would be a good buy selling around the $350k price range. I’m betting on the developer coming to their senses soon and dropping the price to fair market Fairfax value. Otherwise they will find themselves in a bind if they keep the current price tag.

An underground garage parking space is included in the price. Units feature: 9-10 ft ceilings, crown moulding in living/dining room, gas fireplaces available, balconies, floor-to-ceiling windows, track lighting, GE appliances, granite counters, maple cabinetry, ceramic tile in kitchen and foyer, and separate whirlpool tub and shower in master bath. Some of the loft units have higher ceilings with exposed duct work for the city-living urban appeal.

If you would like to visit the Elan condos in Fairfax, Virginia, be sure to contact us at 1-888-998-9455 or at info@homezill.com to receive a 2% cash back home buyer rebate at the Elan or any other new Fairfax VA homes.

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Prime Virginia metro real estate, at a location that is most desirable sits the 16-story Midtown Alexandria Station condos in Alexandria, VA. You will step outside and literally be located right at the Huntington Station Metro on the yellow line. You’ll be stunned from the interior design quality when you enter into the building lobby. The units feature: Designer kitchens with Italian cabinetry, granite countertops, stainless steel GE Profile™ appliances, designer bathrooms with oversized tubs and stylish fixtures, Berber carpeting, expansive windows filling your home with natural light, and amazing city, river and sunset views. Many condos also feature hardwood floors, balconies, kitchen islands and separate bathroom showers. Midtown provides convenient access to I-495, I-395, I-95, Reagan National Airport, Hoffman Center, Beacon Center, Penn Daw Plaza, Old Town Alexandria, and downtown Washington DC.

Amenities include: Swimming pool with Jacuzzi & waterfall, Sundeck, Outdoor bar & grill area, Clubroom with outdoor terrace and amazing city views, Fitness center & massage room, Cyber café with wireless Internet, Bike storage, Concierge services by VIPdesk.com, Controlled access entry and 24-hr front desk.

Now you’re thinking…”all this, and a condo location in front of a metro has got to come with a hefty price tag”- eh? Wrong! Check out these prices after the $100k price drops…

• Studio–571 sqft–$189,900–condo fee $221
• 1 Bedroom–707 sqft–$247,900–condo fee $287
• 1 Bedroom+den–906 sqft–$289,900–condo fee $354
• 2 Bedroom–1,172 sqft–$394,900–condo fee $420
• 2 Bedroom+den–1,436 sqft–$456,900–condo fee $420

There are several floor plans to choose from with different sizes and prices, these are just a few of the available condos for sale. The condo fee includes: water, sewer, master insurance, building maintenance, trash & snow removal, parking maintenance, and amenities.

If you have any questions or would like to schedule a showing at Midtown in Alexandria, Virginia, call 1-888-998-9455 or info@homezill.com and mention the HomeZill Blog to receive an additional home buyer incentive when buying a new home in Alexandria VA.

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