What To Do If You Can't Pay Your Mortgage

Almost 280,000 Americans lost their homes through foreclosure last year. But that's not the surprising part. This is: Half of them never even talked to their
lenders.

While the number of homeowners with past-due loans is still low by historical standards at 4.4%, it's expected to rise this year and next because almost 5 million American families will see their adjustable-rate mortgages reset to higher interest rates. Families that are already turning their pockets inside out to pay more than $3 a gallon for gas and higher health care costs may have to make painful choices in order to keep their homes.

Now is the time to dig out your mortgage documents and figure out when, by how much, and how often your payments can rise. If you see trouble ahead, now is the time to consider refinancing, or reaching out to a financial counselor who can help you evaluate your options. Most important, call your lender, right now, if you're about to miss a payment.

Your situation, and that of thousands of other folks like you, is serious. You are, indeed, in dire straits. But all hope is not lost, at least not yet.

You should contact your lenders right away. If you are like most folks, you aren't answering the lenders' mail or returning their phone calls. Most think they don't need to speak with their lenders about their situations, or think they can take care of their problems, if they recognize them as such, without involving the lender.

But a large percentage also believe their lenders can't or won't be any help, or are simply too embarrassed or scared to bring them up. But all these people are wrong -- on all counts.

If you are an irresponsible individual who can but won't make your house payments in a timely manner, lenders have nothing to offer but a ride to the courthouse steps. But if you have been a good paying customer, have a good reason why you fell behind, and look like you'll be able to get back on your feet, lenders can be plenty of help. The key word is forbearance.

Here's the thing: Lenders don't want your house, they want you. According to a report I read recently, the costs of foreclosure are enormous. On average, the total cost, including lost interest during the delinquency, foreclosure costs and disposition of the property, ran nearly $59,000, and the situation took about 18 months to resolve. Worse, these figures were five years old. It is probably more expensive now and takes even longer.

At the same time, keeping people in their homes has been found to be far more productive. Indeed, roughly 90% of the loans that are reworked by lenders are likely to "cure" within 18 months. And those borrowers who seek help from their lenders earlier in the process are far more likely to hang on to their places after
riding out their financial turbulence than those who seek help later.

What's more, research shows that the factors originally used by underwriters in trying to predict the likelihood would-be borrowers will default -- credit, collateral and capital -- are not nearly as useful when deciding whether to "work" with customers who are already on the books but are having a tough time meeting their obligations.

Lenders have several workout options up their sleeves:
· Partial reinstatement. Under this plan, the borrower would agree to begin making regular payments and make up what is owed in, say, 12 monthly installments over the next year.
· Short-term forbearance. Here, the lender will suspend your payments for, say, three months or reduce your payment for six months, and then you'd make up the difference in some kind of repayment plan as described above.
· Long-term forbearance. Payments might be suspended for anywhere from four to 12 months, with a corresponding repay plan to follow.
· Loan modification. This would be a permanent change in one or more of your loan's original terms. The rate might be cut, the payment period extended or both so that the payment once again becomes affordable.

So my advice is to get on the horn right now with your lender. Make sure you talk to the workout department, though, not the collections folks. Though many lenders are training their repo staff to spot people who need a break and hand them off to the right people, most are bill collectors, short and simple. If the person you speak with has no idea what you are talking about, ask to be transferred to the chairman's or the president's office. You can bet they'll know whom to transfer you to.

You don't need anybody to speak for you, either. So stay away from the growing group of charlatans who are preying on financially distressed homeowners by offering -- for a fee, of course -- to act as a go-between between you and your lender. They don't have any more of an inside track than you do.

If you honestly feel you need to have someone holding your hand, contact a local credit or homeownership counseling agency. These nonprofits don't charge a thing. In fact, in some cases, lenders are paying them to go out into their communities to persuade troubled borrowers to contact their lenders.
The Department of Housing and Urban Development has a list of government-sanctioned counselors on its Web site, www.hud.gov. Also try the National Foundation of Credit Counselors, www.nfcc.org, or the Homeownership Preservation Foundation, www.995hope.org (888-995-HOPE).

Even if you and your lender can't see any way to save your home, there are still options available that are less painful than foreclosure -- for both parties. You can list your home with a Realtor. There are plenty of Realtors that are skilled in a short sale, or a quick sale. If selling is too burdensome, you can simply hand over the keys to the lender by voluntarily transferring the title back to it in one of several different ways.

In a deed-in-lieu of foreclosure situation, you would forego continued ownership in exchange for cancellation of the remaining debt. In a short sale, also known as a short payoff or pre-foreclosure sale, the lender would allow you to sell the place at less than what is owed, and you and the lender would agree to an unsecured repayment plan for the difference. Anything is better than doing nothing and ruining your credit. Unless you have a lot of money, credit is the only thing that enables you to chase the American Dream. I learned that a long time ago from my father.

Rob AlleyREALTOR® - Roy Wheeler Realty Co.President - Virginia Tech Alumni Association - Charlottesville ChapterBoy Scouts of America - District Advancement Chairman - Monticello District434-220-7630 (office)http://www.robsellscharlottesville.com/

What To Do If You Can't Pay Your Mortgage

Almost 280,000 Americans lost their homes through foreclosure last year. But that's not the surprising part. This is: Half of them never even talked to their
lenders.

While the number of homeowners with past-due loans is still low by historical standards at 4.4%, it's expected to rise this year and next because almost 5 million American families will see their adjustable-rate mortgages reset to higher interest rates. Families that are already turning their pockets inside out to pay more than $3 a gallon for gas and higher health care costs may have to make painful choices in order to keep their homes.

Now is the time to dig out your mortgage documents and figure out when, by how much, and how often your payments can rise. If you see trouble ahead, now is the time to consider refinancing, or reaching out to a financial counselor who can help you evaluate your options. Most important, call your lender, right now, if you're about to miss a payment.

Your situation, and that of thousands of other folks like you, is serious. You are, indeed, in dire straits. But all hope is not lost, at least not yet.

You should contact your lenders right away. If you are like most folks, you aren't answering the lenders' mail or returning their phone calls. Most think they don't need to speak with their lenders about their situations, or think they can take care of their problems, if they recognize them as such, without involving the lender.

But a large percentage also believe their lenders can't or won't be any help, or are simply too embarrassed or scared to bring them up. But all these people are wrong -- on all counts.

If you are an irresponsible individual who can but won't make your house payments in a timely manner, lenders have nothing to offer but a ride to the courthouse steps. But if you have been a good paying customer, have a good reason why you fell behind, and look like you'll be able to get back on your feet, lenders can be plenty of help. The key word is forbearance.

Here's the thing: Lenders don't want your house, they want you. According to a report I read recently, the costs of foreclosure are enormous. On average, the total cost, including lost interest during the delinquency, foreclosure costs and disposition of the property, ran nearly $59,000, and the situation took about 18 months to resolve. Worse, these figures were five years old. It is probably more expensive now and takes even longer.

At the same time, keeping people in their homes has been found to be far more productive. Indeed, roughly 90% of the loans that are reworked by lenders are likely to "cure" within 18 months. And those borrowers who seek help from their lenders earlier in the process are far more likely to hang on to their places after
riding out their financial turbulence than those who seek help later.

What's more, research shows that the factors originally used by underwriters in trying to predict the likelihood would-be borrowers will default -- credit, collateral and capital -- are not nearly as useful when deciding whether to "work" with customers who are already on the books but are having a tough time meeting their obligations.

Lenders have several workout options up their sleeves:
· Partial reinstatement. Under this plan, the borrower would agree to begin making regular payments and make up what is owed in, say, 12 monthly installments over the next year.
· Short-term forbearance. Here, the lender will suspend your payments for, say, three months or reduce your payment for six months, and then you'd make up the difference in some kind of repayment plan as described above.
· Long-term forbearance. Payments might be suspended for anywhere from four to 12 months, with a corresponding repay plan to follow.
· Loan modification. This would be a permanent change in one or more of your loan's original terms. The rate might be cut, the payment period extended or both so that the payment once again becomes affordable.

So my advice is to get on the horn right now with your lender. Make sure you talk to the workout department, though, not the collections folks. Though many lenders are training their repo staff to spot people who need a break and hand them off to the right people, most are bill collectors, short and simple. If the person you speak with has no idea what you are talking about, ask to be transferred to the chairman's or the president's office. You can bet they'll know whom to transfer you to.

You don't need anybody to speak for you, either. So stay away from the growing group of charlatans who are preying on financially distressed homeowners by offering -- for a fee, of course -- to act as a go-between between you and your lender. They don't have any more of an inside track than you do.

If you honestly feel you need to have someone holding your hand, contact a local credit or homeownership counseling agency. These nonprofits don't charge a thing. In fact, in some cases, lenders are paying them to go out into their communities to persuade troubled borrowers to contact their lenders.
The Department of Housing and Urban Development has a list of government-sanctioned counselors on its Web site, www.hud.gov. Also try the National Foundation of Credit Counselors, www.nfcc.org, or the Homeownership Preservation Foundation, www.995hope.org (888-995-HOPE).

Even if you and your lender can't see any way to save your home, there are still options available that are less painful than foreclosure -- for both parties. You can list your home with a Realtor. There are plenty of Realtors that are skilled in a short sale, or a quick sale. If selling is too burdensome, you can simply hand over the keys to the lender by voluntarily transferring the title back to it in one of several different ways.

In a deed-in-lieu of foreclosure situation, you would forego continued ownership in exchange for cancellation of the remaining debt. In a short sale, also known as a short payoff or pre-foreclosure sale, the lender would allow you to sell the place at less than what is owed, and you and the lender would agree to an unsecured repayment plan for the difference. Anything is better than doing nothing and ruining your credit. Unless you have a lot of money, credit is the only thing that enables you to chase the American Dream. I learned that a long time ago from my father.

Rob AlleyREALTOR® - Roy Wheeler Realty Co.President - Virginia Tech Alumni Association - Charlottesville ChapterBoy Scouts of America - District Advancement Chairman - Monticello District434-220-7630 (office)http://www.robsellscharlottesville.com/

The Big Bad Market

Ok, It’s Time to Come Out Now

If you don't have a TV, a radio, or a newspaper, you may have missed all of the negative press surrounding the mortgage and housing markets. The severity of the situation has created a mild panic that has paralyzed the consumer. If you are waiting for a "bottom" to the overall crisis, and for all the news to turn positive, don't hold your breath. Typically, where tragedy occurs, opportunity arises. Let me show you why it is "OK to come out now," and why you might be sorry if you wait too long.

Mortgage Meltdown?

The news might have you thinking that no one can get a loan these days. This is far from true. Hindsight has given us a clear picture of the kind of loans that shouldn't be offered again. The loans that have performed more consistently are still abundantly available, and you might be surprised that you can qualify.

Banks like to see strength in at least 2 of the 4 areas:
Credit Score
Sufficient verifiable income for the payment amount
Equity in the property or down payment
Liquid assets (money in the bank, stock market, IRA's, 401k's, etc...)

The items that will make your loan more difficult to obtain:
Non-Owner Occupied (investment property)
Stated or No Income (meaning you can't prove it with W2's or Tax Returns)

Bottom Line: If you can legitimately afford to make a regular house payment, there's a very high chance that this can be proven to a lender, who will in turn be happy to give you an excellent loan.

To make things better, interest rates are historically low. At the very lowest point in mortgage rate history, a 30 year fixed conforming loan danced around the 5.0% range. In the last several weeks, it has dropped to 5.625%. There is even further impetus to act on this information. Even if prices decline another 10% due to the market panic, there are sellers out there right now selling for 20% under current appraised value. So you might find a house for $160,000 today that will end up being worth $180,000 when the market bottoms out - a paradox, but true. This also means that your value is likely to be at it's highest as far as refinancing. Remember that EQUITY is one of the positive factors banks consider.

If you think you might be in your current home for more than a few years, have an adjustable rate mortgage, or have an interest rate that's over 6% - or - if you are a potential home-buyer, it is OK to come out now. Doing so could save you lots of money.

The Pendulum Effect

National average home prices are down significantly. This trend will continue, but consider three things. First, the hardest-hit markets drag down the average depreciation. Second, mid to high priced homes were more inflated than entry level housing. When those homes depreciate, they have farther to fall than a lower priced home. This also brings down the national home price average. Finally, panic can create a knee-jerk reaction among sellers, and market perception can create hesitancy among buyers.

What does this all mean? It's a GREAT time to shop for a moderately priced home. When the market has found a solid bottom and the demand returns, there will be a lot less ambiguity about what a home in your area is really worth. Sellers will be less willing to entertain offers, and selection will decrease.

Recession and Expansion

There are times when the economy is brisk and everyone feels confident about his or her prospects for the future. As a result, they spend more money, eat out more often, and buy more new cars and houses.

Then, for one reason or another, the economy slows down. Companies lay off employees and consumers are more careful about where they spend money, perhaps saving more than usual. As a result, the economy decelerates even further. If it slows enough, we have a recession. During such a time, fewer people are buying homes. Even so, some homeowners find themselves in a situation where they must sell. Families grow beyond the capacity of the home, employees get relocated, and some may even find themselves unable to make their mortgage payment - perhaps because of a layoff in the family.

In the business cycle of real estate, there are buyers' markets and sellers' markets...and some markets in between. It is all based on supply and/or demand.

Supply and Demand - Inventory

During a seller’s market, homes sell quickly and sellers have a lot of pricing power. As a result, prices rise more rapidly than at other times. During a buyer’s market, homes may sit on the market for a while before selling; consequently, sellers become more flexible and may even drop their prices.
The market is determined by supply and demand.

In real estate, the relationship between supply and demand is calculated as "available inventory." At the current sales pace, how long would it take to sell the total number of houses available on the market? That is how the real estate industry measures inventory.

Inventory is measured in weeks and months. Longer inventory times are associated with buyers' markets. Shorter inventory periods are associated with sellers' markets. Some buyers and sellers hope to time their transactions to take advantage of market cycles.

Timing Your Purchase to the Market Cycle

The real estate market does not necessarily move in tandem with the stock market or the economy as a whole. When the economy is doing well, interest rates are generally higher. The result is that fewer people can afford houses. When the economy slows down, interest rates fall. The "affordability index" moves up and more people can afford houses.

As you can see, this cycle does not move "in sync" with the rest of the economy. One problem with attempting to time your purchase to the business cycle is that even experts have problems accurately predicting the future economy. It is also strongly influenced by employment, salary, and consumer outlook for the future. If you could "time the market," that strategy would most benefit first-time buyers. All these factors make it difficult to know, in advance, whether the housing market is going to boom or bust.

Why You Should Not Wait to Purchase a Home

People who already own a home usually need to sell it in order to come up with the down payment for their next home. Even if they don't, they would have to carry the debt and obligations on two homes at the same time. This can create financial hardship, even when you rent out the previous home. There are maintenance costs, renters don't always make their payments on time, the rent may not cover the mortgage and other costs, and sometimes the property may be vacant.

If you are a move-up buyer and want to purchase your next home during a depressed market, you generally have to sell your current home during that same depressed market. If you want to sell during a boom, then you also have to purchase during the same boom - It tends to equal out.

Finally, suppose you are a first-time buyer and wait until the beginning of a boom is near. If you guess wrong, are you going to wait...and wait...and wait...till the next depressed market? If so, you could miss out on loads of depreciation...and that is assuming you guessed right about your market timing? For instance, in 1996 when the home market was struggling, who would have predicted what the next seven years actually produced?

Rob Alley
REALTOR® - Roy Wheeler Realty Co.
President - Virginia Tech Alumni Association - Charlottesville Chapter
Boy Scouts of America - District Advancement Chairman - Monticello District
434-220-7630 (office)
http://www.robsellscharlottesville.com/

The Big Bad Market

Ok, It’s Time to Come Out Now

If you don't have a TV, a radio, or a newspaper, you may have missed all of the negative press surrounding the mortgage and housing markets. The severity of the situation has created a mild panic that has paralyzed the consumer. If you are waiting for a "bottom" to the overall crisis, and for all the news to turn positive, don't hold your breath. Typically, where tragedy occurs, opportunity arises. Let me show you why it is "OK to come out now," and why you might be sorry if you wait too long.

Mortgage Meltdown?

The news might have you thinking that no one can get a loan these days. This is far from true. Hindsight has given us a clear picture of the kind of loans that shouldn't be offered again. The loans that have performed more consistently are still abundantly available, and you might be surprised that you can qualify.

Banks like to see strength in at least 2 of the 4 areas:
Credit Score
Sufficient verifiable income for the payment amount
Equity in the property or down payment
Liquid assets (money in the bank, stock market, IRA's, 401k's, etc...)

The items that will make your loan more difficult to obtain:
Non-Owner Occupied (investment property)
Stated or No Income (meaning you can't prove it with W2's or Tax Returns)

Bottom Line: If you can legitimately afford to make a regular house payment, there's a very high chance that this can be proven to a lender, who will in turn be happy to give you an excellent loan.

To make things better, interest rates are historically low. At the very lowest point in mortgage rate history, a 30 year fixed conforming loan danced around the 5.0% range. In the last several weeks, it has dropped to 5.625%. There is even further impetus to act on this information. Even if prices decline another 10% due to the market panic, there are sellers out there right now selling for 20% under current appraised value. So you might find a house for $160,000 today that will end up being worth $180,000 when the market bottoms out - a paradox, but true. This also means that your value is likely to be at it's highest as far as refinancing. Remember that EQUITY is one of the positive factors banks consider.

If you think you might be in your current home for more than a few years, have an adjustable rate mortgage, or have an interest rate that's over 6% - or - if you are a potential home-buyer, it is OK to come out now. Doing so could save you lots of money.

The Pendulum Effect

National average home prices are down significantly. This trend will continue, but consider three things. First, the hardest-hit markets drag down the average depreciation. Second, mid to high priced homes were more inflated than entry level housing. When those homes depreciate, they have farther to fall than a lower priced home. This also brings down the national home price average. Finally, panic can create a knee-jerk reaction among sellers, and market perception can create hesitancy among buyers.

What does this all mean? It's a GREAT time to shop for a moderately priced home. When the market has found a solid bottom and the demand returns, there will be a lot less ambiguity about what a home in your area is really worth. Sellers will be less willing to entertain offers, and selection will decrease.

Recession and Expansion

There are times when the economy is brisk and everyone feels confident about his or her prospects for the future. As a result, they spend more money, eat out more often, and buy more new cars and houses.

Then, for one reason or another, the economy slows down. Companies lay off employees and consumers are more careful about where they spend money, perhaps saving more than usual. As a result, the economy decelerates even further. If it slows enough, we have a recession. During such a time, fewer people are buying homes. Even so, some homeowners find themselves in a situation where they must sell. Families grow beyond the capacity of the home, employees get relocated, and some may even find themselves unable to make their mortgage payment - perhaps because of a layoff in the family.

In the business cycle of real estate, there are buyers' markets and sellers' markets...and some markets in between. It is all based on supply and/or demand.

Supply and Demand - Inventory

During a seller’s market, homes sell quickly and sellers have a lot of pricing power. As a result, prices rise more rapidly than at other times. During a buyer’s market, homes may sit on the market for a while before selling; consequently, sellers become more flexible and may even drop their prices.
The market is determined by supply and demand.

In real estate, the relationship between supply and demand is calculated as "available inventory." At the current sales pace, how long would it take to sell the total number of houses available on the market? That is how the real estate industry measures inventory.

Inventory is measured in weeks and months. Longer inventory times are associated with buyers' markets. Shorter inventory periods are associated with sellers' markets. Some buyers and sellers hope to time their transactions to take advantage of market cycles.

Timing Your Purchase to the Market Cycle

The real estate market does not necessarily move in tandem with the stock market or the economy as a whole. When the economy is doing well, interest rates are generally higher. The result is that fewer people can afford houses. When the economy slows down, interest rates fall. The "affordability index" moves up and more people can afford houses.

As you can see, this cycle does not move "in sync" with the rest of the economy. One problem with attempting to time your purchase to the business cycle is that even experts have problems accurately predicting the future economy. It is also strongly influenced by employment, salary, and consumer outlook for the future. If you could "time the market," that strategy would most benefit first-time buyers. All these factors make it difficult to know, in advance, whether the housing market is going to boom or bust.

Why You Should Not Wait to Purchase a Home

People who already own a home usually need to sell it in order to come up with the down payment for their next home. Even if they don't, they would have to carry the debt and obligations on two homes at the same time. This can create financial hardship, even when you rent out the previous home. There are maintenance costs, renters don't always make their payments on time, the rent may not cover the mortgage and other costs, and sometimes the property may be vacant.

If you are a move-up buyer and want to purchase your next home during a depressed market, you generally have to sell your current home during that same depressed market. If you want to sell during a boom, then you also have to purchase during the same boom - It tends to equal out.

Finally, suppose you are a first-time buyer and wait until the beginning of a boom is near. If you guess wrong, are you going to wait...and wait...and wait...till the next depressed market? If so, you could miss out on loads of depreciation...and that is assuming you guessed right about your market timing? For instance, in 1996 when the home market was struggling, who would have predicted what the next seven years actually produced?

Rob Alley
REALTOR® - Roy Wheeler Realty Co.
President - Virginia Tech Alumni Association - Charlottesville Chapter
Boy Scouts of America - District Advancement Chairman - Monticello District
434-220-7630 (office)
http://www.robsellscharlottesville.com/

Charlottesville Real Estate: The Numbers That Really Matter

The most important factor in buying or selling a home isn't what is going on nationally - it is what is going on in your local market.

Whatever the national trends are with regard to real estate - whether they are booming or busting - what really matters is what the market conditions are in your region, town, or neighborhood. What does that mean? Even during the real estate boom of 2001-2005, a great many cities and regions did not participate in the boom - they lagged behind, or even decreased in value. Similarly, when prices began to fall nationally, there were plenty of regions and locales where prices increased, and sales boomed.

Evaluating present and future trends and influences in your region or neighborhood is essential to creating long term wealth, whether you are in a buyer's or a seller's market. Detailed information at the local level is what is most useful for home buyers, sellers, owners and window shoppers. The trend data at the metro area level, or the nation, is great water cooler talk, but not that relevant when you’re making decisions about your most important asset.
That being said, let’s look at how our local area did for November and what we should expect for the months leading into the Spring Market.

City of Charlottesville

There were 169 homes that had some type of sales activity in the city. There were 137 homes that went under contract and 33 homes that sold for an average price of $292,218 with an average DOM of 75 days. There are currently 364 active properties in the city.

Albemarle County

There were 243 homes that had some type of sales activity in the county. There were 190 homes that went under contract and 53 homes that sold for an average price of $385,383 with an average DOM of 90 days. There are currently 916 active properties in the county.

Fluvanna County

There were 56 homes that had some type of sales activity in the county. There were 37 homes that went under contract and 19 homes that sold for an average price of $275,373 with an average DOM of 93 days. There are currently 325 active properties in the county.

Greene County

There were 44 homes that had some type of sales activity in the county. There were 30 homes that went under contract and 14 homes that sold for an average price of $287,432 with an average DOM of 92 days. There are currently 199 active properties in the county.

Mortgage Industry

Long-term mortgage interest rates fell for the fifth night Friday. The 30-year fixed-rate average sank to 5.69 percent, and the 15-year fixed rate dipped to 5.27 percent. The 1-year adjustable slipped to 5.47 percent. We are currently seeing the lowest 30-year fixed interest rate in over two years. Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states.

Conclusion

All buyers, especially first time homebuyers, with the combined benefits of seller flexibility and an unexpected drop in mortgage interest rates, have a window of opportunity. These conditions will persist in many areas until early spring when inventory supplies are likely to become more balanced. Several factors converge to make the winter months a great time to buy real estate. One primary factor is the low mortgage interest rates being offered, which are hovering around 5.69 percent.

If you are conservative, and have been thinking about refinancing your home loan or buying a property - now is the time to act. Interest rates are historically low - and homes are an abundance of homes available - but it won't stay that way forever. You will want to contact your lender (or ask your Realtor for their preferred lender) and lock your rates. You can’t lock them forever, so you will have to be ready, and able to purchase a house or refinance.

If you are a risk taker, you may want to wait a little longer to see if you can get lucky enough to get a better rate, but you are going to have to pay close attention and be willing to pull the trigger quickly.

For more information on our Local Real Estate Market, there will be Home Buying Seminars on December 6th and 13th. Please RSVP to these events and learn more about your most important investment.

Rob AlleyRealtorRoy Wheeler Realty Co.President - Virginia Tech Alumni Association - Charlottesville ChapterBoy Scouts of America - District Advancement Chairman - Monticello District434-220-7630 (office)http://www.robsellscharlottesville.com/

Charlottesville Real Estate: The Numbers That Really Matter

The most important factor in buying or selling a home isn't what is going on nationally - it is what is going on in your local market.

Whatever the national trends are with regard to real estate - whether they are booming or busting - what really matters is what the market conditions are in your region, town, or neighborhood. What does that mean? Even during the real estate boom of 2001-2005, a great many cities and regions did not participate in the boom - they lagged behind, or even decreased in value. Similarly, when prices began to fall nationally, there were plenty of regions and locales where prices increased, and sales boomed.

Evaluating present and future trends and influences in your region or neighborhood is essential to creating long term wealth, whether you are in a buyer's or a seller's market. Detailed information at the local level is what is most useful for home buyers, sellers, owners and window shoppers. The trend data at the metro area level, or the nation, is great water cooler talk, but not that relevant when you’re making decisions about your most important asset.
That being said, let’s look at how our local area did for November and what we should expect for the months leading into the Spring Market.

City of Charlottesville

There were 169 homes that had some type of sales activity in the city. There were 137 homes that went under contract and 33 homes that sold for an average price of $292,218 with an average DOM of 75 days. There are currently 364 active properties in the city.

Albemarle County

There were 243 homes that had some type of sales activity in the county. There were 190 homes that went under contract and 53 homes that sold for an average price of $385,383 with an average DOM of 90 days. There are currently 916 active properties in the county.

Fluvanna County

There were 56 homes that had some type of sales activity in the county. There were 37 homes that went under contract and 19 homes that sold for an average price of $275,373 with an average DOM of 93 days. There are currently 325 active properties in the county.

Greene County

There were 44 homes that had some type of sales activity in the county. There were 30 homes that went under contract and 14 homes that sold for an average price of $287,432 with an average DOM of 92 days. There are currently 199 active properties in the county.

Mortgage Industry

Long-term mortgage interest rates fell for the fifth night Friday. The 30-year fixed-rate average sank to 5.69 percent, and the 15-year fixed rate dipped to 5.27 percent. The 1-year adjustable slipped to 5.47 percent. We are currently seeing the lowest 30-year fixed interest rate in over two years. Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states.

Conclusion

All buyers, especially first time homebuyers, with the combined benefits of seller flexibility and an unexpected drop in mortgage interest rates, have a window of opportunity. These conditions will persist in many areas until early spring when inventory supplies are likely to become more balanced. Several factors converge to make the winter months a great time to buy real estate. One primary factor is the low mortgage interest rates being offered, which are hovering around 5.69 percent.

If you are conservative, and have been thinking about refinancing your home loan or buying a property - now is the time to act. Interest rates are historically low - and homes are an abundance of homes available - but it won't stay that way forever. You will want to contact your lender (or ask your Realtor for their preferred lender) and lock your rates. You can’t lock them forever, so you will have to be ready, and able to purchase a house or refinance.

If you are a risk taker, you may want to wait a little longer to see if you can get lucky enough to get a better rate, but you are going to have to pay close attention and be willing to pull the trigger quickly.

For more information on our Local Real Estate Market, there will be Home Buying Seminars on December 6th and 13th. Please RSVP to these events and learn more about your most important investment.

Rob AlleyRealtorRoy Wheeler Realty Co.President - Virginia Tech Alumni Association - Charlottesville ChapterBoy Scouts of America - District Advancement Chairman - Monticello District434-220-7630 (office)http://www.robsellscharlottesville.com/

Does the Nationwide Housing Market tell the same story for Charlottesville?

Is now the best time to buy? Are prices going to keep falling in Charlottesville? How does the Charlottesville Real Estate Market compare to the rest of the nation? Well, let’s see.

We all know by now that home prices are falling nationally. The NY Times reported today that the troubled housing sector reached a new low this summer.

Prices of single-family homes in the third quarter fell 4.5 percent nationwide compared to a year ago, according to the Standard & Poor’s/Case-Shiller National Home Price Index. It was the largest drop since the index began in 1988. But is that what is truly happening in our local market??? Let's take a look and see.

We will take a look at data from 01/01/2006 through 11/27/2006 and compare it to the data from 01/01/2007 through 11/27/2007. We will use three different areas: the City of Charlottesville, Albemarle County, and Fluvanna County.

City of Charlottesville

In 2006 there were 723 homes sold in the city. They sold for an average price of $274,869 with an average Days on Market (DOM) of 66 days.

In 2007, there have been 566 homes sold for an average price of $308,355 with an average DOM of 73 days.

Summary: There have been 157 less homes sold in the city in 2007 (down 27%), but the average sales prices has gone up 12% and the average DOM has gone up only 7 days.

Albemarle County

In 2006 there were 1573 homes sold in the city. They sold for an average price of $420,758 with an average DOM of 56 days.

In 2007, there have been 1272 homes sold for an average price of $403,880 with an average DOM of 92 days.

Summary: There have been 301 less homes sold in the city in 2007 (down 23%), and the average sales prices has gone down 4.1% and the average DOM has gone up 36 days.

Fluvanna County

In 2006 there were 484 homes sold in the city. They sold for an average price of $274,365 with an average DOM of 75 days.

In 2007, there have been 387 homes sold for an average price of $279,464 with an average DOM of 88 days.

Summary: There have been 97 less homes sold in Fluvanna in 2007 (down 25%), and the average sales prices has gone up 1.85% and the average DOM has gone up 13 days.

OVERALL SUMMARY AND ANALYSIS

In 2006 the average home sale price was $323,324 with an average DOM of 65.66 days. In 2007 the average home sale price was $330,566 with an average DOM of 84.33 days. This shows an average INCREASE in price by 2.2%!
So, why is our inventory not turning over rapidly?

Well, there are a couple of reasons:

1. A steady rise in foreclosures along with the struggling mortgage market has weighed down housing demand and boosted business inventories. Tightened lending standards have also made it more difficult for Americans to procure the loans needed to purchase homes.

2. The decline in the housing sector (nationally) and the upheaval in the credit markets have also dragged down consumer sentiment. An index of consumer confidence reached 87.3 in November, its lowest level since October 2005, the Conference Board said today.

3. Consumers have faced pressures from rising oil prices and the difficulties in the mortgage and lending markets, leading businesses to fear a steep drop-off in spending over the usually lucrative holiday season

The BOTTOM LINE

If you are looking to buy a house, and can afford to do so, it’s best you do it now. Charlottesville's prices are still rising while the nation is struggling; just imagine what is going to happen when the national home prices go up...will they skyrocket in Charlottesville?? They did in 2005. It's only a matter of time before it happens again.

http://www.robsellscharlottesville.com/
http://www.theaverygroup.com/

Does the Nationwide Housing Market tell the same story for Charlottesville?

Is now the best time to buy? Are prices going to keep falling in Charlottesville? How does the Charlottesville Real Estate Market compare to the rest of the nation? Well, let’s see.

We all know by now that home prices are falling nationally. The NY Times reported today that the troubled housing sector reached a new low this summer.

Prices of single-family homes in the third quarter fell 4.5 percent nationwide compared to a year ago, according to the Standard & Poor’s/Case-Shiller National Home Price Index. It was the largest drop since the index began in 1988. But is that what is truly happening in our local market??? Let's take a look and see.

We will take a look at data from 01/01/2006 through 11/27/2006 and compare it to the data from 01/01/2007 through 11/27/2007. We will use three different areas: the City of Charlottesville, Albemarle County, and Fluvanna County.

City of Charlottesville

In 2006 there were 723 homes sold in the city. They sold for an average price of $274,869 with an average Days on Market (DOM) of 66 days.

In 2007, there have been 566 homes sold for an average price of $308,355 with an average DOM of 73 days.

Summary: There have been 157 less homes sold in the city in 2007 (down 27%), but the average sales prices has gone up 12% and the average DOM has gone up only 7 days.

Albemarle County

In 2006 there were 1573 homes sold in the city. They sold for an average price of $420,758 with an average DOM of 56 days.

In 2007, there have been 1272 homes sold for an average price of $403,880 with an average DOM of 92 days.

Summary: There have been 301 less homes sold in the city in 2007 (down 23%), and the average sales prices has gone down 4.1% and the average DOM has gone up 36 days.

Fluvanna County

In 2006 there were 484 homes sold in the city. They sold for an average price of $274,365 with an average DOM of 75 days.

In 2007, there have been 387 homes sold for an average price of $279,464 with an average DOM of 88 days.

Summary: There have been 97 less homes sold in Fluvanna in 2007 (down 25%), and the average sales prices has gone up 1.85% and the average DOM has gone up 13 days.

OVERALL SUMMARY AND ANALYSIS

In 2006 the average home sale price was $323,324 with an average DOM of 65.66 days. In 2007 the average home sale price was $330,566 with an average DOM of 84.33 days. This shows an average INCREASE in price by 2.2%!
So, why is our inventory not turning over rapidly?

Well, there are a couple of reasons:

1. A steady rise in foreclosures along with the struggling mortgage market has weighed down housing demand and boosted business inventories. Tightened lending standards have also made it more difficult for Americans to procure the loans needed to purchase homes.

2. The decline in the housing sector (nationally) and the upheaval in the credit markets have also dragged down consumer sentiment. An index of consumer confidence reached 87.3 in November, its lowest level since October 2005, the Conference Board said today.

3. Consumers have faced pressures from rising oil prices and the difficulties in the mortgage and lending markets, leading businesses to fear a steep drop-off in spending over the usually lucrative holiday season

The BOTTOM LINE

If you are looking to buy a house, and can afford to do so, it’s best you do it now. Charlottesville's prices are still rising while the nation is struggling; just imagine what is going to happen when the national home prices go up...will they skyrocket in Charlottesville?? They did in 2005. It's only a matter of time before it happens again.

http://www.robsellscharlottesville.com/
http://www.theaverygroup.com/

First Time Home Buyer Seminars

The Avery Group is starting First Time Home Buyer Seminars TONIGHT! The time will be 7:00 pm at the Charlottesville Settlement Office off of Rio Road. We will also be doing seminars on December 6th, and 13th. A Lender will be present to talk about loans and credit. A closing specialist will also be present to talk about settlement and the HUD1 statement. Check out the link below to view an article from the business journal on our First Time Home Buyer Seminars!! Please call 434-975-9000 for more information or to reserve a space!

Check out our article in the Business Journal about First Time Home Buyers!

First Time Home Buyer Seminars

The Avery Group is starting First Time Home Buyer Seminars TONIGHT! The time will be 7:00 pm at the Charlottesville Settlement Office off of Rio Road. We will also be doing seminars on December 6th, and 13th. A Lender will be present to talk about loans and credit. A closing specialist will also be present to talk about settlement and the HUD1 statement. Check out the link below to view an article from the business journal on our First Time Home Buyer Seminars!! Please call 434-975-9000 for more information or to reserve a space!

Check out our article in the Business Journal about First Time Home Buyers!

Roy Wheeler Realty Co. announces a series of Home Buying Seminars in November and December 2007

November 1, 2007: The Charlottesville Area Association of Realtors stated in their recent Third Quarter Market Report that, “Many an opportunity is lost because a man is out looking for four-leaf clovers. Buyers seem to be looking for an incredible deal when great opportunity is right in front of them.” Hence, “Buyers do not need a four-leaf clover to have luck in purchasing a home right now”; there is tremendous opportunity throughout Central Virginia. This is not a Market to be afraid of but rather a Market in which to jump!

Whether someone is a First Time Home Buyer, has been away from the home buying process for a number of years or is even new to the area, the seminars being offered by The Avery Group will allay their fears about the current real estate market, getting a mortgage and give them an introduction to the home buying process in Central Virginia. The one-and-a-half hour class will offer an introduction to buying a home, working with a real estate agent, a mortgage professional, and how to get to Closing!

Additional classes will be available on: (1) the process of finding the right home, townhouse or condo and writing an offer; (2) financing, credit scores and credit issues; (3) the home inspection process; and (4) working with an attorney or title company. Participants will have an opportunity to sign up for these free classes at the Introductory Seminar. The additional classes are free and completely optional.

The first informational Seminar for First Time Home Buyers will be held on Thursday, November 8, 2007 from 6:00 to 7:30 PM. A Seminar will also be offered on Saturday, November 10, 2007 from 10:00 to 11:30 AM and Thursday, November 15, 2007 from 7:00 to 8:30 PM. Registration is required and light refreshments will be served; please call (434) 975-9000 to reserve your seat.

All of the seminars will take place at Charlottesville Settlement Company located in Glenwood Station next to Fashion Square Mall in Charlottesville, VA.

Rob Alley, REALTOR® and Cynthia Avery, REALTOR® have worked together this past year as members of The Avery Group which offers ten years of combined real estate experience in Central Virginia. Rob is also President of the Charlottesville Chapter of the Virginia Tech Alumni Association. Known for their abundant energy and service to others, Rob & Cynthia offer a dynamic combination of real estate and market knowledge, exemplary service, internet savvy, wisdom and good old fashion common sense. You can visit them on the web at www.TheAveryGroup.com.

The Roy Wheeler Realty Company was founded with the philosophy that "service is our most important product." That philosophy is as important today as it was in 1927. Today, over 100 agents work from historic Ednam Hall as well as their three other offices in Wintergreen, Greene County and Sperryville; all carry on the tradition of Roy Wheeler and his commitment to excellence. Their reputation for hard work, diligence and unsurpassed service to their clients has stood the test of time throughout the Piedmont. The associates and staff of Roy Wheeler Realty Co. take pride in the services they provide to the community and in their ability to make a positive contribution to the region and the people they work with daily.

You may register for the Home Buying Seminars by calling (434) 975-9000 or by emailing Info@TheAveryGroup.com. Please feel free to call for more information or if you have specific questions.

Roy Wheeler Realty Co. announces a series of Home Buying Seminars in November and December 2007

November 1, 2007: The Charlottesville Area Association of Realtors stated in their recent Third Quarter Market Report that, “Many an opportunity is lost because a man is out looking for four-leaf clovers. Buyers seem to be looking for an incredible deal when great opportunity is right in front of them.” Hence, “Buyers do not need a four-leaf clover to have luck in purchasing a home right now”; there is tremendous opportunity throughout Central Virginia. This is not a Market to be afraid of but rather a Market in which to jump!

Whether someone is a First Time Home Buyer, has been away from the home buying process for a number of years or is even new to the area, the seminars being offered by The Avery Group will allay their fears about the current real estate market, getting a mortgage and give them an introduction to the home buying process in Central Virginia. The one-and-a-half hour class will offer an introduction to buying a home, working with a real estate agent, a mortgage professional, and how to get to Closing!

Additional classes will be available on: (1) the process of finding the right home, townhouse or condo and writing an offer; (2) financing, credit scores and credit issues; (3) the home inspection process; and (4) working with an attorney or title company. Participants will have an opportunity to sign up for these free classes at the Introductory Seminar. The additional classes are free and completely optional.

The first informational Seminar for First Time Home Buyers will be held on Thursday, November 8, 2007 from 6:00 to 7:30 PM. A Seminar will also be offered on Saturday, November 10, 2007 from 10:00 to 11:30 AM and Thursday, November 15, 2007 from 7:00 to 8:30 PM. Registration is required and light refreshments will be served; please call (434) 975-9000 to reserve your seat.

All of the seminars will take place at Charlottesville Settlement Company located in Glenwood Station next to Fashion Square Mall in Charlottesville, VA.

Rob Alley, REALTOR® and Cynthia Avery, REALTOR® have worked together this past year as members of The Avery Group which offers ten years of combined real estate experience in Central Virginia. Rob is also President of the Charlottesville Chapter of the Virginia Tech Alumni Association. Known for their abundant energy and service to others, Rob & Cynthia offer a dynamic combination of real estate and market knowledge, exemplary service, internet savvy, wisdom and good old fashion common sense. You can visit them on the web at www.TheAveryGroup.com.

The Roy Wheeler Realty Company was founded with the philosophy that "service is our most important product." That philosophy is as important today as it was in 1927. Today, over 100 agents work from historic Ednam Hall as well as their three other offices in Wintergreen, Greene County and Sperryville; all carry on the tradition of Roy Wheeler and his commitment to excellence. Their reputation for hard work, diligence and unsurpassed service to their clients has stood the test of time throughout the Piedmont. The associates and staff of Roy Wheeler Realty Co. take pride in the services they provide to the community and in their ability to make a positive contribution to the region and the people they work with daily.

You may register for the Home Buying Seminars by calling (434) 975-9000 or by emailing Info@TheAveryGroup.com. Please feel free to call for more information or if you have specific questions.

How to protect home from winter's fury

Start thinking about sealers, gutters, foundation vents

With fall's transition between the seasons comes a transition for your home as well. That roof and those four sturdy walls need to protect you from winter's fury, and there are several things you can do to help get ready.

1. Seal masonry surfaces: Apply a sealer to concrete driveways and walkways, brick patios and other exterior masonry. The sealer, available from paint stores and masonry supply retailers, prevents water from penetrating into cracks and crevices where it can freeze and cause serious damage.

2. Prepare your fireplace: Now is the time to get wood-burning appliances such as fireplaces and woodstoves ready for the season. Remove ash buildup; check screens and glass doors for damage; replace door gaskets as needed; and check doors, door latches, screen brackets, and other metal parts to be sure they are secure and operating properly. Check the condition of the exterior of the chimney or flue pipe, including the cap, and then clean the chimney to remove last season's accumulation of soot and creosote. Consider having a professional chimney sweep service clean and check everything at least every other year.

3. Prepare humidifiers: Winter is a dry time inside your home, and many people choose to use a
portable or central humidifier to put much-needed moisture back into the air. Now is the time to check your humidifier to make sure it's operating properly, that all necessary plates and filters are in place, and that the system is clean and the water supply is correct. Check your operating and maintenance instructions for more information.

4. Check the gutters: Check and clean gutters to remove leaf and pine needle debris, and check that the opening between the gutter and the downspout is unobstructed. Look for loose joints or other structural problems with the system, and repair them as needed using pop rivets. Use a gutter sealant to seal any connections where leaks may be occurring.

5. Change your furnace filters: Replace your old furnace filter with a new one. While you're at it, check the furnace for worn belts, lubrication needs or other servicing that might be required; refer to your owner's manual for specific suggestions, and follow any manufacturer safety instructions for shutting the power and fuel to the furnace before servicing.

6. Install a carbon monoxide detector: As we close up our houses for winter, the chances of carbon monoxide poisoning from malfunctioning gas appliances increases substantially. If you have a fireplace, water heater, or other appliance that is fueled by propane or natural gas, fall is an ideal time to install a carbon monoxide detector -- available from many home centers and retailers of heating system supplies. While you're at it, consider also having a professional heating contractor come out and inspect all of the fittings and components on your gas appliances.

7. Check smoke detectors: Fall is a great time to check the operation of your smoke detectors and to change batteries. You should also consider installing additional smoke detectors outside each bedroom.

8. Close off foundation vents: Depending on the winter climate in your area, you'll want to be thinking about closing off your foundation vents to help prevent pipe freezes. You can leave the foundation open for as many months as the weather remains mild, but close them off when the local forecasts begin calling for freezing temperatures. Once closed, you can leave them that way until it warms up again in the spring.

9. Check weatherstripping: Air leaks around doors and windows can rob your home of expensive heated air and create uncomfortable drafts that keep you feeling chilly. Check the weatherstripping around doors and windows, and replace any that are worn -- retailers who specialize in doors and windows can fix you up with the proper replacement type for your situation

Strategies to lower your mortgage interest rate

Interest rates on jumbo mortgages jumped about 3/4 percent in mid-August. Before settling for higher rates or giving up altogether, consider the following ways you might lower your financing costs.

Even though jumbos increased in price, conforming rates -- for mortgage amounts up to $417,000 -- decreased. On Aug. 20, for example, it was possible to find a 30-year fixed-rate conforming mortgage for 6.25 percent and one point. At the same time, jumbo mortgages over $417,000 were going for 7.25 percent and one point.

"Points" is a term lenders use for a mortgage origination fee that's paid by the borrower one time only at closing. One point equals 1 percent of the loan amount. By paying more points upfront, a borrower can lower the mortgage interest rate for the term of the loan.

Points are tax-deductible on purchase mortgages in the year of purchase for those borrowers who itemize deductions. Restrictions apply, so be sure to check with your tax advisor to see if paying points will lower your overall cost of financing. Usually, the longer you plan to keep paying on the mortgage, the more worthwhile it is to pay points for a lower rate.

HOUSE HUNTING TIP: Buyers who don't have the extra cash to pay points could ask the seller to pay points for them. Most lenders permit a seller to credit cash to buyers at closing for their nonrecurring closing costs. Points are a nonrecurring closing cost -- they are paid once at closing, unlike mortgage payments or homeowners insurance that is paid for on an ongoing basis.

Lenders have limits on how much a seller can credit a buyer. It's usually 3 to 6 percent of the purchase price. Before you write an offer, find out your lender's limit. Then ask the seller to credit you a dollar amount that falls within the lender's guidelines. This way you won't raise a red flag with the lender that could cause your loan to be denied.

Also be aware that appraisers are taking a hard look at seller credits to determine if they affect the market value of the property. If you inflate your offer price to cover the cost of points and this puts the price out of line with current market value, the lender could lower the appraised value. In this case, your mortgage amount might also be lowered, leaving you short on the funds you will need to close.

No one knows the future direction of interest rates. But, if you believe that interest rates will come down soon and that you'll refinance into a lower-interest-rate mortgage, you might be better off paying a higher rate now and no points.

Another way to reduce your mortgage interest rate on jumbo financing is to create a blended rate by combining a low-interest-rate conforming loan with a second mortgage. Secondary financing is available in amounts up to $500,000 for buyers with a 20 percent cash down payment, a good credit score (over 700 with some lenders) and verifiable income.

By combining a conforming $400,000 fixed-rate first mortgage at 6.25 percent with a fixed-rate $400,000 second mortgage at 7.4 percent, you end up with a blended rate of 6.8 percent. So, you create jumbo financing for under 7 percent in an over-7 percent first-mortgage market.
Most conventional second mortgages have payments that are amortized over 30 years, with a due date in 15 years. This means that there is a balloon payment when the loan is due, unless you pay the principal down substantially during the term of the loan.

THE CLOSING: Make sure that there is no prepayment penalty on the second mortgage so that you can make pay-downs or pay the loan off at any time without penalty.

How to protect home from winter's fury

Start thinking about sealers, gutters, foundation vents

With fall's transition between the seasons comes a transition for your home as well. That roof and those four sturdy walls need to protect you from winter's fury, and there are several things you can do to help get ready.

1. Seal masonry surfaces: Apply a sealer to concrete driveways and walkways, brick patios and other exterior masonry. The sealer, available from paint stores and masonry supply retailers, prevents water from penetrating into cracks and crevices where it can freeze and cause serious damage.

2. Prepare your fireplace: Now is the time to get wood-burning appliances such as fireplaces and woodstoves ready for the season. Remove ash buildup; check screens and glass doors for damage; replace door gaskets as needed; and check doors, door latches, screen brackets, and other metal parts to be sure they are secure and operating properly. Check the condition of the exterior of the chimney or flue pipe, including the cap, and then clean the chimney to remove last season's accumulation of soot and creosote. Consider having a professional chimney sweep service clean and check everything at least every other year.

3. Prepare humidifiers: Winter is a dry time inside your home, and many people choose to use a
portable or central humidifier to put much-needed moisture back into the air. Now is the time to check your humidifier to make sure it's operating properly, that all necessary plates and filters are in place, and that the system is clean and the water supply is correct. Check your operating and maintenance instructions for more information.

4. Check the gutters: Check and clean gutters to remove leaf and pine needle debris, and check that the opening between the gutter and the downspout is unobstructed. Look for loose joints or other structural problems with the system, and repair them as needed using pop rivets. Use a gutter sealant to seal any connections where leaks may be occurring.

5. Change your furnace filters: Replace your old furnace filter with a new one. While you're at it, check the furnace for worn belts, lubrication needs or other servicing that might be required; refer to your owner's manual for specific suggestions, and follow any manufacturer safety instructions for shutting the power and fuel to the furnace before servicing.

6. Install a carbon monoxide detector: As we close up our houses for winter, the chances of carbon monoxide poisoning from malfunctioning gas appliances increases substantially. If you have a fireplace, water heater, or other appliance that is fueled by propane or natural gas, fall is an ideal time to install a carbon monoxide detector -- available from many home centers and retailers of heating system supplies. While you're at it, consider also having a professional heating contractor come out and inspect all of the fittings and components on your gas appliances.

7. Check smoke detectors: Fall is a great time to check the operation of your smoke detectors and to change batteries. You should also consider installing additional smoke detectors outside each bedroom.

8. Close off foundation vents: Depending on the winter climate in your area, you'll want to be thinking about closing off your foundation vents to help prevent pipe freezes. You can leave the foundation open for as many months as the weather remains mild, but close them off when the local forecasts begin calling for freezing temperatures. Once closed, you can leave them that way until it warms up again in the spring.

9. Check weatherstripping: Air leaks around doors and windows can rob your home of expensive heated air and create uncomfortable drafts that keep you feeling chilly. Check the weatherstripping around doors and windows, and replace any that are worn -- retailers who specialize in doors and windows can fix you up with the proper replacement type for your situation

Strategies to lower your mortgage interest rate

Interest rates on jumbo mortgages jumped about 3/4 percent in mid-August. Before settling for higher rates or giving up altogether, consider the following ways you might lower your financing costs.

Even though jumbos increased in price, conforming rates -- for mortgage amounts up to $417,000 -- decreased. On Aug. 20, for example, it was possible to find a 30-year fixed-rate conforming mortgage for 6.25 percent and one point. At the same time, jumbo mortgages over $417,000 were going for 7.25 percent and one point.

"Points" is a term lenders use for a mortgage origination fee that's paid by the borrower one time only at closing. One point equals 1 percent of the loan amount. By paying more points upfront, a borrower can lower the mortgage interest rate for the term of the loan.

Points are tax-deductible on purchase mortgages in the year of purchase for those borrowers who itemize deductions. Restrictions apply, so be sure to check with your tax advisor to see if paying points will lower your overall cost of financing. Usually, the longer you plan to keep paying on the mortgage, the more worthwhile it is to pay points for a lower rate.

HOUSE HUNTING TIP: Buyers who don't have the extra cash to pay points could ask the seller to pay points for them. Most lenders permit a seller to credit cash to buyers at closing for their nonrecurring closing costs. Points are a nonrecurring closing cost -- they are paid once at closing, unlike mortgage payments or homeowners insurance that is paid for on an ongoing basis.

Lenders have limits on how much a seller can credit a buyer. It's usually 3 to 6 percent of the purchase price. Before you write an offer, find out your lender's limit. Then ask the seller to credit you a dollar amount that falls within the lender's guidelines. This way you won't raise a red flag with the lender that could cause your loan to be denied.

Also be aware that appraisers are taking a hard look at seller credits to determine if they affect the market value of the property. If you inflate your offer price to cover the cost of points and this puts the price out of line with current market value, the lender could lower the appraised value. In this case, your mortgage amount might also be lowered, leaving you short on the funds you will need to close.

No one knows the future direction of interest rates. But, if you believe that interest rates will come down soon and that you'll refinance into a lower-interest-rate mortgage, you might be better off paying a higher rate now and no points.

Another way to reduce your mortgage interest rate on jumbo financing is to create a blended rate by combining a low-interest-rate conforming loan with a second mortgage. Secondary financing is available in amounts up to $500,000 for buyers with a 20 percent cash down payment, a good credit score (over 700 with some lenders) and verifiable income.

By combining a conforming $400,000 fixed-rate first mortgage at 6.25 percent with a fixed-rate $400,000 second mortgage at 7.4 percent, you end up with a blended rate of 6.8 percent. So, you create jumbo financing for under 7 percent in an over-7 percent first-mortgage market.
Most conventional second mortgages have payments that are amortized over 30 years, with a due date in 15 years. This means that there is a balloon payment when the loan is due, unless you pay the principal down substantially during the term of the loan.

THE CLOSING: Make sure that there is no prepayment penalty on the second mortgage so that you can make pay-downs or pay the loan off at any time without penalty.

One of the biggest misconceptions our clients have about homeownership is that the financial burden of a mortgage will be too much to continue the lifestyle to which they've become accustomed. Why, they ask, should I bother with such an enormous sacrifice?

The answer is that the relatively low interest rates of today's market combined with the numerous tax and equity benefits of homeownership are only a couple of the rewards of an investment in real estate. For example, in the state of Virginia, if you live in the home for 2 out of 5 consecutive years you are Capital Gains Tax free up to 250,000 for a single person and 500,000 for a married couple.

Also, there are numerous areas in the country, where the price of paying a mortgage is the same or slightly higher than paying rent. Here in Charlottesville, my brother and I bought a house and our mortgage payment is only $50 more than renting a two bedroom apartment. We were also able to buy a three bedroom house, so we brought on a housemate, and my brother and I are paying less than $500 a month to OWN a home. Compared to the $700 a month to rent an apartment, our lifestyle actually got better.

There are a number of ways to do things like this in our Real Estate Market. For example, someone can buy a home with an unfinished basement, finish it with a couple bedrooms, small living room, kitchen and bathroom and rent it out like an apartment. In some cases in Charlottesville, people are covering their full mortgage payment by doing this. So they are OWNING a home with SOMEONE ELSE'S MONEY. In fact, that's one of the best concepts to think about. Using someone else's money to own something. Great idea.

Feel free to check out my website for lisitings in and around the Charlottesville Area. http://www.robsellscharlottesville.com/

Also, please leave comments and subscribe to the blog. It will give me an idea of what you all would like to read about, and if the information I am giving is pertinent. Thanks!

One of the biggest misconceptions our clients have about homeownership is that the financial burden of a mortgage will be too much to continue the lifestyle to which they've become accustomed. Why, they ask, should I bother with such an enormous sacrifice?

The answer is that the relatively low interest rates of today's market combined with the numerous tax and equity benefits of homeownership are only a couple of the rewards of an investment in real estate. For example, in the state of Virginia, if you live in the home for 2 out of 5 consecutive years you are Capital Gains Tax free up to 250,000 for a single person and 500,000 for a married couple.

Also, there are numerous areas in the country, where the price of paying a mortgage is the same or slightly higher than paying rent. Here in Charlottesville, my brother and I bought a house and our mortgage payment is only $50 more than renting a two bedroom apartment. We were also able to buy a three bedroom house, so we brought on a housemate, and my brother and I are paying less than $500 a month to OWN a home. Compared to the $700 a month to rent an apartment, our lifestyle actually got better.

There are a number of ways to do things like this in our Real Estate Market. For example, someone can buy a home with an unfinished basement, finish it with a couple bedrooms, small living room, kitchen and bathroom and rent it out like an apartment. In some cases in Charlottesville, people are covering their full mortgage payment by doing this. So they are OWNING a home with SOMEONE ELSE'S MONEY. In fact, that's one of the best concepts to think about. Using someone else's money to own something. Great idea.

Feel free to check out my website for lisitings in and around the Charlottesville Area. http://www.robsellscharlottesville.com/

Also, please leave comments and subscribe to the blog. It will give me an idea of what you all would like to read about, and if the information I am giving is pertinent. Thanks!

‘Housing Decline Is Still Unfolding,’ Treasury Chief Says

WASHINGTON, Oct. 16 — Treasury Secretary Henry M. Paulson Jr. offered a pessimistic view of the country’s housing slump today as he called for help for hard-pressed homeowners and new mortgage regulations. But he urged Congress not to overreact by passing excessively harsh measures.

“Let me be clear: Despite strong economic fundamentals, the housing decline is still unfolding, and I view it as the most significant current risk to our economy,” Mr. Paulson said in a speech at a Georgetown University law forum. “The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth.”

Mr. Paulson said that “a first and important step” is to identify struggling borrowers early, steer them to mortgage counselors “and find a sustainable mortgage solution.”

“We have an immediate need to see more loan modifications and refinancing and other flexibility,” Mr. Paulson said. “For many families, this will be the only viable solution.”

Citing recent surveys showing that as many as half of the borrowers who have gone into foreclosure never had prior discussions with mortgage counselors, Mr. Paulson said, “That must change; early intervention is critical.”
But he warned against what he sees as an overreaction to “predatory lending” practices, and he said Congress must proceed with caution in determining whether to impose greater liability on mortgage “securitizers and investors,” or risk “cutting off investment inflows to the housing market.”

Mr. Paulson’s remarks today reflected perhaps the most sobering assessment by an administration official of the housing industry. Two months ago, when credit markets around the world were freezing up in panic over failed mortgages, Mr. Paulson said he was confident investors would work things out for themselves.

“We’re going to work through this problem just fine,” he said in an interview with CNBC on Aug. 21. “I think what the American people need to understand, these things take a while to play out.”

Mr. Paulson says he still holds that view. But in a sign that administration officials are more worried about underlying problems in the markets than they had previously let on, Mr. Paulson and other top Treasury officials are prodding and pushing Wall Street firms and the mortgage industry to come up with solutions — and helping devise some of them as well.

The plan announced Monday involves no money from taxpayers, and it was negotiated primarily between the banks themselves. But it highlighted Mr. Paulson’s growing effort to marry two competing goals of the Bush administration: to stabilize the battered markets for mortgages and housing, but to avoid a government bailout that might encourage investors to take even bigger risks in the future — what economists call “moral hazard.”

“I have no interest in bailing out lenders or property speculators,” Mr. Paulson said today. “Still, we must recognize the very real harm to families affected by the housing downturn.”

The Treasury’s move coincided with a gloomy assessment of both the mortgage and housing markets by Ben S. Bernanke, chairman of the Federal Reserve.
“Despite a few encouraging signs, conditions in mortgage markets remain difficult,” Mr. Bernanke told the New York Economic Club in a speech in Midtown Manhattan Monday evening.

Mr. Bernanke said the overall economy is still growing, suggesting that the Fed is not likely to cut interest rates at its policy meeting at the end of this month unless conditions worsen markedly in the next couple of weeks. But he predicted that the housing market has yet to hit bottom and that it was likely to be a “significant drag” on growth through early next year. A weak economy, he added, could reinforce problems in the credit markets.

Mr. Paulson’s effort to hammer out a plan with major banks to support mortgage-backed securities was headed by two of his top deputies, Robert Steel and Anthony Ryan, both Wall Street veterans. The two men herded rival bank executives into meetings and conference calls over the past month, and helped devise a plan aimed at jump-starting the frozen mortgage market.

Mr. Paulson is becoming more active on other fronts as well. In his speech today, he called for new nationwide rules for mortgage lenders, changes in the practices of credit-rating agencies and tougher scrutiny by federal banking regulators.

Mr. Paulson also tried to step up pressure on mortgage lenders and mortgage-servicing companies to renegotiate terms for people in danger of defaulting on expensive subprime loans.

By EDMUND L. ANDREWS
Published: October 16, 2007
New York Times Business

http://www.robsellscharlottesville.com/

‘Housing Decline Is Still Unfolding,’ Treasury Chief Says

WASHINGTON, Oct. 16 — Treasury Secretary Henry M. Paulson Jr. offered a pessimistic view of the country’s housing slump today as he called for help for hard-pressed homeowners and new mortgage regulations. But he urged Congress not to overreact by passing excessively harsh measures.

“Let me be clear: Despite strong economic fundamentals, the housing decline is still unfolding, and I view it as the most significant current risk to our economy,” Mr. Paulson said in a speech at a Georgetown University law forum. “The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth.”

Mr. Paulson said that “a first and important step” is to identify struggling borrowers early, steer them to mortgage counselors “and find a sustainable mortgage solution.”

“We have an immediate need to see more loan modifications and refinancing and other flexibility,” Mr. Paulson said. “For many families, this will be the only viable solution.”

Citing recent surveys showing that as many as half of the borrowers who have gone into foreclosure never had prior discussions with mortgage counselors, Mr. Paulson said, “That must change; early intervention is critical.”
But he warned against what he sees as an overreaction to “predatory lending” practices, and he said Congress must proceed with caution in determining whether to impose greater liability on mortgage “securitizers and investors,” or risk “cutting off investment inflows to the housing market.”

Mr. Paulson’s remarks today reflected perhaps the most sobering assessment by an administration official of the housing industry. Two months ago, when credit markets around the world were freezing up in panic over failed mortgages, Mr. Paulson said he was confident investors would work things out for themselves.

“We’re going to work through this problem just fine,” he said in an interview with CNBC on Aug. 21. “I think what the American people need to understand, these things take a while to play out.”

Mr. Paulson says he still holds that view. But in a sign that administration officials are more worried about underlying problems in the markets than they had previously let on, Mr. Paulson and other top Treasury officials are prodding and pushing Wall Street firms and the mortgage industry to come up with solutions — and helping devise some of them as well.

The plan announced Monday involves no money from taxpayers, and it was negotiated primarily between the banks themselves. But it highlighted Mr. Paulson’s growing effort to marry two competing goals of the Bush administration: to stabilize the battered markets for mortgages and housing, but to avoid a government bailout that might encourage investors to take even bigger risks in the future — what economists call “moral hazard.”

“I have no interest in bailing out lenders or property speculators,” Mr. Paulson said today. “Still, we must recognize the very real harm to families affected by the housing downturn.”

The Treasury’s move coincided with a gloomy assessment of both the mortgage and housing markets by Ben S. Bernanke, chairman of the Federal Reserve.
“Despite a few encouraging signs, conditions in mortgage markets remain difficult,” Mr. Bernanke told the New York Economic Club in a speech in Midtown Manhattan Monday evening.

Mr. Bernanke said the overall economy is still growing, suggesting that the Fed is not likely to cut interest rates at its policy meeting at the end of this month unless conditions worsen markedly in the next couple of weeks. But he predicted that the housing market has yet to hit bottom and that it was likely to be a “significant drag” on growth through early next year. A weak economy, he added, could reinforce problems in the credit markets.

Mr. Paulson’s effort to hammer out a plan with major banks to support mortgage-backed securities was headed by two of his top deputies, Robert Steel and Anthony Ryan, both Wall Street veterans. The two men herded rival bank executives into meetings and conference calls over the past month, and helped devise a plan aimed at jump-starting the frozen mortgage market.

Mr. Paulson is becoming more active on other fronts as well. In his speech today, he called for new nationwide rules for mortgage lenders, changes in the practices of credit-rating agencies and tougher scrutiny by federal banking regulators.

Mr. Paulson also tried to step up pressure on mortgage lenders and mortgage-servicing companies to renegotiate terms for people in danger of defaulting on expensive subprime loans.

By EDMUND L. ANDREWS
Published: October 16, 2007
New York Times Business

http://www.robsellscharlottesville.com/

Third Quarter Market Report

Third Quarter Market Report

Challenges, Opportunities, and Surprises, Oh My!

The Avery Group - Roy Wheeler Realty Co.

Someone named Anonymous once said, "Many an opportunity is lost because a man is out looking for four-leaf clovers." That quote seems to sum up the real estate market – buyers seem to be looking for some sort of incredible deal when great opportunity is right in front of them.

The slow pace of sales in the Charlottesville area real estate market is somewhat surprising given the “buyer’s market” we are experiencing. Buyers do not need a four-leaf clover to have luck in purchasing a home right now. Sellers, on the other hand, face a significant challenge.

There are some understandable “excuses” as to why buyers are hesitating – over-hyped mortgage crisis, trouble selling their existing house, waiting for the market to “bottom out” – but this market report will show the best time to buy is NOW! Ben Franklin said “time is money” and the longer you wait, the more money you are leaving on the table.

Overview Through the Third Quarter

The current real estate market is much more complex and variable than past years. The defining measure of this market is not the slower pace of sales; rather, the most dominating factor is the record level of homes for sale. As of early October, we have almost 3,500 homes listed “for sale” in the CAAR MLS system – three times the inventory level of three years ago. High inventory levels have kept the prices low, “Days on Market” high, and sellers reaching for Maalox.

Homes Sold

There were 2,875 homes sold in the first nine months of 2007, which was down 647 (-18.4%) from last year. All local areas (Albemarle -17.8%, Charlottesville -25.6%, Fluvanna -21.5%, Greene -34.7%, Louisa -18.5%, and Nelson -21.5%) posted lower sales than the same period last year. Looking at the past 6 years (see chart below), our region has returned to a sales level just above 2003 – which was a record at the time.

New Construction

New to the CAAR market report this year is a look at the number of new homes that were sold through the CAAR MLS system. It is important to note that many “new” homes are not included in this statistic. It is very common for a buyer to contact a builder directly to custom build a home. As a rule, new home statistics tend to lag behind the rest of the market as far as trends are concerned. New home sales peaked in 2006, a year after the overall market. New construction, both locally and nationally, slowed dramatically in mid-2006. If the record traffic of home shoppers at the recent Blue Ridge Home Builders’ Parade of Homes is any indication, new homes sales are poised to make a recovery.

Median Sales Price

It may come as a surprise to some that the median price of homes in our area actually increased in the first three months of the year. Remarkably, Charlottesville’s median price was up a whopping 17.2%. Before all you city dwellers get excited, there are a few explanations. First, the city had a lot of modestly priced condos sell last year, which lowered the median price. Second, there has been a significant amount of new construction in the city this year with price tags from $300,000 to $500,000. Finally, 25% fewer homes sold this year, which makes the middle of the market (otherwise known as the median price) more susceptible to dramatic change. It would be a mistake to assume that real home prices went up 17% in the city.

Overall, the median price rose $5,100 (+1.9%). Albemarle (-1.8%) and Louisa (-0.8%) were down slightly, but all other areas were up after three quarters. Other area increases were modest – Fluvanna (+4.7%), Greene (+1.9%), Nelson (+3.4%).

Days on Market (DOM)

The high inventory of homes for sale has created a “tale of two cities” for DOM. Homes that have sold this year, sold quickly, but many homes have been on the market much longer than the average. The median DOM for homes that sold through the 3rd quarter is just 59 days. By contrast, the median for homes on the market is 110 days. A third of the homes still on the market have been there for more than 150 days and a quarter of the homes for sale right now have been on the market more than 200 days. There are many reasons for this dichotomy of DOM, but the main reason is probably price. The axiom in the real estate industry is, “Any home will sell quickly if it is priced correctly.”

Inventory of Homes for Sale

The inventory of homes for sale in the Charlottesville area has been a key factor in the local market for the past several years. Inventory levels are generally a good indication of where home prices are going. In the early part of the decade, we saw extremely low inventory levels of around 4 or 5 months of supply. This caused home prices to soar, as buyers were forced to make aggressive offers to purchase the home they wanted. Today, we have a 20-month supply of homes on the market, which is very high and possibly a record. We are just entering a quieter selling season with the holidays approaching, so we will likely see a continuation of high inventory into the spring. First-time buyers, who don’t have a home to sell, have an extraordinary opportunity in this market.
Currently, we have 3,471 homes on the market and the median price of these homes is $329,000. The average DOM of these homes is 126 days. There are 588 homes for sale under $200,000 with an average DOM of 120. There are 262 homes currently on the market priced at a million dollars or more with an average DOM of 154.

Condos and Townhomes

The explosion of condominiums and townhomes in 2005 and 2006 appears to be over. Most sales of attached homes are in Charlottesville and Albemarle, so this report covers only those areas. The charts below show the attached homes sold in the first nine months of 2007 compared to past years. Inventory levels of attached homes for sale are still high, with 438 listed for sale in Charlottesville and Albemarle. This over-supply is presented in the 151 average DOM for the attached properties currently on the market compared to the 125 days for detached homes in Charlottesville and Albemarle. The median price of an attached home is $259,500, which is much lower than detached homes on the market.

Price Per Square Foot (Finished)

Looking at the average price per square foot of finished space in homes is interesting, but should not be relied on as a scientific number. The averages in this section of the report include the cost of the land, which varies greatly based on location and amenities. A lot at Wintergreen with fantastic views of the valley costs much more than a lot in other parts of Nelson. With that said, the numbers in this section continue to reflect the softening of prices we have seen in 2007.

Nelson County, thanks to the large number of resort properties, has consistently led the way in price per square foot, with Charlottesville generally second. City homes are higher than other areas, simply because they are located more conveniently to U.Va. and downtown. As the saying goes, there are three things that matter in real estate – location, location, and location.

Conclusions and Predictions

The seasonal aspect of the Charlottesville area real estate market allows us to draw year-end conclusions based on the first three quarters. The balance of the year is the “slow” time for sales, so unless there is a dramatic real estate swing, the third quarter will be reflective of the year-end situation. That means we will end the year with the 4th highest year for sales reported to the CAAR MLS. Prices will continue to rise slowly and inventory will continue to be the big story in the market.

Sellers looking for a return to the sales pace of 2005 will be disappointed with my prediction for the future. I do not see inventory levels dropping to reasonable levels for the next 12 months (at least). That means sellers will be challenged by a lot of competition. Sellers will need to listen to the advice of their REALTOR® and price the property competitively. Buyers will continue to have extraordinary opportunities for the foreseeable future. With any luck, we may all be surprised by the strength and resiliency of the local real estate market by the time the spring market hits its stride.

For more information on this report or the real estate market, visit http://www.theaverygroup.com/ or contact Rob Alley of The Avery Group at (434) 975-9000 or info@theaverygroup.com.

3rd_Quarter_Market_Report[1].pdf

Real Estate

written by Dave Phillips, CEO of CAAR

Third Quarter Market Report

Third Quarter Market Report

Challenges, Opportunities, and Surprises, Oh My!

The Avery Group - Roy Wheeler Realty Co.

Someone named Anonymous once said, "Many an opportunity is lost because a man is out looking for four-leaf clovers." That quote seems to sum up the real estate market – buyers seem to be looking for some sort of incredible deal when great opportunity is right in front of them.

The slow pace of sales in the Charlottesville area real estate market is somewhat surprising given the “buyer’s market” we are experiencing. Buyers do not need a four-leaf clover to have luck in purchasing a home right now. Sellers, on the other hand, face a significant challenge.

There are some understandable “excuses” as to why buyers are hesitating – over-hyped mortgage crisis, trouble selling their existing house, waiting for the market to “bottom out” – but this market report will show the best time to buy is NOW! Ben Franklin said “time is money” and the longer you wait, the more money you are leaving on the table.

Overview Through the Third Quarter

The current real estate market is much more complex and variable than past years. The defining measure of this market is not the slower pace of sales; rather, the most dominating factor is the record level of homes for sale. As of early October, we have almost 3,500 homes listed “for sale” in the CAAR MLS system – three times the inventory level of three years ago. High inventory levels have kept the prices low, “Days on Market” high, and sellers reaching for Maalox.

Homes Sold

There were 2,875 homes sold in the first nine months of 2007, which was down 647 (-18.4%) from last year. All local areas (Albemarle -17.8%, Charlottesville -25.6%, Fluvanna -21.5%, Greene -34.7%, Louisa -18.5%, and Nelson -21.5%) posted lower sales than the same period last year. Looking at the past 6 years (see chart below), our region has returned to a sales level just above 2003 – which was a record at the time.

New Construction

New to the CAAR market report this year is a look at the number of new homes that were sold through the CAAR MLS system. It is important to note that many “new” homes are not included in this statistic. It is very common for a buyer to contact a builder directly to custom build a home. As a rule, new home statistics tend to lag behind the rest of the market as far as trends are concerned. New home sales peaked in 2006, a year after the overall market. New construction, both locally and nationally, slowed dramatically in mid-2006. If the record traffic of home shoppers at the recent Blue Ridge Home Builders’ Parade of Homes is any indication, new homes sales are poised to make a recovery.

Median Sales Price

It may come as a surprise to some that the median price of homes in our area actually increased in the first three months of the year. Remarkably, Charlottesville’s median price was up a whopping 17.2%. Before all you city dwellers get excited, there are a few explanations. First, the city had a lot of modestly priced condos sell last year, which lowered the median price. Second, there has been a significant amount of new construction in the city this year with price tags from $300,000 to $500,000. Finally, 25% fewer homes sold this year, which makes the middle of the market (otherwise known as the median price) more susceptible to dramatic change. It would be a mistake to assume that real home prices went up 17% in the city.

Overall, the median price rose $5,100 (+1.9%). Albemarle (-1.8%) and Louisa (-0.8%) were down slightly, but all other areas were up after three quarters. Other area increases were modest – Fluvanna (+4.7%), Greene (+1.9%), Nelson (+3.4%).

Days on Market (DOM)

The high inventory of homes for sale has created a “tale of two cities” for DOM. Homes that have sold this year, sold quickly, but many homes have been on the market much longer than the average. The median DOM for homes that sold through the 3rd quarter is just 59 days. By contrast, the median for homes on the market is 110 days. A third of the homes still on the market have been there for more than 150 days and a quarter of the homes for sale right now have been on the market more than 200 days. There are many reasons for this dichotomy of DOM, but the main reason is probably price. The axiom in the real estate industry is, “Any home will sell quickly if it is priced correctly.”

Inventory of Homes for Sale

The inventory of homes for sale in the Charlottesville area has been a key factor in the local market for the past several years. Inventory levels are generally a good indication of where home prices are going. In the early part of the decade, we saw extremely low inventory levels of around 4 or 5 months of supply. This caused home prices to soar, as buyers were forced to make aggressive offers to purchase the home they wanted. Today, we have a 20-month supply of homes on the market, which is very high and possibly a record. We are just entering a quieter selling season with the holidays approaching, so we will likely see a continuation of high inventory into the spring. First-time buyers, who don’t have a home to sell, have an extraordinary opportunity in this market.
Currently, we have 3,471 homes on the market and the median price of these homes is $329,000. The average DOM of these homes is 126 days. There are 588 homes for sale under $200,000 with an average DOM of 120. There are 262 homes currently on the market priced at a million dollars or more with an average DOM of 154.

Condos and Townhomes

The explosion of condominiums and townhomes in 2005 and 2006 appears to be over. Most sales of attached homes are in Charlottesville and Albemarle, so this report covers only those areas. The charts below show the attached homes sold in the first nine months of 2007 compared to past years. Inventory levels of attached homes for sale are still high, with 438 listed for sale in Charlottesville and Albemarle. This over-supply is presented in the 151 average DOM for the attached properties currently on the market compared to the 125 days for detached homes in Charlottesville and Albemarle. The median price of an attached home is $259,500, which is much lower than detached homes on the market.

Price Per Square Foot (Finished)

Looking at the average price per square foot of finished space in homes is interesting, but should not be relied on as a scientific number. The averages in this section of the report include the cost of the land, which varies greatly based on location and amenities. A lot at Wintergreen with fantastic views of the valley costs much more than a lot in other parts of Nelson. With that said, the numbers in this section continue to reflect the softening of prices we have seen in 2007.

Nelson County, thanks to the large number of resort properties, has consistently led the way in price per square foot, with Charlottesville generally second. City homes are higher than other areas, simply because they are located more conveniently to U.Va. and downtown. As the saying goes, there are three things that matter in real estate – location, location, and location.

Conclusions and Predictions

The seasonal aspect of the Charlottesville area real estate market allows us to draw year-end conclusions based on the first three quarters. The balance of the year is the “slow” time for sales, so unless there is a dramatic real estate swing, the third quarter will be reflective of the year-end situation. That means we will end the year with the 4th highest year for sales reported to the CAAR MLS. Prices will continue to rise slowly and inventory will continue to be the big story in the market.

Sellers looking for a return to the sales pace of 2005 will be disappointed with my prediction for the future. I do not see inventory levels dropping to reasonable levels for the next 12 months (at least). That means sellers will be challenged by a lot of competition. Sellers will need to listen to the advice of their REALTOR® and price the property competitively. Buyers will continue to have extraordinary opportunities for the foreseeable future. With any luck, we may all be surprised by the strength and resiliency of the local real estate market by the time the spring market hits its stride.

For more information on this report or the real estate market, visit http://www.theaverygroup.com/ or contact Rob Alley of The Avery Group at (434) 975-9000 or info@theaverygroup.com.

3rd_Quarter_Market_Report[1].pdf

Real Estate

written by Dave Phillips, CEO of CAAR