MORE Positive News about the Real Estate Market

While most financial news seems to be negative, here's some real estate news that is somewhat positive. Even though prices are still trending downward, the increase in buyers is an indication that we are at, or near, the bottom.


September new home sales rise by 2.7 percent
New home sales post unexpected increase as prices fall to lowest level in 4 years

AP
Monday October 27, 10:24 am ET
By Martin Crutsinger, AP Economics Writer

WASHINGTON (AP) -- Sales of new homes recorded an unexpected increase in September as median home prices dropped to the lowest level in four years, the Commerce Department reported Monday.
Sales of new single-family homes rose by 2.7 percent last month to a seasonally adjusted annual rate of 464,000 homes, Commerce said. Economists had expected sales would drop from the August level.
The median price of a new home sold in September declined by 9.1 percent from a year ago to $218,400, the lowest price level since September 2004, a period when home prices were rising rapidly as the country experienced a five-year housing boom.
The surprising increase in September sales still left them 33.1 percent below the level of a year ago as the country is battered by the worst slump in housing in decades.
The report on a rise in new home sales followed news last week that sales of existing homes rose in September by 5.5 percent, the largest monthly gain in more than five years.
Analysts are not convinced that the sales increases are signaling a bottom for the housing market. They note that the September gains came before the latest upheavals in financial markets which have raised new worries about the overall state of the economy.
Many analysts believe the country has already entered a recession. They are forecasting significant increases in job losses which will make it even harder to mount a sustained rebound in housing.
New home sales fell by 21.4 percent in the Northeast and were down 5.8 percent in the Midwest. However, sales rose by a sharp 22.7 percent in the West, a region of the country which has seen some of the biggest declines in prices, a development which has spurred sales. Sales were up 0.7 percent in the South.
The rise in sales left a total of 394,000 unsold new homes on the market at the end of September, down a record 25.4 percent from the number of unsold homes on the market at the end of September 2007.
Builders have been sharply cutting back on production, trying to get inventories more in line with sales.
Even with the latest drop in total unsold new homes, the inventory represents a 10.4 months supply at the September sales pace, still a historically high level.
The inventory of unsold existing homes is also remaining near historic highs as that market is being increased by a record wave of home foreclosures.
The 2.7 percent rise in sales for September new home sales followed a big 12.6 percent drop in August, which was revised sharply lower from the government's initial estimate. Sales in July had risen by 3.6 percent.

Amidst all the doom and gloom...SOME GOOD NEWS ABOUT REAL ESTATE!

This article was published in the The Fredericksburg Free-Lance Star, and shows that recent stats are beginning to show signs that the real estate market may be positioning itself to stabilize.

Increase in home sales raises recovery hopes
October 23, 2008 12:16 am
BY BILL FREEHLING
A trend of higher sales and lower prices in the Northern Virginia housing market has Realtors hopeful that the market will return to a more normal state by spring.
The Virginia Association of Realtors held a conference call yesterday to discuss sales and price data between July and September. Statewide, housing data are little changed from last year's third quarter, but the Northern Virginia market saw sharply higher sales and lower prices.
There were 1,067 homes sold in the Fredericksburg area during the third quarter, a 15.7 percent jump from the year-ago period. Median sales prices dropped 19.5 percent; they were $230,000 in September for the Fredericksburg area--which comprises the city and Spotsylvania, Stafford, King George and Caroline counties.
The Greater Piedmont, Dulles and Northern Virginia markets all experienced comparable percentage changes in the third quarter to the Fredericksburg area.
That trend, coupled with sharply reduced new housing starts, is bringing home inventory levels back to a more healthy ratio. For example, in the Fredericksburg area, there was an 8.8-month supply of houses in September, down sharply from the 20.6-month supply in January.
Realtors generally consider a 4- to 6-month supply of houses to be the sign of a healthy market, but the notable decrease in Fredericksburg and throughout Northern Virginia is one of the factors that Director Lisa Fowler of George Mason University's Office of Housing Policy Research pointed to as one of the "signs of strength" cropping up in the regional housing market.
The trend of rising sales and falling prices has been most extreme in Prince William County, which has been hit hard by home foreclosures. Third-quarter sales there rose 144.6 percent from the same period in 2007, while median sales prices dropped 42.4 percent.
Realtors on the call yesterday said the trend should continue in the fourth quarter and predicted that a leveling off of foreclosures and continued declines in new-home construction should stabilize the market.
Christine Todd, CEO of the Northern Virginia Association of Realtors, called 2008 "the year of the cleanup," as investors and bargain-seekers sweep foreclosures off the market.
Statewide, Virginia's economy and housing market are holding up better than nationwide, Fowler noted. Foreclosures in the state are mostly a Northern Virginia problem, with the region accounting for about 80 percent of Virginia's foreclosure activity.
Statewide, median home sales prices in the third quarter rose 1 percent from the same period a year ago. Sales dropped 4 percent.
Bill Freehling: 540/374-5405Email: bfreehling@freelancestar.com
Copyright 2008 The Free Lance-Star Publishing Company.

A Light at the End of the Tunnel...Good News from Alan Greenspan

Please take a moment to open this link, and read the article by Alan Greenspan, the former Chairman of the Federal Reserve. It's nice to see someone of prominence who has a positive outlook on the current financial conditions. As a Realtor, it's nice to see that Mr. Greenspan thinks the real estate industry will be the one to lead the nation out of this problem. Enjoy.

http://news.yahoo.com/s/nm/20081010/bs_nm/us_usa_housing_greenspan

New Conforming Loan Limits by State/County/City

Click on this link to determine the new conforming loan limits for your area.

If you have any questions, do not hesitate to give me a call at 703-864-0926. I'd be honored to help.

http://www.realtor.org/GAPublic.nsf/files/chart_hud_loan_limits_08.pdf/$FILE/chart_hud_loan_limits_08.pdf

Fed Raises Conforming Rate Limits

The following was taken fromm CNNMoney.com

Fannie, Freddie loan limits raised
March 06, 2008: 04:54 PM EST
Mar. 6, 2008 (Thomson Financial delivered by Newstex) --
WASHINGTON (AP) - The government on Thursday raised the limits for loans that can be purchased by mortgage companies Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) in more than 220 U.S. cities and counties.As result of the economic stimulus package signed by President Bush last month, the limits were temporarily raised to a new maximum of $729,750 for the continental U.S.Areas affected range from Flagstaff, Ariz., to Boston to Virginia Beach, Va. and include more than 20 rural areas, according to the Office of Federal Housing Enterprise Oversight, which regulates Fannie Mae and Freddie Mac.The stimulus bill raised the cap on mortgages that the government-sponsored mortgage companies Fannie Mae and Freddie Mac can buy or guarantee from the current level of $417,000. Higher limits apply in Alaska, Hawaii, the Virgin Islands and Guam.The change, designed to provide a lift to the strapped mortgage market, expires Dec. 31 unless Congress decides to make it permanent.Similarly, the Department of Housing and Urban Development made a similar change for loans backed by the Federal Housing Administration, where limits were raised to as high as $729,750 in expensive areas. The government said nearly 250,000 additional borrowers now will be able to buy homes or refinance into more affordable home loans and 75 cities and counties will be eligible for the highest limit.----Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Newstex ID: AFX-0013-23591259

2007 Home Sales Fifth Best in History!!!

The Federal Reserve and Mortgage Rates

Understanding What Causes Interest Rate Movement

Consumers are often misled when it comes to the subject of the Federal Reserve and how it affects mortgage interest rates. Often the media is the culprit causing the confusion. In the last few years, the Fed has taken action that caused mortgage interest rates to move in a direction other than what consumers expected, because the media provided weak reporting on the subject.The Federal Reserve affects short-term interest rate maturities, the Fed Funds rate, and the Overnight Lending rate. These factors have a direct impact on the Prime rate. If you took only this into consideration, you may mistakenly conclude that changes made by the Fed will cause a similar movement in mortgage interest rates. However, mortgage interest rates are dictated by the trading of mortgage-backed securities, which trade on a daily basis. The real dynamic at the heart of interest rate movement is the relationship between stocks and bonds.Stocks and bonds compete for the same investment dollar on a daily basis. There is literally only so much money to be invested. When the Federal Reserve feels that interest rates need to be decreased in an effort to stimulate the economy, this reduction in rates can often cause a stock market rally. When the market becomes bullish, the money to invest in stocks comes from the selling of mortgage-backed securities.Unfortunately, selling mortgage-backed securities to fuel stock market rallies causes interest rates to go up, not down.Historically, there have been many times when the Federal Reserve has increased interest rates. Stocks then sell off in fear that the increase will affect corporate profit margins, and the liquidated stock assets need a place to park until the next rally comes along. The safe haven is found in mortgage-backed securities which cause mortgage rates to drop.The daily ebb and flow of money is what matters most when it comes to the movement of mortgage interest rates. I make it a point to continuously monitor interest rates for my clients, and advise them of opportunities to manage their mortgage debt at a better rate. This is the foundation of my business model as a Trusted Advisor.Let's discuss how we can better educate our clients on the largest purchase they'll ever make!

"Here we go!"

This is my first venture into the realm of blogging, so please be gentle with me. I hope to use this blog as a vehicle to convey real estate related information, ideas, and MY OPINIONS, and that it will become a useful tool to all of you who use it. If any of you have any ideas on what you would like to see here, let me know. I'll do everything I can to provide you with that information you will find most valuable.

In the meantime, don't believe everything you hear or read about the RE market. Yes, home values have declined over the last 2 years. And yes, there are problems with the sub prime loan market. But, those problems represent a VERY small percentage of the RE market as a whole. On Nov 29, 2007, RealtyTrac.com reported that ONLY 1 in every 555 households in the US was foreclosed in Oct '07. In VA, it was ONLY 1 in every 1261 households...does that sound like a crisis to you?

If you have good credit and solid, proven income, NOW really is a great time to buy a home. Interest rates are VERY LOW, and home prices are at their lowest level in 3 yrs. Unless you have to sell a home that you owe more on than it is worth, this is a great market.