Fewer Listings Should Push Prices Higher

Only 4,000 homes were listed in the DC area in January. That is the best news sellers could ask for. As a result, we should see more competition among buyers this year. That is welcome, because buyer competition is the thing that pushes prices upward.

DC area listings fell 4 percent compared to January 2012—which doesn’t sound like a big deal. But compared to January 2008, listings were down 62 percent. The huge number of listings we saw several years ago is what caused the market to slow and pushed prices down. Every year since, we have been encouraged by the steady decrease in home listings and increasing sales activity.


Bottom line: Home prices are more likely to rise this year because the smaller inventory will force DC-area buyers to compete for the homes that are available.

Baltimore’s listings have also fallen since 2008. Last month’s listings were 36 percent lower than January 2008—not as sharp a drop as we saw in DC. Baltimore-area listings actually increased in January, rising 6 percent compared to January 2012.

Consider, also, that Baltimore-area contracts grew just 3 percent in January. That imbalance—with listings rising faster than sales—will not help Baltimore if it continues. It would only put a damper on buyer competition.


By contrast, the DC area enjoyed a 5 percent increase in contract activity in January. If contracts continue to rise while listings fall, DC-area buyers will face the stiffest spring competition since 2006.

Source: RBI, an MRIS company. Originally posted by Chris Sicks, who has reported on the Washington-Baltimore real estate market for 20 years.

Top Five Markets for Home Sellers

Realtor.com recently published a list of the top five markets for home sellers, and Washington, DC, ranked as number five on the list. In the past year, list prices in DC have increased about 16 percent, while inventory has dropped nearly 31 percent. Those are some great numbers for sellers, and if you're looking to buy, it's time to get in the game before prices rise much more.

Here are other cities that made the list, all out West:

4. Phoenix-Mesa, Ariz: List prices +24%, Inventory -16%
3. San Francisco, Calif: List prices +20%
2. San Jose, Calif: List prices +25%
1. Sacramento, Calif: List prices +40%, Inventory -67%

New Transportation Bill in VA Affects Real Estate

The Virginia General Assembly passed historic legislation to secure a comprehensive, long-term transportation funding and reform package for Virginia. We would like to thank all Virginia’s REALTORS® who answered the call to action on transportation. Your response helped make this historic legislation pass.

Transportation is a critical issue for Virginia. Without reliable roads and public transportation systems, the state becomes less attractive for businesses looking to move or expand. Realtors asked VAR to help push for a change to the state’s transportation funding and we obliged.

The bill would eliminate the $0.175 per-gallon gas tax that consumers pay at the pump, and it raises revenues through a variety of new and increased taxes:

• A new 3.5% tax on gasoline at the wholesale level (about $0.12 per gallon at current prices)
• A new 6% tax on Diesel at the wholesale level
• Raising Virginia’s sales and use tax from 5 percent to 5.3 percent
• Raising the motor vehicle sales tax from 3 percent to 4.3 percent over five years
• A new $100 annual tax for hybrid, electric, and alternative fuel vehicles (except for those powered by natural gas).

The plan is expected to raise about $880 million a year by 2018 (or $3.5 billion over five years) much of it earmarked for transportation.

There are also “Regional Congestion Relief “ plans for the Northern Virginia and Hampton Roads areas, which includes the following:
In Northern Virginia, (Planning District 8 to be exact), additional transportation revenue will be created by implementing:

• An increase in the regional sales tax of 0.7%, for a total of 6%
• An increase of 3% in the Regional Transient Occupancy tax (Hotel/Motel Tax)
• An increase to $0.35 per $100 in the regional grantor’s tax from the current $0.10 per $100

In Hampton Roads (click here to see areas included), additional transportation revenue will be created by implementing:

• An increase in the regional sales tax of 0.7%, for a total of 6%
• An increase in the local gas tax of 2.1 cents

These additional taxes are expected to raise between $300 to $350 million annually for Northern Virginia and between $175 and $219 million per year for Hampton Roads by 2018.

Source: Virginia Association of Realtors

More Good News for First-time Homebuyers

On May 29, the Department of Housing and Urban Development (HUD) announced that FHA will allow first-time buyers to apply their up-to $8,000 tax credit toward closing costs when buying their home. (To see the news release, go to http://www.hud.gov/news/release.cfm?content=pr09-072.cfm.)

Purchasers will still have to pony up 3.5% out of their own pocket for the down payment. But they can take whatever money they would receive in the form of the tax credit and apply it toward closing costs or add it on top of the 3.5% they’ve already put down.

Closing costs can be a deterrent to homeownership, so this is good news. Of course, it’s a government program, so there are lots of rules to follow. But if you have a qualified lender, they’ll be able to help you navigate the maze and come out of it with a home and maybe even some cash left over in your bank account. Looks like a win-win to me.

Tiny Varner is a licensed Realtor© in Virginia, Maryland, and the District of Columbia. She loves her job.

FHA Myths and Misconceptions

Homebuyers, FHA is back in vogue. Back in the bubble years, FHA financing was the red-headed stepchild of the mortgage world because borrowers could get better interest rates and terms using conventional financing. But as underwriting standards have tightened, FHA is more Christina Applegate and less Marla Hooch.
Because it’s been so long since we’ve paid attention to FHA, I’d like to clear up some myths and misconceptions concerning the program. One myth: that FHA is for first-time buyers only. Yes, a lot of first-time buyers are utilizing the program because the down-payment requirement is just 3.5%, but everyone is welcome to join in the party.
Another misconception is that FHA is only for buyers with questionable credit. It’s true that your FICO score can dip a little lower with FHA, but again, no one is excluded for having a great credit score. Seriously, how silly would that be?
Some folks also think you have to go through some sort of homebuyer educational program to qualify. Again, not true. Any idiot can apply for FHA financing.
FHA financing being more expensive than conventional financing is another (sometimes) myth. At high loan-to-value ratios, conventional financing can be more expensive due to the rising costs of conventional mortgage insurance, says Jim Semeyn, a loan officer for Bank of America. At lower LTVs, conventional may be the way to go if you have more than 3.5% for the down payment, but check out both options before committing to any one loan program.
I’m sure there are many other FHA myths floating around out there. For more information about FHA financing, go to http://www.hud.gov/buying/loans.cfm. And if you still have questions after visiting the site, any good loan officer should be happy to get you some answers.

Tiny Varner is a licensed Realtor in Virginia, Maryland, and the District of Columbia. She loves her job.

Dulles Metrorail Information

For those of us who live/play/work in and around Tysons Corner, Va.

Unless you’ve been in a coma for the last few years (and if you have been, my sympathies, but I’m glad you’re back), you’ve heard about the Dulles Metrorail project that is happening in Tysons Corner.

You’ve probably already sat in worse-than-usual traffic along Route 7. I didn’t think worse traffic was possible, but it turns out that ripping up the service roads did the trick. We now have lunchtime rush-hour delays. I am limited to running errands from 8pm–10pm. Sweet.

If you’re like me, you’re wondering what’s going on and what’s going to happen as the project progresses. For information, go to www.dullesmetro.com.

Here you’ll find maps (I love maps) showing the locations of future stations and recent news about the project. If nothing else, visit the site for the traffic advisories.

We’ll have to live with a few years of growing pains, but here’s hoping it makes Tysons a better place to live/play/work. Until then, sit back and enjoy the ride.

Tiny Varner is a licensed Realtor® in Virginia, Maryland, and the District of Columbia. She loves her job.

Avoiding Foreclosure

Anyone who has been watching the news or reading anything to do with the economy and/or real estate knows that we’re living in a bleak economic time. I won’t rehash all the gory details here as it’s not my intent to bring anyone down.

So for everyone out there who is staring foreclosure in the face, please know that it doesn’t have to be a foregone conclusion that you’re going to lose your home. If you lie awake at night and worry about becoming one of the newly homeless, there is some hope. HopeNow.com, to be exact.

HopeNow “is an alliance between HUD approved counseling agents, mortgage companies, investors and other mortgage market participants that provides free foreclosure prevention assistance,” according to the website.

You can thank the Department of the Treasury and the U.S. Department of Housing and Urban Development for this little nugget. They encouraged lenders, investors, and non-profits to form this alliance to try to stem the tide of foreclosures that has been inundating your local housing market.

In addition to the website (http://www.HopeNow.com) they also have a phone number you can call: 888-995-HOPE (4673).

If you’re facing foreclosure, quit dilly-dallying and ask for help. And if you have a friend or family member who is facing foreclosure, please along this information. Now.

Tiny Varner is a licensed Realtor® in Virginia, Maryland, and the District of Columbia. She loves her job.