CAAR Blog

April 1, 2009

NAR Reports Big Gain in Pending Home Sales

Filed under: Affordable Again, Market Reports, Real Estate — CAAR @ 1:19 pm

We have been hearing antidotal evidence that the real estate market is seeing a surge in activity.  Now, NAR is reporting that there is statistical evidence to back of the positive market vibes we have been feeling both locally and nationally.

From the article:

“Pending home sales have a way to go for there to be a meaningful increase, but recent increases in shopping activity are hopeful indicators that we’ll see additional sales gains,” he says. “More buyers are getting into the market to take advantage of stimulus incentives and much improved housing affordability conditions, but it will take a few months before we could see this turn up in measurable sales contract activity.”

Read the article at Big Gains in Pending Home Sales.

September 15, 2008

HUD Announces Revised Downpayment and Maximum Mortgage Requirements

Filed under: Affordable Again, Home Finance, Press Releases, Real Estate — CAAR @ 10:05 am

(from NAR)

On September 12, 2008, the US Department of Housing and Urban Development (HUD) released Mortgagee Letter 2008-23 outlining new downpayment and maximum mortgage requirements as found in the Housing and Economic Recovery Act of 2008 (HERA). This letter implements three new requirements:

  1. mortgagor will pay in cash or cash equivalent not less than 3.5 percent of the appraised value of the property;
  2. the variable loan-to-value (LTV) limits that were based on the combination of property value and average state closing costs (known as “downpayment simplification”) is eliminated; and
  3. the Federal Housing Administration (FHA) insured first mortgage is limited to 100 percent of the appraised value and requires the inclusion of the upfront premium within this limit. The revised requirements take effect for all new FHA case number assignments on or after January 1, 2009.

The mortgage letter states that closing costs may not be used to help meet the minimum 3.5 percent downpayment requirement. The LTV is 96.5 percent (the reciprocal of the 3.5 percent downpayment requirement). However, when combined with an FHA first mortgage, government subordinate liens are not limited to 100 percent. Sellers are still permitted to provide financing concessions of up to 6 percent of the sales price. Refinances, including FHASecure, are not subject to the 3.5 percent downpayment requirement as there is no “downpayment” on a refinance.

August 13, 2008

PHA to Hold Public Workshop at CAAR

Filed under: Affordable Again, Press Releases, Real Estate — CAAR @ 3:56 pm

FREE & OPEN TO THE PUBLIC-Join Us- Become Informed!

· Credit IQ—do you know your “Credit Score” and what it means to you? Can you read your Credit Report?

· Learn tips on how to Avoid Predatory Lending Practices and work with responsible lenders; and

· Learn about your Housing Rights!

Tuesday, September 2, 6:30 p.m. to 8:30 p.m. at

Charlottesville Area Association of Realtors (CAAR)

550 Hillsdale Drive, Charlottesville, VA

This session is designed to educate our community about credit, credit reports, credit scores, problems of predatory lending, Get tips on how to work with responsible lenders and how to become a responsible borrower and knowing your housing rights.

Call 434-817-2436 to reserve your seat or email at info@piedmonthousing.org

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May 30, 2008

What “Affordable� Looks Like

Filed under: Affordable Again, Real Estate — Dave Phillips @ 4:18 pm

(preview of next week’s Real Estate Weekly cover story)

It is easy to talk about the 1,200+ homes on the market that are generally considered “affordable� (priced under $250,000) and conclude that we have turned the corner on the affordable housing crisis we faced just 18 months ago. Indeed, this is a great time to buy if you are a first-timer or if you are simply looking for an affordable home. Prices have come down and good financing is still available for those who have decent credit. That’s an easy reality for everyone to understand, but there is more to the story than numbers. What does the inventory of “affordable homes� look like in the Charlottesville area and where are these homes located?

Where to Find Affordable
There is an age-old saying in real estate that it’s all about “location, location, location.� Where a home is located – the school district, county or city, waterfront, mountain view, etc. – is probably the most important factor in determining the price of a property. This is true for million dollar homes or affordable condos. The “better� the location, the more expensive the property. A home on Rugby Road is worth considerably more than the exact same home in Rust Hollow. Typically, homes closer or more convenient to the community core (where jobs and services are located) are more expensive. To be more exact, the land that the home sits on is more expensive. Land in Rust Hollow is much more affordable than land on Rugby Road.

There are affordable housing options in the core areas, but they are different than those found in outlying areas (more about that later). For instance, there are over 120 homes on the market within the Charlottesville city limits that are priced at $250,000 or below. That is not only an adequate inventory, but it could be argued that we have a surplus of affordable homes for sale in the city. If you expand your definition of “close to the core,� and look for affordable homes within 10 miles of U.Va., there are 401 currently on the market. At 20 miles, you have 635 affordable homes on the market. Clearly we have plenty of affordable homes on the market for first-timers and others who want to purchase an affordable home.

If living near the core area is not an issue, you have many more options. Two-thirds of the 1,200+ affordable homes on the market are more than 10 miles away from U.Va. Waynesboro and Louisa have emerged as affordable havens over the past few years and Greene and Fluvanna have offered a good supply of affordable properties for many years. Land costs are generally much less in these outlying counties, so buyers tend to get more house for their money in these areas. The chart below will show the historic trend of what each county offers on a price per square foot basis.

Price Pre Sq. Ft. of Homes Sold in First Quarter 2008
County
 2002
 2003
 2004
 2005
 2006
 2007
 2008
Albemarle
 117
 124
 140
 155
 173
 174
 177
Charlottesville
 104
 117
 139
 172
 186
 186
 194
Fluvanna
 85
 99
 100
 121
 141
 135
 137
Greene
 97
 97
 115
 133
 148
 157
 146
Louisa
 83
 108
 106
 122
 147
 142
 149
Nelson
 115
 129
 155
 193
 232
 206
 199
Area Average*
 106
 119
 131
 150
 169
 166
 165
Central Valley**
           131
 121

*includes sales outside the counties listed
**Homes in the Staunton/Waynesboro area
 

Condo or Detached
Buying a home is more about lifestyle than anything else. Do you want to live in the country and wake up to roosters, or do you want to be able to walk to the Downtown Mall? Another lifestyle decision you can make is to live in a condominium or in a single family detached house. If you want to live in a detached affordable home, your selection is more limited, but still more than adequate. There are 135 detached homes for sale within 10 miles of U.Va. with a price tag at $250,000 or below. Within the city limits, there are 57 affordable detached homes for sale. Not bad.

If you are interested in a condo lifestyle (can you say, “No grass to mow�), there are a plethora of homes on the market close to the core. There are 66 attached affordable homes on the market within the city limits and 266 within 10 miles of U.Va. So, maybe you can’t afford a home on Rugby Road, but you also don’t need to move to Rust Hollow to find an affordable home (detached or condo) if you want to be in or near the core area. Of course, Rust Hollow offers its own benefits and you will not find a condo for sale there. In fact, you will be hard pressed to find a condo for sale outside of Charlottesville and Albemarle (except at Wintergreen).

Condo living offers a lifestyle choice, but it is also the real estate market’s answer to affordable housing. As mentioned earlier, land costs near the core have driven property values up, and condos represent a more cost-effective use of land. Evidently, there is no market demand for country condos, because there are very few condos located outside of the core. But maybe someday we will have the Country Condos at Rust Hollow. Sounds like a delightful combination of two lifestyle choices to me.

New Affordable Homes
Now that we have defined the two main lifestyle choices affordable homebuyers need to make, let’s look into the effect a home’s age has on the equation. It could be argued that buying an older home is a lifestyle choice as well, but since these are affordable homes and not an antebellum plantation, we will disregard the lifestyle issue.

As a rule of thumb, new homes cost more than older homes. There are a variety of reasons for this rule, but there are offsetting positives and negatives between new and previously lived-in homes. For instance, you may think more efficient heating and cooling systems are worth the extra money, or you may enjoy the mature tree cover of an older home and are willing to disregard the lack of central A.C. There are no right or wrong answers in the new or old decision. It comes down to your personal preferences and tastes.

There are some limitations created by the higher costs of new homes. Currently on the market, there is only one newly built, detached affordable home in Charlottesville or Albemarle. Land costs and development requirements make it almost impossible to build a detached home in the core market for $250,000 or below. The only way to build new affordable homes in these high-cost areas is to build condos and townhomes. There are new homes on the market in the affordable range in Staunton/Waynesboro (20), Louisa (19), Buckingham (18), Fluvanna (15), and Greene (10). So, if a new home is your preference, you will likely need to locate away from the core.

That leaves affordable homebuyers with several choices. You have over 1,200 properties to consider in the Charlottesville area. Will you buy one of the 381 affordable condos on the market, or one of the 910 detached homes priced at $250,000 or below? Will it be an older home or a condo close to the core area, or would you prefer a newer home in an outlying area? The good news is that you have lots of choices. The bad news is that you will not be buying a brand new home on Rugby Road for under $250,000. Whatever choice you make, your life and your net worth will become richer.

Yes It IS a Good Time to Buy!!!

Filed under: Affordable Again, Real Estate — Dave Phillips @ 2:52 pm

 Price Reduced

By Judy Savage, CAAR President

Affordable Again homes are open the next two weekends, May 31st and June * 1  and workshops are available to potential buyers at the Omni hotel in the next few weeks too. Why is CAAR supporting this Affordable Again program?  Yes, I have gotten emails from several intellectuals who claim the entire program is self serving and that we shouldn’t be encouraging first time buyers to enter what appears to be a declining market.  Their argument is that these buyers are naïve and we a preying on their stupidity.  I beg to differ.  Now, is a great time to buy a home, especially if you are a first time buyer.   I haven’t seen so many homes available under $250K in many years.  Our partners at Piedmont Housing Alliance (PHA) and the Regional Housing Committee have thousands of dollars of down payment assistance to help consumers buy homes.  Yes, of course there are income limitations but you would be surprised who might qualify.  CAAR has a Workforce Housing Fund that helps teachers, nurses, firefighters and police officers with down payment assistance to help them live in the areas in which they serve. 

Today, Sellers are much more negotiable and are usually willing to assist buyers with closing costs and other incentives to help purchase their homes.  Interest rates are still low. Do you know how much your house payment would go up on a $200.000 mortgage if the rates go up 1%?  Your monthly payment could go up $131!  So, you are worried that the house you are looking  at could actually go down another $10,000 by next year…hum….well if the interest rates go up 1% and the house went down $10 grand more your principal and interest payment would not change at all! 

Did you also know that the Federal Reserves say that homeowners have more net worth than renters, by about 46%.  Did you also know that, on average, home prices double every ten years?  So think about it…You buy a house and you invest $25,000 of your money or in down payment assistance from PHA, in ten years that house you paid $225k for is now worth $425K to $450K.  Your profit is $250,000.  Your house doubled in value but YOUR investment  of $25,000 is now worth anywhere between $200,000 and $250,000.  Could you get that kind of return at the stock market?  In addition to that, your Uncle Sam gave you a tax deduction each year on the interest you paid and on the real estate taxes. 

Every real estate market is different so don’t pay attention to the national news.  Charlottesville has a sound economy and with expansion at the University and the influx of people coming to NGIC next year, inventories are bound to be reduced and prices will then again begin to rise.  Real estate is a long term investment and it builds security for you and your family.  Homeowners help build communities and become more involved in the volunteer activities and political and charitable events.  Home is where the heart is.  For more information on homeownership visit www.housingmarketfacts.com and for more information on our Affordable Again campaign visit www.affordableagain.com  

April 28, 2008

Save a House, Ride a REALTOR®

Filed under: Affordable Again, Market Reports, Real Estate — Dave Phillips @ 2:34 pm

(If you are not a country music fan, you may have a serious character flaw, but that is the subject of another post on another Blog.  For now, here is a video that will help you “get� the title of this post.)

Save a Horse, Ride a Cowboy


Across the nation, in most markets, we not only have too many listings, we also have too many overpriced listings.  It is true in Charlottesville; it’s true in Atlanta, Austin, and Atlantic City.  I know it is true even without looking at the local statistics for all these markets because “too many listings� and “too many overpriced listings� goes hand in hand.  The basic law of economics – supply and demand – dictates that prices will adjust downward when supply is too high.  Following that logic, what we need is a good old fashion INVENTORY REDUCTION SALE!  Can you picture this ad as part of the NAR public awareness campaign?“Hi, I’m Charles McMillan, President of the National Association of REALTORS® and I’m here to announce an across the board 30% reduction in home prices.  That’s right, this is the REALTOR® Spring Spectacular event of a lifetime.  Buy before July 1st and save BIG on any home in any market.�

Okay, that’s not going to happen, nor could it.  The real estate market is not like the market for toilet paper at Wal-Mart.  In real estate, we have something like five million owners (sellers) of the “company� that would have to approve an across the board price reduction.  That’s a lot of decision makers even by Wal-Marts standards.

Some sellers have figured out the economics of the current market and agreed to price their home correctly.  Guess what?  Those are the homes that are selling.  In the CAAR MLS, homes that sold in March sold after and average of 130 days on the market (DOM).  That’s not a particularly good number, but it beats the 149 days (and counting) that the current active inventory is averaging for DOM.  In addition, a closer look at the numbers will show that many of the homes that sold in March, sold quickly; likewise, many homes that are currently on the market have been there a very long time.

My Way or the Highway

So, why are there so many overpriced homes on the market?  Is it unrealistic sellers, or REALTORS® that are willing to take overpriced listings?  Yes, to both I suspect.  Sellers, if you really want to save your house from being stuck on the market, ride the advice of your REALTOR® and agree to a proper price.  A proper price is one that reflects the current market and not one that is based on what you want/need.

REALTORS® also need to accept their role in adding to the overpriced inventory.  Most experienced REALTORS® will tell you the best thing (and the hardest thing) to do when a seller insists on pricing a property too high is to walk away.  Maybe if a seller has a few REALTORS® show them tough love, then they will start to understand that the market sets the price at which a home will sell, not the seller.  In addition, allowing a seller to overprice their home is a disservice because it generally results in a seller netting less than could have been gained with a quick sale.

In this market, more than ever, REALTORS® are in position to help the bottom line of both buyers and sellers.  Buyers need to be careful not to buy overpriced listings and sellers need to understand this rapidly changing market.  Save a house, ride a REALTOR®.

 

 

April 25, 2008

Homes Are Affordable Again

Filed under: Affordable Again, Real Estate — Dave Phillips @ 3:43 pm

On May 1st, CAAR and a couple dozen partners and sponsors will kick off a program named Affordable Again.  This program is so big and exciting that the Daily Progress sniffed out the story a couple weeks before the official launch.  Here is the official press release, but if you want the quick scoop, this post will give the who, what, where, when why, and how.

houseWho?
CAAR has teamed up with the Blue Ridge Home Builders, The Chamber of Commerce, NBC29, the Charlottesville Radio Group, and the Piedmont Housing Alliance to put together this multi-faceted program.  In addition, Crutchfield, Ryan Homes, UVA Community Credit Union, and many other sponsors have put up cash and prizes to bring some real zing to the promotion.

What?
The Affordable Again program has four major initiatives aimed at generating interest and excitement in potential first time home buyers.  The four components of the program include 1) agent education on the down-payment assistance and other financing programs for first time buyers; 2) first time home owner workshops by the Piedmont Housing Alliance (PHA) to prepare buyers to seize the enormous opportunities in this market; 3) two weekends of Affordable Again Open Houses featuring many of the 1200 homes on the market under $250,000; 4) Savings Certificate program to offer discounts to home owners and buyers.

Grand Prize – To add excitement to the entire program, a $6700 grand prize package has been assembled.  The package includes a home theater, $1000 in cash, two $500 gift cards, estate planning services, and free removal of a truckload of junk. In addition, the three finalists who don’t win the Grand Prize will each get a $500 gift card.

Where?
This is a regional promotion.  CAAR is hosting the agent training at the REALTOR® Resource Center and the Piedmont Housing Alliance will host the public workshops at the Omni Hotel.  The Affordable Again Open Houses will be held from Waynesboro to Louisa, and the Saving Certificates will be available in the Real Estate Weekly and at the workshops and open houses.  Registration for the grand prize will be available at the open houses and the public workshops.  Finally, the four finalists for the Grand Prize will be invited to the B.B. King Benefit Concert for the CAAR Workforce Housing Fund for the selection of the big winner.

When?

  • The agent education – Affordable Housing Advisor – has already started and will continue well into the future.
  • The PHA workshops will be held Thursday, May 29, Saturday, May 31, Thursday, June 5, and Saturday, June 7.
  • Affordable Again Open Houses will be held over two weekends, May 31 – June 1 and June 7 – 8.
  • The Saving Certificate discounts will be available May 1 thru July 6.
  • The four finalists for the Grand Prize will be drawn on July 7th,  and the winner will be selected live on stage at the August 6th B.B. King concert.

Why?
The intent of this program is to draw attention to the incredible opportunity for first time buyers in today’s real estate market.  Despite the negative news in the national media, our local market is in good shape, particularly for first time buyers who do not have a home to sell.  There are hundreds of homes on the market that, thanks to the recent drop in prices, are Affordable Again.

How?
This program would not be possible without the many partners and sponsors.  Two dozen companies/organizations and hundreds of real estate agents will be involved during May and June.  There will be a major media campaign conducted with our media partners, NBC29, The Charlottesville Radio Group and the Real Estate Weekly.  There will also be a special Affordable Again web site with updates and a list of the open houses. 

The Affordable Again Campaign should be a great benefit to many in the community, especially the 3600 home sellers that will be helped if the program gets the real estate market moving and the first time buyers who will start developing wealth through home ownership.  There is no fundamental reason why the local real estate market is underperforming right now and since prices have fallen, many homes are Affordable Again!  It is a great time to be a first time home buyer.

AFFORDABLE AGAIN PROGRAM KICKS OFF MAY 1st, 2008

Filed under: Affordable Again, Press Releases, Real Estate — Dave Phillips @ 3:37 pm

April 25, 2008

FOR IMMEDIATE RELEASE
Contact:         Mary Elizabeth Allen, Director of Communications                        434-817-2396 or maryelizabeth@caar.com

AFFORDABLE AGAIN PROGRAM KICKS OFF MAY 1st, 2008

Joint Educational Program from Housing Advisors, Builders, Local Businesses & REALTORS® Seeks to Educate Public on Opportunities in Marketplace

CHARLOTTESVILLE, VA – The Charlottesville Area Association of REALTORS® (CAAR) has joined with the Blue Ridge Home Builders Association, the Chamber of Commerce, NBC29, the Charlottesville Radio Group, and Piedmont Housing Alliance (PHA) to launch a new educational program to the public called Affordable Again. The goal of this program is to educate first-time homebuyers, their REALTORS®, and others about what opportunities exist in the current market that may help potential buyers achieve the dream of home ownership.

CAAR President Judy Savage, of RE/Max Assured Properties, explains the initiative as having simple motivation. “There are a lot of programs available out there for first-time buyers, including down payment assistance, financing options, and more. If we can get the word out, those buyers can jump-start the real estate market and get things moving.�

The Affordable Again program has several major initiatives aimed at generating interest and excitement in potential first time home buyers. CAAR will focus on agent education by providing classes to REALTORS® on down-payment assistance and other financing programs for first time buyers. There are 80 agents currently enrolled in the Affordable Housing Advisor training program.

Piedmont Housing Alliance will work to educate the public, hosting first-time homeowner workshops aimed at preparing consumers for the process of purchasing a home. Those workshops will precede two weekends of Affordable Again Open Houses featuring homes on the market under $250,000.

Area businesses are supporting the program by offering Savings Certificates to those interested in the Affordable Again program. These businesses have agreed to offer a 20% or higher discount on a product or service to all Savings Certificate holders. Certificates will be available at the Affordable Again Workshops and Open Houses and in copies of the CAAR Real Estate Weekly. A complete list of discount providers and their offers is available on the Affordable Again website, www.affordableagain.com.

Businesses have also supported this program by donating products and services to generate interest and excitement. Anyone attending an Affordable Again Workshop or Open House will be eligible to enter for a chance to win a Grand Prize Package worth $6,700. Elements of the prize package were generously donated by Crutchfield, Ryan Homes, Tucker Griffin Barnes PC, UVA Community Credit Union, 1-800-Got-Junk?, and Court Square Title.

Workshops

Affordable Again Workshops will be held at the Charlottesville Omni and will be run by the Piedmont Housing Alliance. These workshops are free and open to the public and are scheduled for the following dates:

  • Thursday, May 29th, 6:00 pm – 7:30 pm
  • Saturday, May 31st, 10:00 am – 12:00 noon
  • Thursday, June 5th, 6:00 pm – 7:30 pm
  • Saturday, June 7th, 10:00 am – 12:00 noon

Open Houses

Affordable Again Open Houses will be held over the course of two weekends to give potential buyers ample opportunities to find the home that fits their needs and budget. These Open Houses are free and open to the public and are scheduled for the following dates:

  • Saturday, May 31st
  • Sunday June 1st
  • Saturday, June 7th
  • Sunday, June 8th

More information will be available on specific Open Houses and locations as the above dates approach.

The various groups supporting the Affordable Again endeavor believe this is an idea whose time is right. “Current market conditions lend themselves to opportunities that haven’t existed in more than five years,� remarks Savage. “Prices are down, sellers are more willing to negotiate, interest rates are low, and there’s no pressure to decide quickly or pay a premium price because you got in a bidding war.�

For more information on the Affordable Again program, please visit the program website at www.affordableagain.com or email info@affordableagain.com.

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