0
Votes

Homes for Sale

Real estate market is turning into a wholesale retailer.

Buyers, sellers, brokers and lenders are experiencing a different real estate market in Northern Virginia compared to a couple years ago, and everyone is trying to anticipate the next trend.

The slower market creates trends such as larger inventories, longer market-times and more price-reductions, making it a strong buyer’s market. Dave Meyers, owner of Meyers and McCabe Realtors, based in Burke, said foreclosures and short sales are the next real estate trend to look out for. Meyers sells homes throughout the county, many of which are sold in Fairfax, Burke, Clifton and Fairfax Station.

"All of these mortgage companies are going to have foreclosures that are going to double and triple in the next couple of years," said Meyers. "It’s going to be astronomical."

The City of Fairfax had three foreclosures in all of 2006, said Dorothy Bennett, the city’s real estate assessor. So far this year, there have been 11 foreclosures, she said. The foreclosures, so far, range all across the value scale, she said. One foreclosure was valued at more than $950,000, and several were in the $450,000-$550,000 range. On the lower end of the scale was a condominium property.

A GROWTH in the number of price reductions is also occurring, Meyers said. The sellers of homes that sit on the market for long periods of time end up slashing the prices in order to sell, he said. The Northern Virginia Association of Realtors reports that homes are taking longer to sell, compared to last year. The average Northern Virginia home in June of this year was staying on the market for 65 days, compared to 49 days in June 2006. In May, the average market time was 73 days, compared to 51 days the previous May.

Inventory, however, was lower in June 2007 than it was the previous year, according to NVAR.

Meyers has one home that’s been on the market for more than 120 days. The listing started at $1.5 million, and now it’s $1.2 million. The average sales price of homes in the region was $569,826 in June, down 1.53 percent from June 2006, according to NVAR data.

"We tried to get top price, but the market didn’t support it," he said. "Now they’re [practically] giving it away."

But advertising reduced prices isn’t as effective as it once was, said Meyers. When everyone is reducing prices, sellers have to focus on other selling points to attract buyers. Meyers is trying tactics like Realtor bonuses in order to sell homes more quickly, in addition to highlighting the amenities of each property.

"Realtors are greedy," he said. "They work hard for money."

DEPENDING ON THE NEIGHBORHOOD, or subdivision, the market is either booming or struggling, according to Terry Ghent, an appraiser in the city’s assessment office. Assessments in older neighborhoods are typically down from previous years, but newer neighborhoods like Farrcroft and Pickett’s Reserve, are holding strong. Assessments are determined based on market value, and newer homes typically enjoy higher numbers for both.

"It really depends on the subdivision," said Ghent. "Some selling prices we’ve seen are still over what we valued them at last year."

Determining real estate trends within the city, based on the slowing market, is "not such a cut and dry thing," said Ghent. Within each subdivision, different factors determine how well a home might do on the market. The style of the home, its condition or its age can all influence its success or failure. Cape Cods might be hot one year, while the next year it could be ramblers, she said. One thing for certain though is the choice available to buyers these days.

"Because there’s so many houses on the market now, they are staying on the market a little bit longer," she said. "There’s more choice; people are going around and looking at more homes before they buy."

SHORT SALES are much more prevalent than they were in recent years, said Meyers. A short sale is when a lender will agree to sell a property at a lower price than the loan amount, in order to minimize losses seen from foreclosures and bankruptcies. Meyers has had four short sales in the last 20 months, he said.

"Mortgage lenders give money to anybody; they work on commission," he said.

For example, Meyers has one home in which the owner bought it for $549,000. The homeowner, or borrower, obtained a second trust, and now owes $640,000. When they put the house on the market about five months ago, for $639,0000, it was one of the lowest prices in the neighborhood.

"Then everyone else put theirs on the market, and theirs were going for $550,000," said Meyers. "So I went to his mortgage company and negotiated a short sale. I told them I had a buyer for $450,000; you accept it and let him walk."

Meyers said lenders typically won’t consider a short sale until the loan has been in default for at least a couple of months. Once a buyer is in place, the deal happens quickly. Lenders agree to such sales because the losses are typically less than what they would be under foreclosure.

"Right now, this is what’s hot," he said.

OVERALL HOME SALES in the City of Fairfax were down 38 percent from 2005 to 2006. In 2005, 288 existing, single-family homes sold for an average price of $569,938. One year later, 201 existing homes sold for an average price of $554,867, according to Bennett’s data. New home sale statistics haven’t changed much though, compared to existing home sales. In 2005, 26 new, single-family homes sold in the city, at an average price of $1,155,881, compared to 21 sold in 2006 for an average price of $1,381,733. "Indications are that residential prices are not necessarily rising, but appear to be stabilizing somewhat," said Bennett, via e-mail to the Connection. "Houses are staying on the market for much longer periods of time."

Bennett said the statistics for 2007 show the number of sales appear to be on track to where they were in 2006. Prices seem to be stabilizing as well, over the last couple of months, she said.

In Burke Centre, a 30-year-old community, somewhat of a decline in home sales has occurred, said Patrick Gloyd, the Burke Centre Conservancy’s executive director. He said the decline hasn’t been too dramatic, but numbers were down over the course of the last year. While the slowing market might create new trends, it seems one trend never goes away in Burke Centre, according to Gloyd.

"Typically, the winter months aren’t as active in real estate," he said. "People typically try to pace their moves. If people have children, they generally like to move into new school districts during the spring or fall."

Burke Centre seems to hold steady during times of regional real estate distress though, said Gloyd. Homes sell relatively quickly in the community, he said, regardless of regional trends.