Selling Charlottesville real estate in Central Virginia since 1927
Listen to Crown Mortgage's Jason Crigler and Michael Martin talk about what purchasers need to know in preparation for buying a home in Charlottesville and the Central Virginia area.
http://www.wina.com/play_window.php?audioType=Episode&audioId=5029285
Enjoy listening to the radio show about Wintergreen Resort with Brian Chase and Virginia Tahboub
http://www.wina.com/play_window.php?audioType=Episode&audioId=5020663
Anyone who has read this blog or listened to my radio show www.facebook.com/realestatematters won't be suprised when you read the two articles linked below. Although these articles talk about Central Virginia (including Richmond) and other parts of the country, what is being said holds true to Charlottesville as well. You can also listen to the podcasts of the show at http://www.wina.com by clicking on podcast header and going to Real Estate Matters with Michael Guthrie
http://progress-index.com/news/home-sales-dip-after-tax-break-expires-but-prices-edge-higher-1.1060759
Read the preceding post and then listen to the podcast from my radio show http://www.wina.com/play_window.php?audioType=Episode&audioId=4992098 on http://www.facebook.com/realestatematters
the market continues to be a challenge but there are reasons to be somewhat optimistic about what the next year or two will bring.
There are signs showing that the housing market may begin a recovery in 2011. Richard Smith, CEO and President of Realogy Corportation (a company that owns Coldwell Banker, ERA, C-21, Better Homes and Gardens, and Sothebys) said last week he expects 2011 to mark the end of what will then be an almost 6 year real estate downturn. He conditioned his remarks by saying he doesn't expect the change to happen until later in the year and into 2012. I found these comments in Suntrust's Market Update this week.
Mortgage rates may be as low as they will go, with the average 30-year fixed-rate home loan on course to rise after months of hovering near historical lows. The Mortgage Bankers Association predicts rates on the 30-year fixed-rate mortgage will average 4.4% in the fourth quarter of 2010, increasing to 4.7% in the first quarter of 2011 and climbing to 5.1% by the end of next year. The prediction is barring any ‘blockbuster’ announcement from the Federal Reserve in November according to the association’s chief economist Jay Brinkmann. The Federal Reserve is expected to announce further action to simulate growth, however the market has already priced the move into current rates in anticipation of the action. If the Fed’s action is delayed or is less than anticipated, a rate increase could come sooner. Brinkmann expects almost a 30% pickup in purchase originations next year, yet the purchase volume in 2011 will still only be roughly equal to 2009 levels. 2012 is expected to bring greater improvement with originations increasing 80% over 2010. The MBA forecast also predicts home sales will rise slightly next year, after dropping in 2010 from 2009 levels. Sales of existing homes will finish 2010 about 8% lower than last year, but sales will rise 2% next year and 16% in 2012. Sales of new homes will finish this year about 13% below 2009, however sales should rise 20% next year and 40% in 2012.
Brinkmann stated, “We also see some upward indication on prices in many markets.” Nationally, prices are expected to decline 1% next year, however that number is weighed down by severely troubled housing markets in areas like Florida and California. Price changes are expected to vary more by regions than in recent years. There has been a large decline in household formation throughout the country with many choosing on their own to share a roof with family or a roommate due to financial concerns. Many of this group are expected to relocate as soon as the economy improves and the job market turns positive. Simply said, there is a great deal of pent up demand that will likely respond quickly when jobs are created rather than lost, whether it is 2012 or sooner
Interestingly, Liz Ann Sanders,a Schwab strategist, was quoted this week as saying her company has recommended that the Feds consider raising interest rates. Her point was, "There are alot of negative implications of zero percent interest rates. It's a disincentive to savers and there's no rush for banks to lend or borrowers to borrow as folks think Rates are zero now, they'll be zero 3-6 months from now. What's the rush?"
If these trends are correct and housing prices are stabilizing and there is pressure for interest rates to go up, then folks who want to buy should start watching carefully. These next few months may be what everyone has been waiting for and it may very well be the time find yourself a home.
