Archive for April, 2010

May 1: The morning after. Homebuyer tax credit expired. Now what?

May 1 is May Day. Could be an appropriate thing to say the day after the homebuyer tax credit expires, don’tcha think?

So here it is… Life after the homebuyer tax credit. For about two years now we’ve had this artificial economic stimulus at work in the housing market. Some say it helped the housing market avoid a complete collapse. Others say it was a waste of money, and simply moved up Americans’ home purchases by a few months. But in just a few scant hours: *poof!* it’s gone.

Mayday! Mayday! Don't worry, it's a model.A few weeks ago we reported on an unscientific Washington Post poll gauging public opinion on what will happen to home values starting today. Two thirds anticipated that we’re in for a dip.

What do you think? What happens now? It’s the topic of our upcoming July/August Commonwealth magazine. 

Leave a comment. Say something interesting and we might call you for an interview.

(photo credit. oh, and don’t worry: that’s a model plane)

 

Hot clicks from Commonwealth Online April 2010

VAR members clicked these five stories the most in the April 21 edition of Commonwealth Online

Good stuff you might have missed:

VAR’s Q1 home sales report is out. So how’s the housing market in Virginia?

Well, it depends on which market in Virginia you’re talking about. And even within markets, things can vary: one part of your community may be faring much better than another. The first quarter home sales numbers are in, and all across Virginia, some statistics are sweet, others are sour. Only one thing’s clear: There’s no sign we’re out of this housing mess yet, and that’s a fact that’s hard to swallow for Virginia homeowners. The good news is that some data seem to be signalling what could be the beginning of the end of the housing market’s woes.

When homeowners ask, “How’s the market?” what they really want to know is: “How’s the value of my house holding up?”

Based on the numbers in VAR’s report, it’s hard to say. Median prices statewide climbed 8.9% compared to the same period in 2009, but dropped back 1.5% compared to the fourth quarter of 2009. In fact, after three consecutive quarters of increases in the median sales price, this was the first decline – thus breaking the trend of steady price increases.

Foreclosures are still a problem.

Virginia posted 15,563 foreclosures between January and March, an increase of 6.1% over the last quarter of 2009. This is a huge issue for home values, because when a home goes into foreclosure, it can affect the value of other homes in the area.

Here’s the bottom line on our foreclosure problem: Jobs.

Unemployment in the Commonwealth is at its highest point in decades at 7.4%. Virginia’s doing better than 36 other states, but our unemployment rate is still high enough to prevent many homeowners with monthly mortgage bills from being able to pay them on time. So all of the sub-prime mortgage defaults that have gotten so much attention are being joined by a flood of normal mortgage defaults. It’s a double whammy, and Virginia’s home values are being held back because of it.

Experts agree that we won’t get out of this housing mess until unemployment retreats to normal levels. For Virginia, that would be a figure of about 4% or less. Getting there could take a long time.

What’s the outlook?

Don’t bet on a quick recovery. The first time homebuyer tax credit has just expired. As bad as the housing crisis has been, many believe this government housing stimulus plan has helped avert a death blow to the housing market. But with the stimulus now gone, natural market forces will take over, and it’s not difficult to imagine some potential negative outcomes:

  • Median home sales prices could drop by roughly $8,000 (the maximum amount of the tax credit).
  • Home shoppers may feel less motivated to get out there and buy. This could decrease demand and increase supply in the housing market.

There are very few trends to point to in VAR’s home sales report. The graph lines zigzag up and down with no clear trajectory. Many housing economists are now predicting a long, slow, L-shaped recovery, and VAR’s data supports this.

Hang in there.

Check out the full report at www.VARealtor.com/HomeSales

Q1 Virginia home sales report released

Our quarterly home sales report for transactions completed between January 1 – March 31, 2010 is out this morning.  The highlights:

The median price of a Virginia home was up 8.9% over the same quarter last year, but down 1.5% from the previous quarter (October – December 2009).

  • The number of home sales was down a fraction of a percent compared to the first quarter of 2009, but down 34% from the fourth quarter of 2009. Why this huge drop? The fourth quarter of 2009 had an unusually high number of transactions, probably due to the home buyer tax credit that was set to expire on November 30.
  • Statewide, inventory has trended downward for 20 consecutive months.
  • Foreclosures decreased by 2.4% from Q1 2009 to Q1 2010, but increased by 6.1% from Q4 2009 to Q1 2010. A potential ray of home about  about foreclosures: Northern Virginia has posted two consecutive quarters of declining foreclosure rates. It’s still too early to tell, but because that region tends to signal the beginning of statewide trends (Virginia’s foreclosure problem first appeared there), we could be witnessing the beginning of the end of the foreclosure mess.

Get the full report and past versions at VARealtor.com/HomeSales.

Here are some of the press reactions (we’ll add more as we find them):

(photo credit)

We’ve said it before, and we’ll say it again: Ignore the e-mails claiming 1) that the recently passed health care bill contains a 4 percent “transfer tax” on home sales and 2) that pending legislation (H.R. 2454) in the Senate requires an energy audit or retrofit for home sales.

They’re both false.

We addressed the “transfer tax” issue here in mid-April. And we communicated about H.R. 2454 back in November in this post. We’ve received assurance from NAR (today, even) that they continue working with the Senate to ensure that residential and commercial real estate are not adversely impacted by this bill.

Gov. McDonnell to create Housing Policy Advisory Committee

Homeowners and Realtors® will be the beneficiaries of a comprehensive statewide housing policy created by Gov. McDonnell. He is expected to sign an executive order this week outlining the policy objectives. It is the first time Virginia has embarked on creating a statewide executive housing policy.

At a news conference in Richmond this morning, the Governor announced the appointment of a Housing Policy Advisory Committee that will be charged with developing a housing policy for the Commonwealth. The plan is expected to cover housing related issues like homelessness, workforce housing, economic development, healthy neighborhoods, effective coordination of transportation, and environmental issues.

Through RPAC of Virginia, VAR was the first major trade organization to endorse McDonnell in his 2009 gubernatorial campaign. His answers to questions during his interview with the RPAC Trustees about housing related issues gave VAR leaders a peek into his vision for housing in Virginia. However, this proclamation from the Governor is a clear signal that he stands firmly with Virginia’s Realtors® and homeowners in understanding the paramount importance of strong communities and real estate markets to Virginians’ way of life.

“As you look at what does it take for everybody to have equal opportunity and access to the American dream, it really to me starts with a new job, to feel that sense of dignity in work. And right with that is the ability to have sustainable, affordable housing, to have a roof and shelter,” McDonnell said, according to the Washington Post.

VAR commends Gov. McDonnell for this unprecedented step towards planning today for a vibrant Virginia housing sector tomorrow. VAR will be working with the Governor and his staff to ensure that the voices of Realtors® and homeowners are heard by the Committee, and we’ll keep you updated on any new developments.

More media coverage:

 

DPOR Director won’t be reappointed

VAR has learned that Jay DeBoer, Director of the Commonwealth’s Department of Professional and Occupational Regulation (DPOR), will not be reappointed.  The Virginia Real Estate, Appraisers, and Common Interest Community Boards all fall under the jurisdiction of DPOR.  A successor will be appointed shortly.<!–break–>

“In his years at DPOR, Jay was extraordinarily effective in transforming the DPOR culture to be much more customer-friendly and efficient,” said VAR’s CEO Scott Brunner.

Virginia’s Realtors® commend Mr. DeBoer for the improvements he made to the Real Estate Board staff and procedures and wish him all the best in his future endeavors.

 

Commonwealth magazine dissects RPR

Is it the biggest thing to hit real estate since the MLS? We’re talking, of course, about NAR’s groundbreaking Realtors® Property Resource (RPR) initiative, and it’s definitely got some people concerned. A project this ambitious is bound to ruffle a few feathers.

Come on baby...But just as many (if not more) are giddy with excitement about RPR. They’re eager to use the new resource to set them apart from non-Realtors® (and those Realtors® who choose not to use it).

That’s why the latest edition of Commonwealth is here: to explain this groundbreaking new program and let you know how your business could benefit and how it will change.

Flip it open to page 18 to see what all the fuss is about. While you’re there, turn to page 28 to read up on a new VAR project called the Virginia Home Sales Dashboard which aims to put help your local association and VAR provide authoritative information on demand to the media, government, and other stakeholders at a moment’s notice. It’s one of VAR’s six major initiatives this year.

Not a VAR member? The state Realtor® Associations in Ohio and Arizona have already been granted permission to reprint the RPR article. Contact us if your association would like to request reprint rights, too.

 

Northrop Grumman chooses Virginia

Northrop Grumman’s new headquarters will be in Virginia. Gov. Bob McDonnell is expected to announce the decision today, although he will not name a specific site.

The defense contracting giant has been condsidering sites in Falls Church, Arlington, and Alexandria. The company expects to make a final decision by the end of April.

The move will create 100 to 150 new jobs. Northrop will also relocate about 350 workers from its current headquarters, bringing millions in economic activity to Virginia.

Read more in the Washington Business Journal….

MyVAR gets kudos from social media experts

At a conference of more than one thousand state and local Realtor® association professionals from around North America, keynote speaker and social media guru Amber MacArthur cited MyVAR, our new membership directory/private social network, as an exceptional example of associations embracing social networking strategies.

Pls pardon the terrible BlackBerry photoQuoth Amber:

“If you want to see an extraordinary example of an association that has embraced social media, just check out what the Virginia Association of Realtors is doing. Their MyVAR customized social networking site allows members to discover and connect with like-minded contacts, create a network of colleagues, share information, and customize their own profile page.  If social media is here to stay, and I believe it is, then a project like MyVAR is exactly what associations should be doing for their members.”

Oh, but that’s not all!

At the same conference, speakers from the Social Media Marketing Institute (SMMI) also talked up MyVAR.  CEO Bill Lublin said:

I was incredibly impressed with the design of the MyVAR website and its application of social processes to Realtor association member management software. It’s hard for me to determine which impressed me the most: the reinforcement of individual’s social circles, the grouping of committees, or the matching of members with other members that they may not have met.

And Ginger Wilcox, COO of SMMI gave MyVAR this high praise:

The Virginia Association of Realtors continues to pave the way for associations across the country.  Realtors are using social networks to connect and interact with fellow agents.  VAR sets the standard for member communications with its MyVAR private social network, giving the association the forum to listen and engage its members while providing members a private platform to gather information, share ideas, discuss issues, and network.

If social media experts like Amber, Ginger and Bill are saying MyVAR is awesome, shouldn’t you be using it? Over 1000 VAR members have already completed their profiles, and dozens more join them every day. They’re waiting for you to join the conversation!