Archive for October, 2010

Home values will ALWAYS and ONLY go UP!

Prices Only Go Up!

Here’s an interesting report from NPR telling the story of an employee of Freddie Mac who manages an online calculator that has (intentionally or unintentionally) been telling web users that home values will only go up!

Read more from NPR: Housing Guy Apologizes For Housing Bubble

It is interesting — I do wish home values would only go up — and during most years values do increase.  The last few years, however, have not held that promised increase in most parts of the Commonwealth.

Let’s take a look at what has been happening in the Central Shenandoah Valley….

First, value changes depend on the time horizon that you consider.  In Harrisonburg and Rockingham County, home values decreased for 4 out of the past 10 years.  That is to say that the first six years of the decade showed an increase (’01, ’02, ’03, ’04, ’05, ’06) but the most recent four years have shown a decrease (’07, ’08, ’09, ’10).

But here’s an interesting cumulative look at the value of a $200,000 home purchased in my market area in 2000:

  • 2001: 9% increase to $218,000 (9% cumulative increase)
  • 2002: 2% increase to $222,360 (11% cumulative increase)
  • 2003: 8% increase to $240,149 (20% cumulative increase)
  • 2004: 16% increase to $278,573 (39% cumulative increase)
  • 2005: 24% increase to $345,430 (73% cumulative increase)
  • 2006: 8% increase to $373,064 (87% cumulative increase)
  • 2007: 1% decrease to $369,333 (85% cumulative increase)
  • 2008: 4% decrease to $354,560 (77% cumulative increase)
  • 2009: 5% decrease to $336,832 (68% cumulative increase)
  • 2010: 3% decrease to $326,727 (63% cumulative increase)

Home values can certainly decline over the short term, and perhaps over the long term?  Thus far, home prices are still quite solid over the 10 year horizon — showing a 63% increase.  That said, 2006 through 2016 home values might tell a different story.

What are you seeing in your market?

Hot clicks from Commonwealth Online October 2010

Wanna get meta? Here are the top five most-clicked links in the October 19 edition of Commonwealth Online:

  1. Robo-signing fallout affects Virginia
  2. Melanie Thomspon named Realtor of the Year
  3. Mandatory HOA dues struck down by court
  4. IRS rules about deductible real estate taxes
  5. RPAC endorses congressional candidates

Stuff you might have missed:

  1. Updated Designation and Education Handbook now online
  2. Recordation tax revenues grow: Sign of increasing sales activity?
  3. Clarification of disclosure rules in Sept/Oct Commonwealth magazine
  4. Property Management Coalition Conference: November 17-19

Please leave a comment if you have any feedback on the new format. Tell us if you like:

  • The reduced number of articles
  • The emphasis on pictures and headlines to allow you to scan and zero in on the content you want to read
  • The increased frequency (beginning in November, we’ll be increasing to twice per month — first and third Tuesdays) 

For real this time

Clarendon church apartment project could be national model

An Arlington church is building an apartment development above the church sanctuary as a way to generate revenue while they face a shrinking budget.

The Views at Clarendon will consist of 70 affordable apartments and 46 market-rate apartments on eight floors being built on top of the two-stort sanctuary of First Baptist at Clarendon. The development is expected to open late next year and is gaining national attention from many urban churches.

Read more at the Washington Examiner.

Even though the thaw is beginning, you can get a better understanding of the foreclosure freeze brought on by the national robo-signing scandal (click here to see how they’re affecting Virginia) in a 60 minute webinar from NAR on Thursday, October 28 at 3 p.m. EDT. Your presenters will cover:

  1. Judicial vs. non-judicial foreclosures: Why does the distinction matter? 
  2. Is purchase of an owner’s title policy necessary for buyer protection? Why doesn’t regular title insurance protect the buyer in these cases? 
  3. Under what circumstance can a buyer of a foreclosed home lose that home if the foreclosure wasn’t processed correctly? Does the distinction between judicial and non-judicial foreclosure come into play here? 
  4. Foreclosure rules differ in each state, but are there general rules that apply in all cases? 
  5. What are the latest developments among banks and regulators on the foreclosure freezes?

Click here to register for the webinar.

 

November 2 is election day, and Realtors® may be interested to know that there are two Constitutional amendments on the ballot about property taxes. So as you head to the polls to vote (click here view RPAC’s endorsed candidates), keep in mind that VAR has not taken a position on these constitutional amendments:

(Note: all of the information below was sourced from the Virginia State Board of Elections website)

Ballot Question #1: Article X. Taxation and Finance. Section 6. Exempt Property

Question: Shall Section 6 of Article X of the Constitution of Virginia be amended to authorize legislation that will permit localities to establish their own income or financial worth limitations for purposes of granting property tax relief for homeowners not less than 65 years of age or permanently and totally disabled?

EXPLANATION
Present Law
Under the Constitution, the General Assembly may give localities the power to grant full or partial exemptions from real estate taxes to persons 65 years of age or older or for persons permanently and totally disabled. The exemption applies to owner-occupied property used as the sole dwelling of such persons. The exemption is currently available only to such persons who bear “an extraordinary tax burden” in relation to their income and financial worth.
Proposed Amendment
The proposed amendment (i) removes the requirement that tax exemptions are available only to such persons who bear “an extraordinary tax burden,” and (ii) gives the General Assembly authority to permit localities to determine their own income or financial worth limitations for tax exemptions for persons 65 years of age or older or for persons permanently and totally disabled.

EXPLANATION

Present Law

Under the Constitution, the General Assembly may give localities the power to grant full or partial exemptions from real estate taxes to persons 65 years of age or older or for persons permanently and totally disabled. The exemption applies to owner-occupied property used as the sole dwelling of such persons. The exemption is currently available only to such persons who bear “an extraordinary tax burden” in relation to their income and financial worth.

Proposed Amendment

The proposed amendment (i) removes the requirement that tax exemptions are available only to such persons who bear “an extraordinary tax burden,” and (ii) gives the General Assembly authority to permit localities to determine their own income or financial worth limitations for tax exemptions for persons 65 years of age or older or for persons permanently and totally disabled.

Ballot Question #2: Article X. Taxation and Finance. Section 6-A. Property tax exemption for certain veterans

Question: Shall the Constitution be amended to require the General Assembly to provide a real property tax exemption for the principal residence of a veteran, or his or her surviving spouse, if the veteran has a 100 percent service-connected, permanent, and total disability?

EXPLANATION

Present Law

Currently, the Constitution does not grant real estate tax exemptions specifically to veterans. However, the Constitution does allow the General Assembly to give localities the power to grant full or partial exemptions from real estate taxes to persons 65 years of age or older or for persons permanently and totally disabled who “bear an extraordinary tax burden” in relation to their income and financial worth. This exemption applies to owner-occupied property used as the sole dwelling of such persons.

Proposed Amendment

The proposed amendment would require the General Assembly to pass a law exempting from local taxation the principal residence owned and occupied by any veteran with a one hundred percent service-connected, permanent, and total disability. The veteran’s surviving spouse could continue to claim the exemption so long as he or she does not remarry and continues to occupy the home as his or her principal residence.

Do you like the new Commonwealth Online?

Never content to rest on our laurels, we’ve put a few new twists on our e-mail newsletter, Commonwealth Online. Here’s what’s different about the October 19 edition:

  1. We’ve trimmed the number of articles
  2. We’ve changed the format to be more visual and to allow you to zero in on the content you want to read about
  3. We’re going to begin publishing the newsletter twice per month (first and third Tuesdays)

Please leave a comment to tell us what you think — we want to know!

Updated Designation and Education Handbook now online

It’s a fact: Real estate designations are a sure-fire way to increase your knowledge and earnings. With 20 designations available through the National Association of REALTORS and NAR family organizations, and even more available from other sources, you’re sure to find one that fits your needs.

VAR’s Designation and Education Handbook includes everything you need to know about earning a real estate designation including benefits, prerequisites, dues, fees, and where to find more information. Click here to download it now.

September Commonwealth contest winner!

 

The answers:

What three-letter agency runs the National Clandestine Laboratory Register? DEA

What’s the three-letter acronym that describes about 14,000 acres of Loudoun County? LOD

What three-letter language-services company offers a discount to VAR members for translating documents or phone calls? LLC

NAR is now offering a new financial service for Realtors®. What are its three initials (i.e., the part after “Realtor”)? FCU

What mortgage servicer did HousingWire say has the quickest turnaround time for short-sale transactions? GMAC

Following the instructions here, you then delete the letters LLC, remove the first and last letters of the whole enchilada (i.e., D and C), remove the Fs and Ds) and you’re left with

E A L O C U G M A

Which you had to rearrange to get the answer.

Virginia slides to #2 on best for business list

For the first time in the history of the Forbes.com Best States for Business rankings, Virginia isn’t number one. Because Virginia’s labor and energy costs rose at a faster rate than Utah’s, the Commonwealth was knocked down to number two.<!–break–>

“Virginia still boasts a very favorable business climate, with an educated labor supply and solid economic growth,” writes reporter Kurt Badenhausen in an online story announcing the latest list. “But Virginia’s business costs (namely labor and energy) have crept up, which allowed Utah to leapfrog it.”

Texas recently unseated Virginia for the top spot in the CNBC Top States for Business study, where the Commonwealth also finished second.

Virginia’s strong business climate helps assure a growing economy, which in turn helps support our housing markets.