- Are some neighborhoods faring better than others in Stafford County?
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August 2008
Everyone is aware that the real estate market in Stafford has tanked much as it has in most areas of Northern Virginia and the country. But are all things equal? Have some neighborhoods fared better than others in terms of the numbers of homes sold, median prices on homes that have sold, and the average number of days it takes to sell? The answer to that question is yes and here’s some data to prove it.
First, let’s look at the number of homes sold. For the purposes of this study, the data retrieved is limited to single-family homes. Overall county data is provided as a baseline for comparative purposes and some of the largest subdivisions have been chosen to provide that comparison. The attached file contains the data and charts necessary to view the data.
As you can see from the chart Number of Units Sold, some subdivisions are faring much better than the county as a whole, most notably Park Ridge, while other subdivisions are faring significantly worse (Stafford Lakes). Of course, this is just one measure of strength/weakness in assessing the state of a local market so I’ve looked at a couple of others as well.
Prices are certainly an important consideration and we can do the same type of comparison (Median Price chart). Prices don’t show as great a deviation from the county baseline but there’s still a significant enough deviation in some of the subdivisions to cause concern.
Likewise, we can also look at the average number of days on the market it takes from the time a home is initially listed until it’s sold (Average DOMP chart). Here we see somewhat conflicting data in that Stafford Lakes has the shortest turnaround time of any of other the subdivisions and significantly below the baseline. That can be explained when you consider that only a small number of homes have been sold and the median price has dropped more than the average meaning that the few homes that sold did so relatively quickly because they were aggressively priced.
So what does all this mean? The most important thing to consider as a buyer in this market is where to find the best value to insure that your investment is on solid ground. Make sure your agent can assess market conditions using neighborhood-specific data to compare to the baseline for the market area. As a seller, make sure your agent can help you understand the dynamics of the local market so you can be sure that you’re pricing your home correctly based on current market conditions. If you resist facing the reality of your local market you risk being one of the many unsold homes used for these statistics.
- A Buyer’s Guide to the Fredericksburg Real Estate Market
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August 2008
Some might question the wisdom of being a home buyer with the real estate market conditions being what they are. Put simply, real estate is a market like any other market and wise and successful investors agree that when most buyers are running away there’s generally a great buying opportunity staring you in the face. Of course, that doesn’t mean that you buy just anything that’s available but by performing research and analysis of various opportunities you can determine the best values with the potential for the greatest return.
But there’s more to it than just the greatest return too. Most people’s investment in real estate is limited to their family home so valuations are somewhat personal in nature and more than just dollars and cents to the average buyer. These considerations include things like neighborhoods, schools, proximity to work, etc. and only the individual buyer can gauge the importance of those criteria vs. the investment potential. But unless you’ve already selected the neighborhood where you want to live, putting those personal criteria aside when you start your search for a home is a generally a wise decision.
In the current real estate market in the Fredericksburg Region (including the counties of Stafford, Spotsylvania, King George, Caroline, and Orange) most homes for sale continue to be overpriced, plain and simple. The majority of sellers haven’t caught on to the fact that their house isn’t worth what it was in 2005 and, in fact, there are some agents that haven’t seen the light yet either. Stock owners would love to be able to sell their stock in companies like Ford, GM, Macy’s, etc. for what they sold for in 2005 or even last year…but it ain’t happening. In spite of the fact that many homes are still overpriced there are plenty of opportunities to be had in short sales (if you’re patient), foreclosures and bank-owned properties, and just plain anxious sellers.
To start with, what’s a short sale? I’ve offered a detailed explanation in another post but, briefly, a short sale is a home that’s listed for sale at a price that is insufficient to repay the existing mortgage(s) and any offer requires the approval of the lending institution(s). A foreclosure, on the other hand, is essentially a home that’s been repossessed by a bank for non-payment while a bank-owned property is generally one where the bank has accepted the deed from the previous owner.
In general, home prices in the Fredericksburg area are down about 22% from the peaks reached in early 2006 but there are individual properties and some neighborhoods that have seen much greater declines and represent great opportunities. To find some of those opportunities call your agent or contact me for further assistance at john@javre.com or by phone at 540-907-5280.
Comments are always welcome here so please feel welcome to offer your thoughts as well.
- What’s a Short Sale?
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August 2008
As I'm sure you're aware, property valuations in the Fredericksburg real estate market ran up for several years from 2000-2006. Prices reached a peak here in the Fredericksburg region in early 2006 and began to come down later in the year. They've been falling continually since then. People who bought their homes at peak values in 2004-2006 have seen their homes devalue significantly and quickly from the prices that they paid for them. Many had mortgages for 100% of the home’s purchase price and frequently at variable interest rates in the expectation that prices would continue to rise. As valuations started to slide downward and interest rates increased they either could no longer afford the payments or saw little reason to continue to pay their mortgages and abandoned their homes to foreclosure. That's still happening to some extent as lenders are working through their backlogs and the impacts of the new federal relief programs haven't been seen yet.
Other people in similar situations have remained in their homes but now need to sell (retirements, transfers, lifestyle changes, etc.). They may owe more than the home’s current market value but must sell so they list it for less than what they owe their lender(s); hence the term "short sale". Lenders will cooperate with this process in many cases to reduce the number of foreclosures, get rid of unprofitable loans, and write off the losses. It's expensive for them to take a property in foreclosure, hire an agent to sell it, and maintain an asset management team to manage and dispose of these homes so they WILL consider taking a loss on a sale when the borrowers' financial duress can be documented. The problem with the short sale process presently is that the lenders are swamped and can't get through their backlogs fast enough making transactions long and tedious.
A short sale may sound like a sweet deal from the buyer's perspective because there's an opportunity to get a great home at a bargain price. That part is true however, buyers have to be patient and recognize that with current conditions the sale will take several months to come to closure and there's no guarantee it will EVER happen. Why? Because you can negotiate a deal with the seller, come to agreeable terms, and ratify the contract but the sale remains contingent on the lender’s approval and the lender may or may not agree to the terms. Another potential pitfall is that while you’re waiting for the lender’s response to the ratified contract an offer from another buyer may come in. If that happens it gives the lender the opportunity to bargain for the best possible deal and you may end up with nothing or paying more than you had initially agreed to.
So it's important to understand what you're getting into with a short sale. I had clients wait for about 100 days for a response on a short sale when they got frustrated by the lack of communication from the lender, gave up on the deal, and bought a foreclosure. The foreclosure sale took less than 30 days to get done. I've had other clients get impatient and abandon their offers after 35 to 90 days and, unfortunately, I’ve had just one successful transaction with a short sale to date.
If the deal is right, a short sale may result in a great home at a great price but a buyer entering the deal should understand the potential pitfalls and come armed with lots of patience. If you need further assistance please contact me at john@javre.com or 540-907-5280.
Comments are always welcome here.
- What’s happening in the Fredericksburg market?
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August 2008
Based on the most recent statistical data available from the Realtor® associations in Northern Virginia, the Fredericksburg Regional real estate market is pretty typical of the declining real estate market countrywide. The region compares favorably with the nation as a whole and has its pluses and minuses when compared to the other locales in Northern Virginia. The latest monthly data available (July 2008) suggests that median sale prices in the Fredericksburg region remain the most stable having decreased by 14.28% from July 2007 to July 2008 compared to higher numbers in the surrounding regions; 16.87% in Fairfax-Arlington, 28.11% in Greater Piedmont (Warrenton-Culpeper), and 39.62% in Prince William (Manassas-Woodbridge).
Now some might consider that good news because that statistic shows the Fredericksburg region being “less bad” than our neighbors but further analysis shows that we’re weaker than our local brethren in the percentage of our listings that get sold and the amount of time it takes to sell them.
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Locality | Active Listings | Units Sold | % Sold | Average Price | Chg Yr/Yr Average Price | Median Price | Chg Yr/Yr Median Price | Avg Days on Mkt | Avg Sale Price as % List Price |
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Fairfax Region | 10002 | 1857 | 19% | $485,225 | -12.46% | $399,000 | -16.87% | 91 | 92.60% |
Prince William | 6105 | 1012 | 17% | $244,494 | -38.27% | $214,000 | -39.62% | 112 | 90.06% |
Greater Piedmont | 2177 | 140 | 6% | $310,347 | -16.40% | $230,000 | -28.11% | 122 | 87.94% |
Fredericksburg | 3527 | 346 | 10% | $294,624 | -14.28% | $269,900 | -14.59% | 142 | 89.27% |
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So what’s the deal? Is it a good market or a bad market? The answer to that question depends on your perspective. If you’re a first-time buyer or an investor, the market hasn’t been this good since the early 90’s. If you’re a seller looking at what you could’ve gotten for your house in 2006, the market hasn’t been this bad since the early 90s. But, the market is what it is and the way to approach any market is to look for the greatest opportunities. As a seller, you might say, what opportunities? How can I find an opportunity in such a depressed market? The answer to that, of course is that real estate is truly local and while the Fredericksburg market is down in general, there are neighborhoods that are still selling strongly and your home just might be in one of them. While you won’t be able to get the 2006 value for your home you might still be able to get an attractive price. From the buying perspective, there are neighborhoods that are heavily discounted because a large number of homes are for sale or have been foreclosed. Being selective and checking neighborhoods closely you’ll find that there are many deals and some steals to be had in those neighborhoods. There’s always an opportunity for savvy buyers armed with a knowledgeable agent.
- Single Story For Sale in Anna Woods Estates
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• 2,076 sq. ft., 2 bath, 3 bdrm single story "Rambler"
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MLS®
$372,360
- Great Rambler + 8 Acres
Anna Woods Estates, Lake Anna Woods
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NEW HOME TO BE BUILT ON OVER 8 ACRES IN BEAUTIFUL LARGE LOT ANNA WOODS ESTATES SUBDIVISION. USE BUILDERS PLANS OR BRING YOUR OWN PLANS. LOCATED WITHIN A MILE OF ENTRY TO LAKE ANNA STATE PARK WITH SWIMMING, HIKING, RIDING, AND BOAT SLIPS AVAILABLE.
Property information
- 2 Story For Sale in Anna Woods Estates
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• 2,139 sq. ft., 3 bath, 3 bdrm 2 story
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MLS®
$415,290
- Craftsman Styling!
Anna Woods Estates, Lake Anna Woods
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NEW HOME TO BE BUILT ON OVER 10 ACRES IN BEAUTIFUL LARGE LOT ANNA WOODS ESTATES SUBDIVISION. USE BUILDERS PLANS OR BRING YOUR OWN PLANS. LOCATED WITHIN A MILE OF ENTRY TO LAKE ANNA STATE PARK WITH SWIMMING, HIKING, RIDING, AND BOAT SLIPS AVAILABLE.
Property information
- 2 Story For Sale in Anna Woods Estates
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• 2,691 sq. ft., 3 bath, 4 bdrm 2 story
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MLS®
$476,010
Anna Woods Estates, Lake Anna Woods
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NEW HOME TO BE BUILT ON OVER 10 ACRES IN BEAUTIFUL LARGE-LOT ANNA WOODS ESTATES SUBDIVISION. USE BUILDERS PLANS OR BRING YOUR OWN PLANS. LOCATED WITHIN A MILE OF ENTRY TO LAKE ANNA STATE PARK WITH SWIMMING, HIKING, RIDING, AND BOAT SLIPS AVAILABLE.
Property information
- 2 Story For Sale in Anna Woods Estates
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• 3,775 sq. ft., 4 bath, 4 bdrm 2 story
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MLS®
$757,250
Anna Woods Estates, Lake Anna Woods
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NEW HOME TO BE BUILT ON OVER 19 ACRES IN BEAUTIFUL LARGE LOT ANNA WOODS ESTATES SUBDIVISION. USE BUILDERS PLANS OR BRING YOUR OWN PLANS. WITHIN ONE MILE OF ENTRY TO LAKE ANNA STATE PARK WITH SWIMMING, HIKING, RIDING, AND BOAT SLIPS AVAILABLE.
Property information
- 3 Story For Sale in King George
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Luxurious Estate Retreat
• 4,479 sq. ft., 3 bath, 5 bdrm 3 story "Country Chalet"
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MLS®
$499,000
- HUGE PRICE REDUCTION!
King George, King George County
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COUNTRY CHALET ON 3 WOODED, PRIVATE ACRES. DRAMATIC DESIGN, OPEN FLOOR PLAN, 4-5BEDROOMS AND 3.5 BATHS, 2-STORY GREAT ROOM WITH FIREPLACE, LOFT, & LOTS OF GLASS. MASTER BEDROOM SUITE WITH DECADENT LUXURY BATH, JETTED TUB. IN-GROUND POOL, TIKI BAR, HOT TUB, LOADS OF DECKING MAKE THIS A FABULOUS RETREAT. LOWER LVL GUEST STE WITH FULL KITCHEN & DINING AREA PLUS A 2ND WASHER/DRYER. HEATED 2-CAR GARAGE W/ HALF-BATH & SEPARATE STUDIO/WORKSHOP. SQFT APPROXIMATE.
Property information