A Buyer’s Guide to the Fredericksburg Real Estate Market
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.