This past spring brought us back to the days of the strong seller’s market, due mostly to high buyer activity, spurred by continued low interest rates, combined with across-the-board sustained appreciation.  Those factors lead to a feeling that the real estate market had finally hit bottom in 2010-2011 and that 2013 had brought revitalization.  Indeed, a comparison of real estate data as of March 2013, compared to March 2012 would bear that feeling out: March 2013 saw a national median home price of $185,000 as compared to $171,250 a year prior; Annual sales of existing single family homes and condos had increased from 4.28 million to 4.75 million; Home Inventory, or the length of time it would take to sell existing homes on the market at the current pace of sales, had dropped from 8.1 months’ supply to 5.9 months’ supply; the number of homes in the foreclosure process had dropped from 1 in 213 to 1 in 248; the number of homeowners whose mortgage balance exceeded the market value of their home dropped from 11.6 million, or 24.4% to 10.9 million borrowers, or 22.6%; finally the average 30-year fixed rate as of March, 2013 was 3.4%, as compared to 4.1% a year prior.

Locally, we saw those national trends borne out, where we saw solid appreciation (3 – 10% depending on the area) and a return to the days of buyers writing contracts with escalation clauses, waiving appraisal contingencies, etc. leading to negotiations having that ‘feeding-frenzy’ feel as they did at the height of the real-estate market prior to the crash.   Fast-forwarding to this summer, locally we are seeing that strong buyer activity and attendant appreciation cool off, and now find ourselves in a balanced market with an increase in supply and still strong, but less so as compared to the spring, buyer demand.  I believe that this cooling off is due primarily to two factors: first, an increased inventory, with many homes that were over-priced on the market in the spring continuing to sit, combined with new listings coming during the summer months.  Secondly, increasing interest rates (4.75-5% as compared to 3.4% in March) have made homes less affordable causing buyers to have to search for lower price points.  Having said that, the current market is still a great one for sellers who can capture the spring’s appreciation and get a home sold in 30 days if priced right. And buyers can get some good deals on properties that have been on the market over 60 days, or on some of the distressed-sale short sales and foreclosures that are still prevalent in our market. We are also watching the default rate trends because, as they continue to rise, they could be predictive of another increase in foreclosures as many people with adjustable-rate mortgages may not be able to make payments.

Another factor that I think will be interesting to watch vis-a-vis its affect on the long term health of our real-estate market going forward is the unprecedented increase of institutional investors piling into housing.  The question is whether these investors, both international and from Wall Street, have helped to boost the recovery, or whether they are going to create an artificial bubble, which will inevitably have to pop.  For more information on that subject, you can email me and I can email you a PDF to a compilation of articles on that subject or we can talk on the phone. Enjoy the rest of your summer! If you’d like to talk more about the real estate market or your home specifically, call me at 703-400-6757 or email me at jennifer@jyhteam.com.

Securing financing to purchase a new home is one of the most important, exciting, and nerve-wracking financial steps most people will ever take. During the housing boom, mortgage requirements were relaxed to unsustainable levels, and it seemed just about anyone could approach a lender and walk away with financing. But in an effort to recover from a record increase in foreclosures and loan defaults, lenders have become more stringent; loan applicants must now meet more demanding requirements to obtain a mortgage. Does this mean that you won’t be able to get the financing you need? In a word, no. Here are a few tips to follow for a smoother path to home ownership.

If there is one thing you can do to increase your chance of obtaining a mortgage loan, it is to take careful stock of your credit situation and address any issues that are lowering your credit score. The first thing to do is to order a copy of your credit record from all three major credit reporting agencies: TransUnion, Equifax, and Experian. Look over this information carefully to make sure that all three agencies are aligned in their rating of your credit. If you see any errors, dispute them with the company in question. If your credit is too low to obtain an attractive interest rate on a mortgage (680 or higher is considered good; 720 will put your in very good position to secure financing), take a few months to increase it. One way to do this is to take out a credit card, use it to make regular purchases, and pay off the balance monthly.

Reduce your debt.

By paying down your debt, you will not only show a lender that you are a good risk for making regular payments, you will end up with fewer outstanding payments or accounts to factor into your debt-to-income ratio. Simply put, the fewer static payments you have on your financial record, the better. While it might not be feasible for you to pay off your car or student loans quickly, you should be sure that credit card and store balances are low or nonexistent.

Don’t splurge.

If you can put off making any large purchases until after your home sale has closed, do so. This isn’t the time to run out and buy a luxury car or take a lavish vacation. The rule of the day is to be conservative with your spending – meaning more cash in hand for that down payment and reserve cash in the bank to fall back on once you need to start making your monthly mortgage payments.

Save. Save more. And then save more.

The amount of money you have in the bank is going to be important when you need to prove to a lender that you can offer up a healthy down payment. While 20% down is the conventional rule of thumb, there are mortgages available that require less cash up front. Your loan officer can point you in the right direction to take advantage of any low- or no-cost down payment programs for which you might qualify. But wherever possible, add to your savings – more money in the bank can only help you qualify for a loan.

Stability is key.

Maintaining steady employment or income is an absolute must when you apply for a mortgage. This isn’t the time to try a new career path on a lark or risk taking a new position without a lot of job security. Lenders are going to want to see that you have a proven, stable source of income, that you make regular payments on your rent or existing mortgage, and that you seem like a good risk for financing.

Obtaining a mortgage loan may seem like a challenge, but with a little diligence, a little financial restraint, and the aid of an experienced loan officer, you’ll have all the tools you need to secure the financing you need. If you can prove your commitment to the cause, you’ll be on the path to home ownership in no time.

Newsgeni.us – September 2013

Immaculate 3 level townhouse in great location backing to open common area! Bright open floor plan with Pergo floors on entire main. Formal living room, Large eat in kitchen with island & Atrium door leading to patio & great fenced rear to enjoy. Gorgeous family room with gas fireplace, bedroom & full bath on second level. Huge master suite on upper level with sitting area, and luxury master bathroom with seperate shower & garden tub. Walk to community center & pool!

For more pictures: 9835 Maitland Loop Picture Slideshow

Call for showing today at 703-965-9663 or email Ingrid@jyhteam.com.