Melissa Savenko's Richmond Real Estate Review

The Administration's Position on the Tax Credit and Other Measures to Help the Housing Markets

This is a government press release from the U.S. Treasury Department yesterday, announcing the Administration's support for an extension of the first time home buyer tax credit, as well as an expansion of the credit to include certain purchases of primary residences by "move up" buyers.  This article outlines the specifics of the proposed extended and expanded home buyer tax credit. 

Here's hoping Congress passes legislation that implements these proposed changes.  We're getting ready to go into the traditionally slowest selling season for real estate - from Thanksgiving through early January.  It's possible - probable? hopeful? - that the tax credit could keep the market moving during this slow down period. 

If you look at the activity over the last several weeks, mortgage applications have dropped off and the phones have stopped ringing.  I think that's because those first time buyers either decided NOT to buy, because they had missed the "window" to get closed by November 30, 2009.  Or the first time home buyers decided to sit on the sidelines, play the odds, and bet that legislation like the proposal on the table would get passed and they would get at least the same credit ($8,000) and possibly even more.

Now interest rates are starting to creep up.  I wonder if that fact will get people off the fence.  Lock your rates now, buyers!  October through February is a great time to be a buyer.  Sellers recognize that the selling season slows down to a glacial pace, and people who have to sell can get a bit panicky at the prospect of their house sitting on the market until Spring.  So those of you with good credit and money to put down can get some really good deals.

First Time Home Buyer Tax Credit - Official Information on How to File for Your Money!

Here is the official guidance from the IRS on the first time home buyer tax credit.  I will say, your friendly government tax collector provides good, comprehensive information on a whole host of topics.  Note the information on how to get the credit - in other words, a check from the Feds for $8,000 - ASAP, by amending your 2008 tax return.  Get that money sooner, rather than later, and use it for Christmas shopping!

Home Buyer Tax Credit Extension Deal Reached by Senate

Woo hoo!  According to CNN and other sources, the Senate has reached a deal to extend the current first time home buyer tax credit until April 2010, and even to expand the tax credit to certain other buyers of primary residences.  A $6,500 tax credit would be available to purchasers of a "new" primary residence, so long as they have lived in their existing primary residence for at least five (5) continuous years. 

As always, the devil is in the details.  However, Speaker Nancy Pelosi indicated earlier this week that the House would take it's lead from the Senate and pass whatever legislation the Senate sent over.  Here's hoping that's true, and it happens FAST.  Based on my own experience and anecdotal evidence from other agents in my office, the sales market, which was being primarily driven by first time buyers, has come to a dead halt in the last 10 days to two weeks.  Our theory on why that is the case: Buyers are waiting on the sidelines to see if the credit might get even richer. 

Let's get some certainty, and move forward, especially while the interest rate environment is so favorable.  Here's hoping this credit extension and expansion happens, and leads to more home buying and selling. 

Richmond, Virginia - Home Prices Are Rising, But Foreclosures Are Up as Well

Well, the news in the real estate market is mixed, to say the least.  According to the Standard & Poors/Case-Schiller Index, which tracks real estate data in twenty major metropolitan areas, real estate prices rose again in August 2009 for the third straight month.  The quick rate of recovery, a 7% annualized price increase, in the face of continued unemployment and job losses, has some experts baffled.

In contrast, the other real estate article in today's Richmond Times-Dispatch Business Section reports on the local market and does not have great news.  It reports that while Richmond comes in No. 101 on the list of Top Foreclosure Cities, the rate of foreclosures is up 24% over the previous month and 90% year over year.  OUCH!  So while our ranking has dropped us out of the Top 100 Foreclosure Cities, all that really means is it has gotten so much worse in other markets, that even significant increases in foreclosure activity here are not enough to "keep up" with the worst markets.

All in all, a pretty confusing picture.  We real estate professionals are worried, and watching the activity in the market closely.  I will say that in my office, which has a significant chunk of the market share for several of the more stable and consistent City of Richmond neighborhoods, an informal poll of the agents shows people are VERY concerned about the lack of activity.  Frankly, there are only two buyer demographics driving this market right now:

• First time home buyers; and
• Investors with cash.

Both of those buyer groups tend to focus on lower priced properties, so are no help with the inventory priced above $200,000.  Investors can't get credit from banks to buy, so only those with cash are in the market, and there aren't lots of those folks. 

With first time home buyers, everything dropped off a cliff last week, once the chatter about the extension of the tax credit began.  It seems like all the first time buyers have decided to sit on the sidelines to "wait and see" what Congress will do with the $8,000 first time home buyer tax credit.  Some are betting that it will get bigger.  That's big gamble in my mind, against what my stepfather calls "The Hungarian Cinch," a bet you can't lose, $8,000 FREE dollars.  It's super-frustrating as an agent, because the other elements of the buying environment - inventory, affordability, interest rates - will never get better in our lifetime.  Even if the credit comes back as $10,000, if the interest rates start to creep up, which we've been seeing, that extra $2,000 is chump change compared to the additional interest you'll pay over the life of the loan.

I have no idea what Congress will do. I do think if the tax credit is not extended or expanded, the activity in the market will come to almost a dead halt until possibly Spring 2010.  Buckle up and hunker down, people.  Unless you are one of those two buyer groups above, or just have lots of money and have fared well in this recession, it's going to get worse before it gets better.

Richmond, Virginia - It's Restaurant Week!

Woo hoo, foodies all over town having been waiting for this week!  While the kiddies get excited over Halloween, we get excited over awesome food at a reasonable price with a portion donated to two great causes.  Eat your face off and feel good about doing it!

Here is the complete restaurant week guide from www.richmond.com.  The short version is you get a three course, prix fixe menu for $25.09, and $2.09 of every meal goes to support Meals on Wheels and the Central Virginia Foodbank.  Some of my personal favorites, including Amici, Rowland's, and Zeus Gallery, are on the list again this year.  Some newbies that I really want to try, including Stronghill Dining Company and the Water Grill, have joined these perennial favorites.

Baby Sis had a GREAT dinner last night at Acacia, and highly recommends the oyster stew.  I haven't made it out yet this week, but I'm so looking forward to our upcoming girls' night out.  Maybe if I play my cards right I can go out to eat twice!  A girl can dream....

So, I know it's a tough economy, and people are cutting back, and tightening their belts.  But consider loosening that belt this week, both literally and figuratively.  Treat yourself and a friend to a wonderful meal, support your local restaurants, and donate to two great causes.  Sounds like a win-win-win to me.

Homebuyer Tax Credit Likely to Be Extended, Says CNBC

Breaking news.  As of 12:48 p.m. today, CNBC reports that the Senate is "likely" to extend the first time home buyer tax credit in some form, with a vote to come as soon as today.  CNBC also reports that the House is likely to "take its cue from the Senate" and pass identical legislation, so as to avoid a conference committee. 

What that credit will look like is anyone's guess.  Here's hoping it is extended to any buyer purchasing a primary residence, which would start moving the housing inventory above $200,000 price point.  Right now that market segment is stagnant, if not declining.  I have my fingers crossed.

Richmond Rap Video - This Is AWESOME!

OK, folks, I've heard about this from a bunch of different people, but finally watched it, courtesy of my 11 year old.  D*mn funny.  I'm going to watch again tomorrow and see how many of the sites I can identify.  Rock on guys, I love it.  I'll buy either of you a beer on Robinson any night.

 

Analysis of the Central Virginia Area Housing Market - Third Quarter 2009

Well, the report commissioned by the Central Virginia Regional Multiple Listing Service ("CVRMLS") on the housing market for the Third Quarter 2009 was just released.  Thank goodness, the overall consensus is guardedly optimistic. 

Good news:  There seems to be some consensus that the recession has ended and we are in what will be a slow-but-steady economic recovery.  The unknowns that will be a drag on the economy:  the job market, and still-rising unemployment rates.  Richmond, at 1.7% job losses, is doing better than the statewide average of 3.0% job losses, but 20,000 overall jobs lost in the Greater Richmond Metropolitan area still seems like a pretty big number to me.

The other good news:  Virginia should recover faster than other areas, because the state economy was hit (relatively) less hard than much of the country. 

The Report's sections that focus more specifically on the housing market have some positive information, but I'd say on a closer read, it's definitely a more mixed bag, trending to negative, in my opinion.  Sales volumes in general are up.  However, check out the chart on Page 5 of the Report.  Here's what it says - but in pretty bar chart form:

• The sale of homes priced under $100,000 is up 80% over 3Q 2008;
• The sale of homes priced $100,000-$199,999 is up 21% over 3Q 2008;
• The sale of homes priced anywhere over $200,000 is DOWN anywhere from 12%-23%.

Ouch.  The other bad news: Sales prices are still in decline, although not as steep a decline.  So, the first time buyer price range and the bargain-basement investor price range are MOVING.  But anything over $200,000 is not selling so well.  Although maybe as those $100,000-$200,000 sellers sell, they'll buy the move-up house.  We can hope....

So...bottom line, those of us in the business are trying to stay positive, but it's tough.  Every deal has hair.  And just not many deals seem to be getting done.  I'd love more business, I'm not embarassed to say. [;)]  Anyone out there looking to buy or sell?  Give me a call, or drop me an e-mail at melissasavenko@gmail.com.  I'd love to help you.

GRTC Bus Barn Issues AGAIN - Something Don't Look Right

OK, I'll have to address this topic in more detail tomorrow or the next day.  I promise now that my Facebook issues have been resolved I'll have more time to write. [;)].   

More questions and concerns have been raised around Sheila Hill-Christian's appointment to the Greater Richmond Transit Commission's ("GRTC") Board of Directors.  The Richmond Times-Dispatch reported yesterday that Ms. Christian Hill is a paid consultant on an economic development study being conducted for the City.  [ASIDE:   Why do we always hire consultants from outside the region to conduct these studies?]  This relationship was not disclosed to City Council during the GRTC Board review and appointment process.

Why should we care?  GRTC will be selling its current bus barn location in the Fan District sometime soon.  The GRTC Board will have a substantial influence on that parcel's subsequent development, depending on who they decide to sell to.  Ms. Hill-Christian has been involved with Mayor Jones' administration, which would like to see the bus barn property transferred to the Richmond Redevelopment and Housing Administration ("RRHA"), which would then control any development.  I think many Fan residents, myself included, think that's a terrible, horrible, no good, very bad idea.  I'm especially concerned that Mike Rohde, the previous GRTC Board Chair and a tireless advocate for the Fan, was not reappointed to his post. 

Here are some of my pressing questions: 

• Why would City Council appoint three (3) NEW members to the GRTC Board?  Retained institutional knowledge should have been of critical importance with these significant issues on the table.
• Charles Samuels, the council person for the 2nd District, which includes the bus barn property, objected to the new GRTC appointments.  Why didn't the Council support his objections?  Isn't that typically standard operating procedure, to defer to the council person whose district is impacted?
• Why wasn't everyone proposed for appointment to the GRTC Board interviewed?  That seems particularly concerning.

Fan, Museum District, Boulevard, Carytown residents:  Keep a watchful eye on this.  I don't mean to be all cloak-and-dagger here, but there already seems to be some questionable dealing going on.  The City is NOT a real estate developer.  It should stay that way.

No New Year's Eve Bash for Carytown

The Richmond Times-Dispatch just reported that the local Carytown merchants will NOT be holding the uber-successful Carytown New Year's Bash this year, due in large part to the expense associated with security.

That sucks.