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We had a bright and sunny weekend here in Northern Virginia, and a surge of home buyers were out looking at the homes for sale that had popped up late Thursday afternoon and Friday morning. A little marketing tip is to put a home into the MLS database Thursday to feed all the IDX sites out there that send e-mails to registered home buyers.  Our MLS, actually the Metropolitan Regional Information System (MRIS), is the #1 source and they pump out the data you see on Trulia, Zillow, Frankly MLS, Roost, Redfin or Sawbuck. They have their own “ad-free” site for you called Homesdatabase.com which is excellent.

So I showed some townhomes in Fairfax around $350,000 and the newest listing was swamped with buyer agents and their eager clients. At one house there was a guy with an Alexander Ovechkin jersey who looked like he would fight us for it!

I tried to show a home in Vienna priced at $599,900 in my neighborhood but the agent, who I know well, told me she had two offers on Friday. One offer was so good that it was accepted by the home sellers… before the scheduled open house!

Vienna, VA Home Buyers can’t wait for the Sunday Open House

I also showed a home in Vienna around the corner priced at $699,900 and again I knew that agent well. She was holding an “open house” and there were three families there at the same instant, all looking quietly and wondering if they would be in a bidding war over this classic 1970’s colonial? It seemed like it was the house du jour…

Residential real estate is the ground floor barometer for the economy and, mark my words, the economists will be talking about this in five weeks. Again, I am seeing a frantic home buyer surge as they are trying to find a home, and get a contract accepted to get the $6,500 or $8,000 home buyer credit before the deadline… and lock in a low mortgage interest rate (currently below 5%).

Real estate in Vienna, VA is fueled by the location to employment centers like Tysons Corner or Reston  (some people like the W&OD Bike Trail) and Fairfax is fueled by price where many homes have dipped significantly but have great locations or neighborhoods.

This is the time, home buyers of Northern Virginia, to have a buyer agent or ABR working for you!

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The national home sale data that has come out recently, like the Case-Shiller Home Price Indices, and local data  have been all over the place giving a confusing picture of the local real estate market. Here, I am going to look at the McLean, Virginia zip codes 22101 and 22102 real estate sales for January 2010.

Although our memories aren’t always accurate, remember that early 2009 had a cascading stock market and the country was falling into economic turmoil. It wasn’t until March 2009 that a bottom was established.

But please know that this information is reported from MRIS which is not guaranteed to be 100% accurate but should be considered pretty darn close.

Keep in mind, mortgage rates were again falling and super low (around 5%).

Home Sales Numbers for 22101 in January 2010:

• Total Units Sold in January 2010, 24 vs. 13 in 2009 (up 84.62%)
• Average Sold Price in January 2010, $1,243,281 vs. $1,1997,292  in 2009 (up 61.70%)
• In the $700,000 to $799,999 range, 2 sold with 6 active listings
• In the $800,000 to $899,999 range, 3 sold with 15 active listings
• In the $900,000 to $999,999 range, 3 sold with 7 active listings
• In the $1,000,000 to $2,499,999 range, 6 sold with 68 active listings
• In the $2,500,000 to $4,999,999 range, 0 sold with 12 active listings
• Average days on market in January 2010 was 93 vs. 175 in 2009
• The average sold price in January 2010 was 81.54% of the average list price

Keep in mind there were big snow storms that shut down Northern Virginia for more than a week. I even had to push my car up the hill on Route 123 in Tyson’s Corner near International Drive at 10:00 pm one Saturday night!

Home Sales Numbers for 22102 in January 2010

• Total Units Sold in January 2010, 15 vs. 7 in 2009 (up 114.29%)
• Average Sold Price in January 2010, $798,493 vs. $626,429 in 2009 (up 27.47%) *
• In the $700,000 to $799,999 range, 1 sold with 2 active listings
• In the $800,000 to $899,999 range, 1 sold with 5 active listings
• In the $900,000 to $999,999 range, 1 sold with 7 active listings
• In the $1,000,000 to $2,499,999 range, 7 sold with 46 active listings
• In the $2,500,000 to $4,999,999 range, 0 sold with 27 active listings
• In the $5,000,000 & Over range, 0 sold with 6 active listings
• Average days on market in January 2010 was 87 vs. 91 in 2009
• The average sold price in January 2010 was 92.36% of the average list price

**This zip code reflects some extremes in pricing as there were 5 sales under $500k and 7 sales over $1.0 million. The McLean home market includes condominiums in all price ranges.

I have set up a quick search for you of homes in 22101

or

I have set up a quick home search for you of homes in 22102

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The national home sale data that has come out recently, like the Case-Shiller Home Price Indices, and local data  have been all over the place giving a confusing picture of the local real estate market. Here, I am going to look at the Vienna, Virginia zip codes 22180 and 22182 real estate sales for January 2010.

But please know that this information is reported from MRIS which is not guaranteed to be 100% accurate but should be considered pretty darn close.

Keep in mind, mortgage rates were again falling and super low (around 5%).

Home sales numbers for 22182 in January 2010:

• Total Units Sold in January 2010, 8 vs. 11 in 2009 (down 27.27%)
• Average Sold Price in January 2010, $773,509 vs. $666,278 in 2009 (up 16.09%)
• In the $500,000 to $599,999 range, 1 sold with 15 active listings
• In the $600,000 to $699,999 range, 2 sold with 10 active listings
• In the $700,000 to $799,999 range, 3 sold with10 active listings
• In the $800,000 to $999,999 range, 1 sold with 14 active listings
• In the $1,000,000 to $2,499,999 range, 1 sold with 45 active listings
• Average days on market in January 2010 was 118 vs. 149 in 2009
• The average sold price in January 2010 was 91.18% of the average list price

January’s stats were also impacted by a historic snow storms that virtually closed everything down with 30″+.

Home sale numbers for the Town of Vienna, 22180, January 2010

• Total Units Sold in January 2010, 12 vs. 14 in 2009 (down 14.29%)
• Average Sold Price in January 2010, $676,730 vs. $450,232 in 2009 (up 50.31%)
• In the $400,000 to $449,999 range, 2 sold with 5 active listings
• In the $450,000 to $499,999 range, 0 sold with 6 active listings
• In the $500,000 to $599,999 range, 0 sold with 11 active listings
• In the $600,000 to $799,999 range, 5 sold with 5 active listings
• In the $800,000 to $999,999 range, 1 sold with 3 active listings
• In the $1,000,000 to $2,499,999 range, 2 sold of 17 active listings
• Average days on market in January 2010 was 57 vs. 81 in 2009 (down 29.63%)
• The average sold price in January 2010 was 96.01% of average list price

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A significant number of the homes in Northern Virginia were built in the 1950’s, 1960’s, and 1970’s. Yes, a lot has been built since then, but the building booms in those times constructed significantly smaller homes and much faster.The total number of homes built in the 1970’s alone outpaces the most recent boom time.

Best of all, they were pinker, yellower and bluer too.

We have all seen the color scheme and it typically raises the eyebrows of first time home buyers. In fact, most of the sellers probably intended to remodel those baths too when they bought the house years ago. But these bathrooms were built to last, and they still work so they won’t be getting a HGTV overhaul in our game plan because there won’t be a significant ROI.  So, they stay.

Home buyers will overlook the pinks, blues or yellows if the location is right

But often these homes have oak hardwood floors hiding under wall-to-wall carpet, and there have been a series of good updates (and not so good updates) that buyers will appreciate like central heating or AC systems, roofs and gutters, or window and door replacements. Deep down, most of these homes have good bones and are now in great locations.

So sellers need to start thinking like buyers, and who those buyers of their home might be? Today’s home buyers are unique and been trained by HGTV programs like House Hunters or Property Virgins. Open the Washington Post and see if those shows are on tonight and take a peek… it may be an eye opener listening to the comments of the on-camera home buyers.

The hardest concept for home sellers to grasp: It isn’t your house anymore!

A home seller’s starter checklist:

• Paint walls with a modern color with a “flat enamel” finish… it looks richer and conceals imperfections
• Trim should be ultra white for the best, cleanest contrast
• Paint your ceilings “ceiling white”… it will make those lower ceilings look higher
• Light fixtures will need replacing all over the house… think brighter!
• Some carpets may be in good condition or almost new, so have them professionally cleaned
• Expose those hardwood floors hiding under the living room floor… brighten them with a mop or refinish
• Update old kitchen appliances… the Sunday paper may have a “package” deal
• Set a date with a charity or trash removal company to get rid of some of your old stuff
• Clean everything including your windows… a local maid service may do the trick!
• Remove 50% of the clothes, coats, or supplies in your closets…
• Consider renting a storage unit or contacting a “POD” storage service
• In Northern Virginia, there are professionals to do almost any job… so hire them to do the lifting!

No home is perfect, and your goal as a home seller is to help create a series of “wow moments” when a buyer sees your home online, pulls up at the curb, and then walks in your front door.

Isn’t gravity cool?

If you are planning to climb a ladder to pull out the ice, then bring up some table salt. Kosher salt is also effective in breaking up the ice. Making some room for sunlight to hit the area is also essential because you want that to help get the water moving down the downspout and away from your home.

Like any sort of operation involving a ladder, have a friend close by to help move it (and to call 911 if you fall). Take your time and use a tool like a garden hoe to pull off some extra snow.

Use Table or Kosher Salt in to break up ice

It is important to understand that your down spouts need to be clear so that they can drain any water and allow fresh air to reach the top easily. In a post in December after a snow storm dumped 20″+ on Vienna, Virginia,  I mentioned the same issues when preparing for winter storms and the rapid melting that takes place.

I removed this section of the downspout that was clogged and about 15 feet of perfect ice came down in sections. I used a mallet to break up the sections but was amazed at the extent of the blockage in the downspout.

Most professional roofers, if you can reach them, can’t do too much right now to save your home. But they will tell you to make sure the gutter drains are clear, use table or kosher salt to break up the ice, flush with hot water if possible, be extremely careful climbing any ladders, and understand that an insurance claim may be in order after everything has melted.

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You have probably seen how a reservoir gets filled when the dam is closed, well, this is the same type of event except that the water backs up and into your house.

Over the past two days I have had two friends in Vienna, Virginia call me about leaks inside their homes. One was at a bay window below a soffit vent, and the other was from the roof on a three story colonial. That leak flowed all the way downstairs in the family room. And in both cases, little can be done right now because the ice in the down spouts needs to melt and allow the water to drain properly.

Ice dams are uncommon in Northern Virginia and this year (2010) is unique because we are setting a historic record for annual snowfall. At my home in Vienna, VA, we measured 24″ of fresh snow on Saturday afternoon and another 8″ of snow on Wednesday afternoon. Combine that with below freezing temperatures since last weekend(at 3:38 P.M., it is only 20°)  and there really hasn’t been any natural melting.

Homeowner’s insurance was intended to cover ice dams

One of the tell-tail signs of a potential problem is when icicles form from your gutters. The ice is now firmly in place and any melting snow is now flowing right over the gutter. The melting is fine as it flows over the gutter, but when the flow backs up is when it can come through the house.

At this point,  I personally have to trust the fact that my builder and roofer did everything possible six years ago to protect my home from an ice dam.

When your roof gets repaired one day in the future, make sure there is a drip edge and sufficient roof flashing is installed to prevent water penetration. If you have really had it with asphalt roofs, then maybe you should consider a metal roof where snow slides off much more easily. A friend in Vienna had a metal roof installed recently so I will get that name for this post.

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David Stevens who is the Assistant Secretary for Housing – Federal Housing Commissioner had the FHA issue new guidelines on January 21, 2010 to help reshape the government insured home mortgage agency and how it offers low down payment loans to home buyers. It is a little boring or even dry for Washington D.C., but important if you are planning to use this type of financing to purchase a home.

• Impacts loans assigned on April 5, 2010 and beyond
• Upfront mortgage insurance premium of 2.25% (yes, it still can be financed)
• FICO Scores above 580 can put 3.5% down payment
• FICO Scores below 580 must put 10% down payment
• The maximum Seller concessions shall be 3% (that’s a closing cost credit to the Buyer)
• Increase Enforcement of FHA lenders (this has been going on for the last 18 months)

That is it in a nutshell, and if you want to read the HUD Mortgagee Letter 2010-2 or the HUD.GOV gripping press release then enjoy the read!

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Considering buying a home with a central air conditioning or a heat pump system? Well it is essential that you know that as of January 1, 2010, manufacturers aren’t going to build any new systems using R-22 refrigerant or any new spare parts for those existing systems using R-22. And, virtually all those old HVAC systems use R-22 to work their magic.

Eliminating a Greenhouse Gas at home

The 1992 Montreal Protocol was amended to phase out HCFCs (Hydro chlorofluorocarbons), commonly referred to as a Greenhouse Gas, which have been identified as causing damage to the ozone layer. The refrigerant known as R-22 is HCFC-22. The U.S. EPA implements Title VI of the Clean Air Act, and the 1st of January was an important phase-out date under the amended Montreal Protocol.

This situation came to light recently when a RE/MAX colleague was called out of town and his buyer client’s had a home inspection on a cute little Vienna, Virginia home. The home inspector must have pointed out that the Lennox system was from 1992 (yes, there is a manufacture date on the label) and that it would need replacement when it pooped out.

In the meantime, there are home buyer warranty programs that have coverage for existing R-22 systems in the first year which addressed the buyer’s concerns. This specific R-22 coverage is new, but like all types of insurance they have limits and fine print for pre-existing conditions. It is best for home sellers to provide this coverage (costs about $450 at closing) to the buyer in case service is needed in the first year.

Home Owners should budget now to replace R-22 heat pump systems

If you are a current home owner like me who has an R-22 heat pump system, then it may be time to start budgeting for a replacement heat pump or A/C system. Most systems now meet EPA Energy Star standards and qualifications using a replacement refrigerant like Puron® or SUVA 410A®. New Energy Star units use considerably less electricity and the savings are significant and almost pay for themselves over five years.

Only a licensed HVAC contractor can calculate what type of system you will need to install to properly heat or cool your home. Using the square footage of your home and other factors, they will determine the proper “tonnage” of your compressor unit. Too big and it won’t work properly. Today’s systems are quieter outside and have multi-speed air handlers for better air flow inside.  But remember, gget a few estimates and the highest SEER rating that fits your needs.

Make sure to get a few estimates of replacement systems, and make sure that your system qualifies for the $1,500.00 Energy Star Tax Credit.

The EPA has published consumer guidelines that may be helpful if you are concerned about this issue or are planning to replace your R-22 Air Conditioner or Heat Pump system this year.

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I had a home buyer Tweet me and ask if I had any words of wisdom to pass along. The funny thing is that I love giving advice, but 140 characters weren’t going to cut it because what I do really can’t be distilled down to a sound bite. It also raised an issue that many socialists have written dissertations on… the desire for a silver bullet or quick fix.

A picture and a paragraph won’t be enough

Buying real estate in Northern Virginia is going to be a complicated task that will require some planning and very hard work:

• You need to figure out how to pay for your home (and adjust if necessary)
• You need to figure out the best location (and adjust if necessary)
• You need to figure out what style of home you want (and adjust if necessary)
• You need to figure out a reasonable sales price (and adjust if necessary)
• You need to do some comparison shopping (and adjust if necessary)

Plus there really are distinct differences between living in Arlington, McLean, Vienna or Oakton, Virginia.

and now for Doug’s words of home buyer wisdom…

Right now, today, I can share some wisdom that is worth passing down and it will require you to do some serious soul searching. Did you ever read “What Color is My Parachute” when you were searching for a job or life purpose? In that book the author has his readers do some serious thinking to help them discover their individual strengths, and then organize and understand the importance of capitalizing on those strengths.

Where do you see yourself in five or ten years? Today you have opportunities to buy into a neighborhood for the long term, rather than starting with a first-timer home and then moving in five years to your “family” home. Today’s long-term mortgage interest rates are low and should be low for a while, and home prices have been knocked down too. I won’t bother you with equations, but as rates go up then your buying power goes down.

Right now, in Fairfax County, Virginia, I am not seeing builders building too many detached homes under $1,000,000. Understanding the basics of supply vs. demand proves that the supply of detached homes under $650,000 will remain unchanged (actually decrease) over the next ten years. And the population forecast is on the upswing too.

So, my buyer’s agent advice or words of a wisdom… this is the time to buy a home with the long-term in mind.

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Revised to include new 5405 instructions

The world of residential real estate in the U.S. is facing an expiration date of historic proportions in 2010 that buyers and sellers need to pay attention to for a variety of reasons. April 30, 2010 is the last day that buyers and sellers can “enter into a binding contract” for a real estate transaction to qualify for the two, limited time, federal tax credits for buyers of residential real estate.

Having a strategic real estate plan in early 2010 is essential for both sellers and buyers of primary residences especially before the ship has sailed… and it will. Hey, I’m just a real estate agent so ask your tax adviser what’s best for your tax situation.

Attention home Sellers, it ain’t just for first-time home Buyers this time!

Way back in November ‘09 when first-time buyers were in a frenzy to close on a home before November 30th, Congress passed The Worker, Homeownership, and Business Assistance Act of 2009 to extend the first-time home buyer tax credit and add a new tax credit for “long-time resident” homeowners. So now the move-up home seller group or downsizing home seller needs a clear strategy for getting a contract on their existing home and then a contract on their new home. These tax credits are for principal or primary home purchases and not intended for investors or people buying second homes.

Home Sellers, if you had planned on moving-up or down this year, then you should realize that buyers this winter have a deadline or extra motivation to snatch-up your home. This is important especially since home inventories are low in many areas (supply vs. demand). And then, once you have that contract in hand,  you can put in a contract on your new home before the April 30th deadline for the “long-term resident” credit if you qualify.

If you are thinking of just waiting until the Traditional Spring Market in 2010, then you really need to think again. Waiting until May to put your home on the market is a strategic error. The motivation of the tax credit can act a little like rocket fuel to qualified buyers to enter into contracts by the April 30 deadline, and I witnessed that phenomenon in the Northern Virginia real estate market last fall as the original deadline approached. This credit is essentially up to $8,000 cash to the first-time home buyer… and that will buy a lot of home furnishings!

I forecast 45% of 2010’s real estate sales are “in escrow” during this period

Here are the important dates as posted on IRS.gov:

• Binding Contract by April 30, 2010
• Must Settle on the Purchase by June 30, 2010

First-Time Homebuyer Credit details:

• Buyer who have not owned a primary residence during the three years up to date of purchase
• No one under 18 years old
• Modified Adjusted Gross Incomes up to $125,000 for single filers (reduced credit $125,000-$145,000)
• MAGI up to $225,000 for joint filers (reduced credit $225,000 – $245,000)
• No credit on homes with a purchase price over $800,000
• Maximum Credit of $8,000 or 10% of Purchase price (smaller of the two)
• Need to file IRS Form 5405
• New instructions as of January 15th, 2010: Revised 1/10 5405 Instructions

Long-time Resident Credit details:

• Must have used the same home as a principal or primary residence for at least five consecutive years of the eight-year period on the date of purchase of a new home as a primary residence.
• Credit up to $6,500
• Modified Adjusted Gross Incomes up to $125,000 for single filers (reduced credit $125,000-$145,000)
• MAGI up to $225,000 for joint filers (reduced credit $225,000 – $245,000)
• Need to file IRS Form 5405
• New instructions as of January 15th, 2010: Revised 1/10 5405 Instructions

Members of the Armed Forces and certain Federal Employees serving outside the U.S.:

• You will have an extra year to qualify for the credit

This information is intended as strategic advice to help give readers an overview of the upcoming 2010 real estate market, and you should always consult a professional tax adviser to discuss your tax situation and if you qualify for this tax credit, and how much you are entitled to receive at your price-point.

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