NRVLiving - Real Estate. Simplified.

Investors Can Now Own More Properties

In a stroke of genius - well, a reaction to what was a poor decision in the first place - Fannie Mae has now increased the investor loan limits from 4 properties to 10.

Limiting serious investors to 4 properties just didn't make sense - these folks don't deal with numbers like that.  We're not talking loans for weekend warriors who want to flip a house or two, or invest in a condo.  These new limits are designed for the serious investor, the ones who have excellent credit, money to put down (20% or more), and they're set up with tighter guidelines than before.  And that, in my opinion, is a good thing.

This opens up a number of opportunities here in the New River Valley, specifically in Blacksburg and Radford.  I've said it before and I'll say it again ... and again ... and again - investing in college communities makes sense.  For the past couple of years at least, Virginia Tech has announced an on-campus shortfall for residents, which means students are having to find off-campus housing.  Investors are smart to snap these up, because not only do the universities get larger, but so do the periphery of businesses that follow universities.  Where there's a university, so also there are research facilities, medical schools, design and engineering firms, and more.  Housing becomes a premium.

Before you say I'm a cheerleader for housing - which I am, but I want to be an honest cheerleader - I'm not suggesting everyone jump in the housing pool.  However, in the past two weeks I've worked with an investor, two sets of parents with kids at Virginia Tech, and one first-time buyer who have specifically targeted our market because of the university-focus.

That's proof enough.  Thanks, Fannie Mae.

Paint - It Makes All The Difference

Watch a home improvement show on TV, or read an article in a magazine, and one of the recurring themes you'll find is that changing a room's paint color can have profound effects.  Recently, I was reminded of this when a client shared photos with me of a kitchen they just painted, and the results are dramatic.

When Ron and Laura bought their home last year, the walls throughout the house were just a boring white.  White everywhere, and it hadn't been cleaned in quite some time.  While they're working their way through the house, putting their own touches on it, Laura surprised me with some photos of the kitchen "makeover" that cost less than $100 worth of paint supplies.

The Before (wish we had better photos of the before so you could see the complete package):

And the after:

So ... is their a simple home improvement project you're taken on this President's Day?  Send me the before and after photos so we can show off your handiwork!

It's All About Your Neighborhood, and It's SPAM Free!

Ever wondered how to find out what that creepy neighbor sold their house for?  I remember the neighborhood Christmas parties - seems someone always wants to talk about real estate, and inevitably someone will ask "what do you think I can get for my house?"

I'm glad to talk real estate - it's one of my passions - but what if you could stay on top of the market and be the  envy of all your friends?  Now YOU can be the neighborhood expert at cocktail parties, just email me with your New River Valley neighborhood and I'll set up an automatic search that will notify you when a new listing hits the market in your neighborhood, and if it sells.  Easy enough, and no, I will not contact you otherwise - these emails as SPAM-FREE!

If you're interested, email me at jeremy at nrvliving dot com and I'll set it up for you.  I've already had several past clients sign up for updates on their own neighborhoods, and it was so well-received I thought it might be helpful for everyone.  All of this information is online and available for public consumption, let me make it a little easier and send it directly to you, in real time! 

Thanks, cobalt123, for the image.

Free Money's Not Cheap Money - A Look at the American Recovery and Reinvestment Act of 2009

Home buyers - how does a $15000 Tax Credit sound?  $15000, free money - sounds pretty good, right?

Who knows if it'll actually be there, though. 

Let's catch up to speed ... The House has passed a version of the stimulus bill, while the Senate is currently working on their own version.  They're supposed to vote on it tomorrow, February 10th, but as of this post I don't know if that'll happen.  There's some political wrangling that has to go back and forth, and once that's finished then it's voted on by both the House and the Senate ... again.

But why a stimulus in the first place, and will it even help?  Remember - I'm not a lawyer or a CPA, so if you have questions about whether this makes sense for you I'd suggest starting with them FIRST.  Then mail me.

The idea is that a tax credit of 10% of a home's purchase price, or a value no greater than $15000, could be written off on your taxes as a credit, thus stimulating buyers to invest in the housing market by purchasing either new homes or homes that are being resold.  The original stimulus bill, called the American Recovery and Reinvestment Act of 2009, said that only $7500 could be applied for as a credit, but this most recent amendment upped that to $15000.

15 grand is a lot of money.

I received some emails from first-time buyers late last week that thought it was just a first-time buyer credit, but according to the AP that's not the case.  The AP reports "The Senate has voted to award anybody buying a home this year a tax credit worth up to $15000 in hopes of jump-starting the sagging housing market.  The homebuyer tax credit offered by GOP Sen. Johnny Isakson would apply to any home purchased as a main residence and would cost taxpayers $19 billion."  So it looks as if it's a homebuyer credit and not a first-time buyer credit. 

I don't know if this makes a difference overall in the housing market across the country.  I know that the New River Valley market is not facing many of the same problems, and I hope to have my 2008 Annual Report out in the next several days.  Nevertheless, $15000 is a lot of money to just leave on the table and I think by the response I've gotten from buyers so far, and from what I'm hearing across the country, it's going to make SOME kind of a difference.  Make sure to read this report from Calculated Risk on the situation.  Jay Thompson also has a good recap.

EverythingNRV.com and Housing Shortages

Tim Jackson quoted me in a piece he did at EverythingNRV.com entitled "Two Sides of the Coin".

I love seeing people pick up on what the market's doing here, and I thank Tim for including me in his piece.  I did find much different data than he reported with regards to sales figures for both November and December of 2008 and 2007, which I addressed in the comments.  Nevertheless, thanks to Tim for writing and asking me to participate, be sure to check out EverythingNRV.com and add it to your daily read!

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Seems like we covered this last year, as well, but Virginia Tech has announced another shortage of housing for on-campus rooms.  Let's see ... buyers' market, great loan rates, students having to move off-campus ... who might be interested in an opportunity like this? 

Investors.  Parents.  Students with documented sources of income.  Email me ... we need to talk. 

Coldwell Banker Townside Gets All Web-Freaky

Woke up this morning to discover that www.CBTownside.com had a new look!  It had been in the works for a while, but I didn't know when it was going to be rolled out.  Lots of new stuff, including:

• a rotating agent showcase that highlights everyone in the company,
• a Live Chat feature to connect you instantly to one of our award-winning agents (implemented soon),
• a link to our blog, Keepin' It Real Estate,
• and rotating property ads

Kudos to everyone who's worked on the site, including Margaret, Kelsey and Sam.  A lot of time and effort has gone into it already, with more to come, with the goal of making it even easier to immerse yourself in the business of real estate here in the New River Valley!    

Paying Through The Nose?

It's freakin' cold outside, have you noticed?  Of course you have ... have you noticed your heat bill lately, coincidentally?  Likely a good bit different than previous months, I'd bet.  I know we got our December gas bill and immediately turned the thermostat down a few degrees.  THAT bill was a cold dose of reality!  I've heard stories of folks around the New River Valley with heating bills hundreds of dollars higher than they've been in the past!  Seems like everything - oil, natural gas, and electric - seems to be going up in price.

How are you combating it?  Any tips or tricks you want to share with the rest of us that might save a few shekels?  There's no cost to leave a comment below for everyone to benefit!

Thanks to FoxyPar for the image

You Don't Need An Energy Drink, You Just Need Gary Vaynerchuk

I'm in the middle of two trips out of town, and while I didn't get to blog much during my time in NYC at Inman Connect I wanted to make sure I reposted this video from Jay Thompson and Kelly Olexa of Gary Vaynerchuk's keynote address at the conference.

Now, I didn't know much about Gary prior to the conference.  I knew he did Wine Library, and had made some appearances on late night TV, but beyond that I was pretty clueless.  I had a lot to learn. 

Dynamic?  Check.

Loud?  Check.

Full of it?  Maybe a little, but who isn't from time to time?

Worth the price of admission?  Absolutely.

If you've got 32 minutes to spare, I highly recommend watching this video.  It's a little choppy at first, but stick with it.  You don't have to be in real estate to get something from this - you are your own company.  You are YOU.  How will you spread your message?  How will you stand out and be different?

I think there are pieces here that are important for all of us.  I sat in the back of the room - the absolute back - during this keynote and watched the number of heads doing the "Blackberry Prayer" (head down, thumbs furiously pounding away), as well as the folks who just got up and left, during his talk.  On the one hand it's disappointing to see such a dismissal of the topic, but on the other hand that's fine ... it's less competition for me and NRVLiving Real Estate.  Gary's point about the horrible Return on Investment of traditional advertising is something that Steve, Aaron and I have struggled with for years, and I know there are many other industries that read this blog who have as well.

In your industry, how can you stand out?  Even if you work for someone else, how can you brand yourself?  Interesting thoughts, enjoy the video.

Want To Sell Your House? Don't Ignore These Details

This has been making the rounds across the Web right now - it's a simple reminder of what sellers (and their agents) should be paying attention to.  It doesn't matter if it's a home in Blacksburg, or Christiansburg, or Radford ... all of these things make a difference.  The short list? 

1. De-clutter
2. De-pet
3. Leave during showings
4. Your first offer is often your best offer
5. Lowball offers are simply starting points - they're not insults
6. Update, clean and paint
7. Curb appeal matter
8. De-personalize
9. Lighten up the house
10. Fix broken stuff

And Jim Duncan adds #11 - "Price to the market; what you owe does not matter to the buyers or the market."

H/t to Lani for the link

Top 10 Things To Expect In The Housing Market

It's not a Letterman Top 10 list, but could I get a drumroll please?

Thank you.

From FrontDoor.com comes their "Top 10 Things To Expect in the Housing Market in 2009" list.  #5 might be the most important, in my opinion.

1. Continued market adjustments - With home prices in some markets having reached astronomical levels, it was inevitable a reset button be pushed. Sellers will continue to be challenged in 2009 as the inflated pricing of years past adjusts to normal levels. With banks and builders willing to slash prices to sell a backlog of foreclosures and new homes, individual sellers will have to price their homes competitively.
2. Action from the Obama administration - President-elect Barack Obama's plan to help the housing sector includes a 10 percent mortgage tax credit for homeowners who don't itemize their taxes and a crackdown on abusive lending practices.
3. More assistance programs for homeowners in danger of foreclosure - While the federal government is attempting to reduce foreclosures, a report released by the Joint Economic Committee predicts 2 million foreclosures in 2009. Homeowners who are at risk should take steps to avoid foreclosure.
4. Some calm to the chaos of the banks' restructuring - This should cause loan modifications and short sales to get easier, and it will also (eventually) decrease the number of bank-owned properties on the market.
5. Thorough reviews of mortgage applications - Before the subprime mortgage debacle, you didn't have to prove you could afford to borrow $200,000 for a home and you didn't need a down payment. Those days of sketchy lending practices are gone. Lenders now require potential borrowers to provide extensive income and expense documentation. Homebuyers with the best credit will get the lowest interest rates. Take steps now to get your finances in order and boost your credit score.
6. Low prices and low interest rates - 2009 could be the time for reluctant homebuyers to act, as this is perhaps the last year of the best buying opportunity in recorded economic history.
7. Cool tech tricks and tools for the real estate obsessed - As homebuyers turn to the Web more and more for their real estate needs, video, webcasts and mobile search tools are becoming more prevalent. Sellers should consider using these cutting-edge tools to make their homes stand out.
8. Wiser consumers - After facing this foreclosure crisis, buyers, sellers, real estate agents and even tenants will have a deeper understanding of real estate, mortgage and credit, which they can use to make better decisions and be more self-protective in the future.
9. Leaner, greener homebuying - Across the board, homebuying is becoming more eco-friendly, from transactions being conducted digitally to buyers opting for smaller homes within walking distance of school and work.
10. An increase in consumer confidence - As the year goes on and we near the projected end of the recession, sellers can breathe a sigh of relief as buyers regain confidence in the market.

Well ... we've got a year to see what comes true. 

Let's Play Armchair Economist & Determine When the Market Improves

Greenspan's been around a long time - what do you think about his comments?  Is he a cheerleader, or a crazy economist?

No right or wrong answer here, what is your crystal ball telling you the economy will do in the New River Valley in 2009? 

Here's How To Get Your Mortgage Under $1000 a Month

Looking to buy a house in Southwest Virginia?  Perhaps you've been looking at homes in Christiansburg, or in Radford, and you just don't think you can afford it.  I'd remind you that the opportunities are there for buyers right now for two reasons - (1) the inventory available, and (2) the rates that local lenders are willing to lend at.  Let's look at the numbers ...

Assuming a house is priced at $150000, and the interest rate is 5.00% (the current USDA rate), here's how your monthly payments would break down on a home in Christiansburg purchased for $150000 with NO MONEY
DOWN:

Principal & interest:       $805.24
Prop Taxes (estimate):     114.83
PMI (None with USDA):             0

Total Payment:             $920.07

Imagine - a $150000 mortgage for less than $1000 a month.  And it's important to note that this is a USDA loan, with a secure 30-year fixed rate and NO prepayment penalty.  STILL think you can't get a loan?  I promise you that it's still easier than you think.  Contact me, I'll help you search for your best option with local lenders who have money to lend.

This can work well for many buyer profiles, but what one buyer often has a job, credit and no money?  Recent college graduates.  Virginia Tech and Radford alum, let's see how we can make this work for you!

Updated 12/19 8:05am - Stan Norris of Prosperity Mortgage emailed me to take me to task a bit, and he's right.  There are a number of variables that need to be considered regarding mortgages, including whether points are paid up front, whether the Seller is paying some closing costs, what type of property it is, etc.  This isn't an endorsement of the USDA program in every case - your local lender and agent can walk through the best options with you to determine what makes sense.  And I forgot to include insurance costs, as well - that's kind of important.  According to Eric Johnsen, a good rule of thumb to determine monthly hazard insurance on a residential property is to multiply the market value x .0025, then divide that by 12.  So in the example above, ($150000 x .0025) / 12 would mean a monthly insurance cost of $31.25 ... still less than $1000.

So Easy, A Caveman Could Do It

I've been meaning to put this post out there for quite some time, then a month or two ago another agent did  something similar and so I figured it was probably time to move it up the To-Do list.

A lot of people ask me "when's that house down the street going to sell?", or "how much did that two-story on Main Street sell for?"  While I'm glad to tell you, there's a way you can find out even faster.  If you'll email me your name, email address and the neighborhood you live in, I'll set up a search in the MLS that'll email you every time a property in your neighborhood comes on and off the market.  You'll be the first to know when it this the market, the first to know if the price changes ... be the envy of all your friends!  Don't worry - by providing your email address I won't be spamming you, or sending you cutesy recipe cards in the hope that you'll remember my name.  If it helps, I won't even save your address.

I've just found that if you're interested in following the values in your area, this is a good, real-time way to do that.  I've set it up for myself to track my own neighborhood, and those of some of my former clients, and can do the same for you.  Just email me and I'll set it up; I hope you find it useful.

The State of the Market - November 2009

Ever been in a candy shop?  You know, the type where there are candies of all sizes, shapes and colors lining the walls?  The shops where you shove a big metal shovel the size of Delaware into a barrel of assorted candies, and you come up with all different types of sweets?

Yea - that's what the real estate market is like right now.

It's not that it's a huge surprise ... the winter is always slower than normal, so we were prepared for that.  I can't say anyone saw bailouts of the banks, the construction folks, the auto makers, the pizza bakers and the professional matchmakers, but needless to say here we are.

See how I did that, the whole rhyming thing and all?  I know - Eminem I'm not.  Nor am I fan of bailouts of irresponsible mismanagement, but that's a story for another day.

Buyers, if you:  (1) have a job, (2) have money to put down and (3) have good - notice I didn't say excellent - credit, our current real estate market will be like walking into that candy shop and taking your pick of everything that's available.  I don't mean that you'll get it for pennies on the dollar, but the opportunities are there to pick up excellent values right now.  Think about it - if a property is listed now, between the Thanksgiving and Christmas time frame, don't you think that Seller is serious about selling his or her home NOW?  I do, and my Sellers are.  And it's important to note that when I say you need money to put down I don't mean ten's of thousands of dollars.  There are lenders here locally, right now, offering great rates on FHA and other buyer programs that are requiring as little as 3% down, not to mention the free money - yes, free money, not additional loans - that localities like Blacksburg are offering qualified buyers.

Let me post the latest absorption rate numbers for the New River Valley market now, and then check in with folks that might need to sell their home in the next few months.  When it comes to absorption rates, we're looking at how long it would take to sell the existing residential inventory in a particular area, if nothing else came on the market until supply was exhausted.  Anything over 5 months is typically a buyers' market, and anything less than 5 months is typically a seller's market.

Area	# of Active Properties	# of Sold Properties	Absorption Rate	Buyer/Seller Market
Blacksburg	211	12	17.58 Months	Buyer
Christiansburg	258	13	19.85 Months	Buyer
Montgomery County	64	0	64.00 Months	Buyer
Floyd County	115	4	28.75 Months	Buyer
Giles County	54	1	54.00 Months	Buyer
Pulaski	101	5	20.20 Months	Buyer
Dublin	107	4	26.75 Months	Buyer
Radford	70	3	23.33 Months	Buyer

Sellers, the market's not in your favor now when you look at the numbers above.  28, 54, 64 months worth of inventory?  An average of more than two years worth of inventory is a scary thing when you're putting your home on the market, but remember it's not taking EVERYTHING that long.  The average for the NRVLiving Team in 2008 is 101 days, or just over 3 months.  Some have taken less, some will take more, but we're doing our best to expose our listings in every effective way possible.  That being said ... selling right now isn't for everyone.  If you bought a townhouse in Christiansburg last year for no money down and expect a 10% return, it might be a good idea to rent for the home for a while.  Those are products that are having difficulty selling in today's market, and will need some time to settle out.  Nevertheless, there ARE ways to get it sold ... not the least of which includes patience.  There is a lot of uncertainty right now, and it's going to take patience and carefully executed marketing to reach buyers who are ready to execute. 

At the halfway point of the year, I wrote a post looking at what the market was doing up to that point, and compared it to the year prior.  The results were striking, and I'm working on a follow-up for the entire 2008 year that I hope will be helpful.  There will be some in the real estate market who will be happy they held off selling, and others that will regret not buying, but the time is not right for everyone.  Be patient, find an agent who is studying and demonstrating they know the market they're serving, and grab that shovel - there's candy to be had.

If you enjoyed this post, why not leave a comment and subscribe via RSS or email here to be sure you don't miss the next post?

News Ain't Just Broken On TV Any More

A few weeks ago, I was contacted by WDBJ7's news anchor Natasha Ryan about a story she was writing on the online social media site called Twitter.

Now, I've admitted my addictions here on the blog before, and it was interesting to see a local news outlet not only recognizing the power of the service but taking the time to investigate it further.  Below is the final result, in two parts done on last night's broadcast:





Certainly I feel the service is an invaluable tool - it helps me connect with friends, it's enabled me the opportunity to meet current and future customers, and it's even influenced the creation of a new small business startup in the New River Valley.  It's nice to see local news outlets exploring new ways of breaking news and staying in touch with their viewers.  If you're on Twitter, make sure to check out these local news and civic organizations:

• Natasha Ryan
• WDBJ7
• WSLS
• ABC13 WSET
• Roanoke Times
• Town of Blacksburg

There are many more, I'm sure, but these were some I could recall off the top of my head.  Thanks to Natasha and WDBJ7 for the story, as well as to Patsy Stewart, Ira Kaufman and Stuart Mease for their participation as well, and to Kevin Cupp for recording the video!

Hey - are we connected?

We Have Much To Be Thankful For

Happy Thanksgiving to all, and thank you for your patronage and friendship in 2008.

Do You Trulia?

A few days ago, I wrote a post talking about loan modifications and the problems I thought they perpetuated.  It was a post that was admittedly written with a bit of anger and cynicism at what our elected officials were doing, but also with some disappointment I can't think of a better solution. 

Imagine my surprise when I received an email from Fran at Trulia, telling me the post had been selected to be featured on their Top Housing Market Stories page!  Thanks, Trulia, that's pretty cool!

Speaking of Trulia, are you familiar with their site?  Whether you're a buyer, a seller, or interested bystander, you might want to check them out.  They have great tools for everyone to follow what's happening in their neighborhood, and Steve and I are both on the site and updating our profiles now! 

Loan Modifications Perpetuate The Problem, and Don't Use The Benefit Of Experience

Inman News posted information last week a new plan whose focus was to streamline the loan modification process. 

I'm admittedly behind on this post, and it's been rehashed across the web.  Essentially, if (1) you're at least 90 days delinquent on a home that is your primary residence and on which you owe at least 90% of the home's value AND (2) either Fannie, Freddie or one of their participating loan companies must own the loan, then under the loan modification program you can restructure your loan to as much as 38 percent of your gross income. 

Forgoing the in-depth analysis and critique from economists and Harvard-types for a moment, I have a problem with this.  I'm struggling with the issue of personal responsibility, and Government subsidy of these loans doesn't resolve the problem.  The problem is poor decision-making on the part of consumers and lending institutions and the real estate industry.  I'm not sure modification or "streamlining" resolves the issue of personal responsibility, and on the flip side I don't know that allowing millions of loans to default and further crippling the housing and financial sector makes a lot of sense either.  I have no answer for this, but struggling with the issue.

Bloodhound writes (emphasis mine):

The streamlined process looks only at income, not assets. If you refinanced your home to buy a Mercedes or own another home, you won’t be expected to sell them to pay your mortgage.

Peter Schiff, president of Euro Pacific Capital, predicts that many homeowners who have little or no equity will stop paying their mortgage and then reduce their income to get the biggest payment cut possible. They could stop working overtime or, if two spouses work, one could quit. After the modification, they could try to boost their income again.

“This is a once-in-a-lifetime opportunity,” Schiff says. “People are going to feel like complete morons if they don’t participate. The people getting punished are the ones who never made an irresponsible decision to buy a house they couldn’t afford.”

The government is offering loan servicers $800 for every homeowner they get into the plan.

Schiff predicts that loan agents “will be cold-calling people trying to get them into it. Just like they encouraged people to overstate their income to get a bigger loan in the first place, now they will encourage them to understate their income to qualify for a smaller loan.”

I can see Schiff's point.  Desperate lenders will have an incentive to push people into what appears to be an even worse problem. 

As I said, I'll leave the bulk of the analysis to economists and people who have a better grasp of the larger picture.  I know that locally, Blacksburg and Christiansburg lenders haven't gone crazy with out of control loan terms.  Rates are low, borrowers are bringing money to the closing table and deals are getting done.  Mark Weddle says it's "Back To Basics" and he's right ... you can still buy and sell in today's market.

It was eery watching this video, reposted on Jim Duncan's blog, this morning.  Take the 10 minutes to watch what Peter Schiff has to say, and then tell me you didn't raise your eyebrows in surprise at how history has played out these last several months.

No ... the photo has nothing to do with the post.  I took the photo, and I liked it.  That's all.

See? It's Possible To Get Along

A reader sent me this article overnight about adaptive reuse in Washington DC. 

As Judy wrote:

"wouldn't it be great if Blacksburg could do a similar type of adaptive reuse to the old Blacksburg Middle School?  Granted, our school is much older, but the commitment of all parties made it work."

Thanks Judy - there really is something to Fulghum's book.

Have an idea or article you'd like to share on the blog that applies ?  Email me and let me know.

The Colosseum Wasn't Built In One Day

And this one won't be, either.

A few days ago, I needed a break.  I had been in the office all day working on some things, and my craving for a Diet Pepsi Max (yea, I'm one of the 31 people across the nation that actually like the stuff) kicked in.  One of the many reasons I like my office is that its an easy walk to a local gas station, so I hoofed it down to pick up that invigorating cola and then headed back.

On my way back I passed the site for The Colosseum, so I snapped some photos of the excavation.  It had been a while since I had stopped in and so I thought I'd capture the moment.  Just a lot of dirt right now ...

There's a lot of Blacksburg history in those layers of dirt:

Dozens of piles of dirt looking back towards South Main Street:

Someone's going to have a killer view: