Danilo Bogdanovic-Real Estate Consultant -Loudoun and Fairfax County

Many people talk about the July/August "Summer Slump" and how Loudoun County home sales "mysteriously" drop. Well, there's been some truth to that in years past. But not this year. In fact, 2008 had one of the most fast paced residential real estate buying summers in recent years.

To show you what I'm talking about, let's look at a comparison of the summer of 2007 and this summer (2008)...

In 2007, we did see a bit of the "summer slump", specifically in July and August. Here's a graph showing the number of new listings coming on the market (supply) and the number of homes selling/going under contract (demand):

As you can see from the graph, the rate of new listings coming on the market stayed fairly steady only dropping 7.5 percent from June '07 to August '07. But buyer demand dropped 26 percent from June '07 to August '07, which is a significant amount. A significant drop in buyer demand compared to only a slight drop in inventory levels is one of the main reasons why prices decline. And a drop in prices is exactly what happened during the summer of 2007.

Now let's look at what happened this summer:

This graph tells a completely different story. The rate of new listings coming on the market dropped 13 percent, nearly double that of 2007. This meant less new (and existing) inventory on the market. Looking at the number of solds, it's clear that buyer demand actually increased from June to July and was still higher in August than it was in June.

So what does this mean to buyers and sellers?

For sellers, it means:

• Less competition
• More negotiating power
• Higher chance of selling faster if priced correctly

For buyers, it means:

• Fewer homes to choose from
• Less negotiating power when it comes to price
• Higher chance of competing/multiple offers on the properties that are "deals"

If you're a seller who was waiting for this year's "Summer Slump" to be over before listing their property, you missed a great opportunity. With many sellers waiting until the "fall market" to sell their property, it'll be interesting to see what happens with inventory levels and buyer demand this month and next.

For more information about the Loudoun County real estate market, check out LoudounScene.com.

Representatives from the developers of Moorefield Station gave a presentation today at the Dulles Area Association of REALTORS® office in Leesburg, VA. The project is being done by Clark Construction and Edgemoore Real Estate Services, a sbusidiary of Clark Construction.

Here are some of the specifics:

• The project was approved in 2002 by a "Smart-Growth" administration
• The project is about 9.5 million square feet of mixed-use space
• The proposed Dulles Metro Rail will end at Moorefield Station
• Moorefield Station is being compared to Reston Town Center and Rockville Town Square - "a community defining place"
• Civic plaza, art center, concert stage, retail, restaurants, office space, etc
• Bike/walking trails will connect to other trails throughout Loudoun and the W&OD Trail

Loudoun County is also looking for a new administrative/government center. Here are some details:

• Loudoun County sent out RFP in 2007 due to need for more space for administration/employee
• Loudoun County wants to own space rather than leasing it
• Need 500K square feet with expansion to 800K total
• Final 3 sites for Loudoun Administration/Government Center were narrowed down to Moorefield Station, Oaklawn and The Village at Leesburg
• Loudoun County will announce the final location of its new government site sometime early next year

The also talked about the economic development and impact. Here are some of the stats:

• $25 million in yearly real estate taxes from new development
• New jobs from businesses moving to Loudoun from surrounding counties and from out of state
• Will stimulate additional commercial development as companies/businesses expand
• Dulles Metro Rail is predicted to produce an estimated $41 million in taxes

Some other points:

• Not "green buildings", but LEED certified
• Can't do a "Kiss and Ride" due to layout
• Rail will be on one side while entrance will come in on other side - that may prove to be a little tricky
• George Mason University (GMU) has been in talks wtih Moorefield Station about new campus, but GMU wants free land

Claude Moore Charitable Foundation, which has given over $9 million in grants to local organizations is donating 27 acres to the project along with funding assistance. Part of the future profits from Moorefield Station will go back to the Claude Moore Foundation to go back to the community.

In a nutshell, it's a ways out, Loudoun County hasn't chosen it's new administrative/government office site and the Dulles Metro Rail is still in limbo. I'll keep you posted as new things materialize...

For more information about the Loudoun County real estate scene, check out LoudounScene.com.

Rates dipped down for the second straight week despite the not-so-good news about inflation. Wholesale prices jumped 1.2 percent in July, much more than expected (and at the fastest pace since 1981). Normally, you would expect interest rates to rise on such news, but they didn't.

Despite the lower rates, mortgage applications fell to their lowest level in almost eight years. The Mortgage Bankers Association's index of loan applications was down 1.5 percent compared with the previous week, and was down 34.2 percent compared with the same week last year.

One thing to keep a close eye on is the Fannie/Freddie situation. Both suffered further losses to their stock prices especially after the Barron's article "The Endgame Nears for Fannie Freddie" was published August 18. Some say that a government takeover would lead to an increase in rates because of uncertainty regarding the transaction. Others say that a takeover would end the period of uncertainty, not start one, and the effect on rates would be minimal, if any. We'll have to wait and see...

Source: BankRate.com

***UPDATE: The Department of Veterans Affairs (VA) is raising their loan limits from $417,000 to as much as $729,000 in some areas. The increases are effective immediately under the Housing and Economic Recovery Act of 2008.

The Ameridream and Nehemiah seller-funded downpayment assistance programs are in jeapordy. They may be eliminated this fall unless Congress approves the FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008 (H.R. 6694).

For more on this story, check out the post over at LoCo Real Estate Musings. Here's an excerpt:

The Department of Housing and Urban Development apparently would rather eliminate these programs entirely than regulate them.

...the bottom line is that thousands of potential homebuyers will not be able to purchase homes if the programs are discontinued.

If you're a future home buyer that may be interested in utilizing seller-funded downpayment assistance programs such as Nehemiah or Ameridream, take the time to check out the links and make your voice heard.

Further Reading

http://www.supporthomeownership.com/

Groundswell - Fighting To Save Downpayment Assistance

Not all sellers understand that their asking price is the ultimate determination of whether they will sell their property or not. Not only does the asking price affect if you'll sell, but when and for how much. The longer it takes you to get to the correct fair market value asking price, the greater your Days On Market are and the more of a negative stigma buyers will have of your property. This can translate into lower offers and ultimately, a lower selling price.

Sure, how well your agent markets the property matters. But even the best agent in the world can't fool today's buyer and a good buyer's agent. Today's buyer has access to way too much information and data to overpay for a property. And a good buyer's agent will provide comps and their personal expertise to even the most uniformed buyer so that they don't make a bad decision and overpay for a property.

If you're wondering how much of an effect getting the asking price right has on if and when your property sells, consider this...

I took a look at the last 30 properties (not including foreclosure/REO or short-sale properties) that have sold (gone under contract) in Loudoun County. Here's what I found:

• These properties went under contract in an average of 25.4 days of their last price change/adjustment
• Some of these properties had been on the market for months, but once they adjusted their price to or below the correct current market value, they sold in less than a month
• Some of these properties went under contract in as little as 4 days and had multiple offers
• Some of the properties that sold were at the $700K mark and a few were over $800K so even the properties in the upper price brackets are selling quickly when priced correctly

No matter how well known your agent is, how good your marketing plan is or how many open houses you hold, it comes down to price.

It takes a good and gutsy agent to be honest and share with you your property's real and accurate market value - no matter how much lower it is than you thought. It's then up to you to listen to them, review the comps and data (aka CMA) and be objective with yourself and the situation. Once you do that and then list your property at a price that reflects today's fair market value and market conditions, you will actually sell it.