Heather Embrey

I am sooo very excitied about the extension of the 1st Time Home Buyers Tax Credit as well as the enhancement to add move-up Buyers & increase the income cap.

I find my buyers have quiet a few questions related to the tax advantages of this program, and since I am not a tax expert, I wanted to share this website with you all: IRS First Time Home Buyer Credit FAQ

Hope it helps!

IS THE MARKET RECOVERING? A DEFINITE MAYBE

One thing is certain - it's a lot better than it was at this time last year. As 2009 comes to a close, these are

the key indicators that we are watching very closely to give us a sense of where we're headed in 2010:

Contract Activity: Looking good.

Through the first ten months of 2009, the number of ratified contracts

is up 19% compared to the same time period of 2008, and the pace is accelerating. The recent

expansion and extension of the homebuyer's tax credit program to take us through the spring market

certainly helps.

Inventory: Looking really good - for now.

The number of homes on the market is down 45% from this

time last year, and that means there's actually a shortage of homes for sale in the lowest price ranges.

That bodes well for at least some modest upward pressure on home prices. But that could change

because of...

Short Sales and Foreclosures:

A drag on 2010. The number of non-performing mortgages in Northern

Virginia is increasing, due to the rise in unemployment and underemployment. That's going to get worse

before it gets better, and there are plenty of adjustable rate mortgages that are due to reset at higher

rates next year, too. These trends will combine to put more distressed homes on the market in 2010. We

don't think the impact will be as dramatic as it has been during the last two years, but it will have a

dampening effect on the market recovery.

Unemployment: A mixed bag.

The unemployment rate in Northern Virginia is hovering right around

5%, almost two full percentage points higher than this time last year - and it will get worse before it gets

better. We wouldn't be surprised to see it climb to almost 6% before turning around, and that turnaround

won't come until early 2011. However, our rate is less than half the national rate, which has climbed to

more than 10%. Rising job losses will hurt in 2010, but we're a darn sight better off here than the rest of the

DC region.

Interest Rates: Incredible - for now.

Low mortgage interest rates mean that purchasers have almost 17%

more buying power for their dollar than at this time last year. But rates will rise in 2010 as growing federal

budget deficits put a squeeze on rates. Both the National Association of REALTORS® and the Mortgage

Bankers Association are forecasting a half point rise during the course of the year, rising from the current

5% to slightly more than 5.5%. There is a big caveat to their forecasts, however: the federal government

has to come up with a "plausible deficit reduction plan" during 2010 for rates to rise only by that amount.

Failure to do so could send rates soaring.

So where are we headed in 2010?

In our view, the same place we've been in 2009 - a slow recovery

with a few bumps along the way. Readers of this space for any period of time know that we are

unabashed optimists about the long term health of our real estate market, and we still are - for the

long term. And as we've said for years, we'd rather have our market conditions than those anywhere

else in the country for the long run. We expect an overall increase in contract activity of around 10%

compared to 2009 and modest price appreciation of perhaps 3% for homes priced under $750,000. The

price of more expensive homes will stabilize, but it will likely be 2011 before we see any appreciation of

consequence.

FOR COMPLETE DETAILS, CLICK HERE.

CONTRACTS:

October 2009 contract activity was up 23.8% from October 2008 in

the immediate Northern Virginia area; was also up 23.8% in Loudoun County, but

was down 31.3% in Prince William County. The number of available homes on the

market is down significantly in all three greater Northern Virginia jurisdictions.

PRICES:

The average sales price was essentially unchanged in Northern Virginia

and Loudoun County from October 2008 and was up 9.7% in Prince William. Prince

William's increase is entirely a reflection in a change of what's selling - the lowest

end of their market has seen a significant drop in contract activity, so the arithmetic

average of what is selling is higher.

INTEREST RATES:

While rates are well below the rates of this time last year, they

did tick up just a bit from September. The Fed has given very clear signals that it

intends to keep low the rates that are within its control, but the market will ultimately

determine mortgage rates. We still believe that the need to finance the enormous

federal budget deficits will result in higher mortgage interest rates over the next

year, so it is highly unlikely that rates will get much better than they are right now.

AFFORDABILITY:

Homes are significantly more affordable today than this time

last year - or at any time in the past three years because of lower interest rates and

continuing lower home prices. However, since prices, especially at the lower end,

are showing signs of heading up, affordability will vary greatly depending on price

range and geography.

DIRECTION OF THE MARKET:

As stated last month in this space, we're not

out of the woods yet; this is not a housing market that has "recovered." We're a lot

better off than we were at this time last year, but there is likely to be another wave -

not a tsunami - of short sales and foreclosures as interest rates reset on ARMs

originated 4-5 years ago at the peak of the market. Nonetheless, we're keeping the

arrow pointed "up" for now, in large measure because of the extension and

expansion of the homebuyer's tax credit.

For full details, visit:

http://www.mcenearney2.com/StatPak/Oct2009/NorthernVA_October2009.pdf

Inventory is still at 2.1 months supply!

CONTRACT ACTIVITY:

September 2009 contract activity was up 13% from September

2008 in the immediate Northern Virginia area; was up 8.2% in Loudoun County, but

was down 23.3% in Prince William County. The number of available homes on the

market is down significantly in all three greater Northern Virginia jurisdictions.

PRICE ACTIVITY:

The average sales price in all three of the Northern Virginia jurisdictions

was up from September 2008

Average prices were up 4.7% in close-in Northern

Virginia, up 7.3% in Loudoun, and 8.2% in Prince William. That is the first month-over-year increase since December 2007. While this reflects at least in part ashift in the mix of what is selling, this is nonetheless a very positive sign.

INTEREST RATES:

Wow, fixed rates under 5%! We'll be blunt: anyone who is

serious about buying a home should not pass up the opportunity to lock in rates

that are near a generational low. We still believe that the need to finance the

enormous federal budget deficits will result in higher mortgage interest rates over

the next year, so it is highly unlikely that rates will get much better than they are

right now.

AFFORDABILITY:

Homes are significantly more affordable today than this time

last year - or at any time in the past three years because of lower interest rates and

continuing lower home prices. However, since prices, especially at the lower end,

are showing signs of heading up, this is the time for buyers to act.

DIRECTION OF THE MARKET:

We're not out of the woods yet; this is not a

housing market that has "recovered." Nonetheless, there are more positive signs in

the Northern Virginia marketplace today than any time since the market peaked in

2006. The emerging recovery will be uneven, with upper bracket homes taking

much longer to see price appreciation, but things are definitely looking up.

KEEP IN MIND STATISTICS VARY FROM ZIP CODE TO ZIP CODE AND SOMETIMES EVEN STREET TO STREET. IF YOU WOULD LIKE A MORE DETAILED REPORT ON YOUR LOCAL MARKET, JUST DROP ME A LINE & I WILL BE HAPPY TO SEND THEM ALONG.

I just got off the phone with a local well know credit union and boy is my blood boiling. On Monday, 10/12 I submitted an application to refi our home to take advantage of their low rates. I calculated the costs w/the rates promoted and decided that it would be a great idea to capture 4.75% even if we paid a point or two since we will remain in our home forever more. I received the initial disclosures via email late on Tuesday 10/13 but the fees & rates were higher than we had originally figured, so bright & early on Wednesday morning I called the loan rep to advise her to not proceed with the application. Well, we played telephone tag until this a.m. (10/15) with each of my messages to her stating clearly that we had decided not to proceed. This morning she called and I grabbed the phone to discuss other possible options. After a few minutes on the phone I had decided to leave everything the way it is. She acknowledged this and said she would refund my appraisal fee. Well, HOLD ON. You have charged my credit card the appraisal fee? Yes, she replied but she would refund this fee since they hadn't ordered the appraisal. Then I inquired about the $250 processing fee. She admitted that she had already charged this as well. This is where the fun begins:

Per the HERA-MDIA regulation that went in to effect on 7/30/09, no upfront fees can be collected (except the credit check fee) until the initial disclosure is received by the consumer. The gray area is what they decide is delivery. If hand delivered (like when you apply in person) then they can charge the fee immediately. If MAILED, they must wait three days to charge these fees. But in our case it was emailed which allows the lender to charge the fee the next business day after the disclosure is received. Since I called the very first thing the 'next business day' and left a message advising her to NOT proceed, this conversation should have been over. But, she continued calling me to discuss our options. As I mentioned we played telephone tag all day but each of my messages advised her we did not want to proceed with the refi.

I feel badly for the POOR CONSUMER who does not happen to have a career in real estate hence does not have the HERA-MDIA regulation hanging on her wall next to the phone. NFCU originally refused to refund the application fee stating that they are charged when you hit that 'send' button. I insisted I speak with the supervisor and after several minutes heatedly interpretting the new regulation, she realized this fee could not be assessed and agreed to reverse the processing fee.

Now I wonder, just what would have happened if I was not an applicant with a 20+ year career in real estate who spends the majority of each & every day keeping up to date on all things real estate. How many folks out there would have realized NFCU was in the wrong could not charge this fee? This is why real estate agents are on this earth. To serve & protect our clients - the consumer.