Jim Rake

"Doubtless one man's loss is another man's gain."

Walter Scott, 1821

Yesterday's New York Times featured an article on the influx of first time homebuyer's who've taken advantage of the current real estate market, which is flush with foreclosured homes for sale. Of course, "foreclosure property" normally means a home priced at a bargain.

The article highlighted a few bright spots in the evolving housing market:

1) Many families, who previously rented, are now finding bargain prices coupled with rock bottom interest rates, resulting in increased purchases.

2) The addition of the first time homebuyers tax credit of $8000.00, coupled with bank incentives (like closing cost assistance for buyers) on listed foreclosed homes has encouraged many to purchase a home for the first time.

3) Additionally, many buyers ar taking advantage of current Federal Housing Authority loan requirements which allow for lower credit scores and a down payment of 3.5 percent of the purchase price of the home.

For many of us in the real estate industry, the Times article is anything but surprising. The price depression is something you'd have to be blind to miss. Coupled with low interest rates, and now, prime buying season, those interested in purchasing a home, who may have been on the sidelines waiting for the dust to settle, have decided it's time to get in the game. Perhaps they've heard the old adage; "Never look a gift horse in the mouth."

If you're one of those on the sidelines, don't you think its time to get moving? Believe it or not, the great deals won't be there forever.

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The latest housing inventory numbers for the local area are:

FAUQUIER COUNTY and the CITY OF FREDERICKSBURG

SPOTSYLVANIA and STAFFORD COUNTIES

Days on Market (DOM) numbers have remained fairly consistent as we head into Spring. With buying season in full swing, next month's indications should give us a better picture of what's in store for this year.

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Have you heard of the Housing Assistance Program (HAP)? Most of us haven't. Why would we?

HAP is a Department of Defense (DoD) program to assist federal personnel who are stationed near an installation scheduled for closure or realignment, who, no fault of their own, are unable to sell their homes under reasonable terms and conditions. The good news is, the program has expanded.

The newly signed American Recovery and Reinvestment Act of 2009 expands the HAP program. Not only does it cover personnel impacted by the Base Closure and Realignment Commission (BRAC), but now has expended to include:

1) Service members and Defense Department and Coast Guard civilians injured, wounded or ill in the line of duty during a deployment, with at least a 30 percent disability rating determined by defense or Veterans Affairs officials, who have relocated or will relocate for medical treatment or due to medical retirement.

2) Surviving spouses of service members and Defense Department and Coast Guard civilians killed in the line of duty during a deployment, or who died from an injury or illness incurred in the line of duty during a deployment. Survivors must relocate within two years of the death to qualify.

3) Service members under PCS orders to a duty station outside a 50-mile radius of their current station. The primary residence must have been purchased by the owner before July 1, 2006, and sold between July 1, 2006, and Sept. 30, 2012. The reassignment must have been ordered between Feb. 1, 2006, and Sept. 30, 2012. Defense officials can designate earlier end dates.

4) Service members and civilians who must sell their homes to relocate because of 2005 Base Closure and Realignment Commission actions during the current housing market crisis, without tying the decline in home values to BRAC. Under current law, the Homeowners Assistance Program assists BRAC homeowners only when it can be shown that declining market value in an area is a direct result of a BRAC-related action.

For many military personnel, this additional coverage is a sight for sore eyes. Those who purchased during the home price run up that went amok from 2003 to its zenith in the summer of 2005, and, are now due to rotate again, are between a rock and a hard place. In most locations, home values have fallen precipitously since 2005. Additionally, many home prices have decreased 35% or more. Financially, selling is not an option. Instead, many home owners have decided to rent out their homes. Sometimes to the tune of a loss of $500 - $800 dollars a month. But, how long can any member of our military afford to lose that kind of money?

For uniformed personnel, if you haven't already, take the time to learn about what the Housing Assistance Program has to offer. According to the U.S Army Corps of Engineers contact I talked to last week, the program should be off the ground during the next month or so. If you're not in the market to sell your home, you probably know someone else in uniform who is. Pass the word. Let them know where to find out about the program. This is a good place to start:

For more information about benefits, eligibility, programs and application procedures, contact:

U.S. Army Engineer District, Savannah
Homeowners Assistance Program
Attn: RE-AH
P.O. Box 889
Savannah, GA 31402-0889 Toll Free Telephone Numbers:
800-861-8144

The program is being administered through the regional U.S. Corps of Engineers regional offices. Already, they are being flooded with applications for the program. Packages are being accepted and processed in the order received. They will begin processing the packages as soon as the Office of the Secretary of Defense (OSD) gives the go ahead, which is expected in late April or early May. So, in other words, RUN, and don't walk to the nearest regional office if you're interested in participating in HAP!

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Our local newspaper, the Free Lance Star (FLS), provided us with housing figures this week. First, on Wednesday, it reported the median sales price for the Fredericksburg area had fallen to the lowest level since April, 2003. February sales figures indicated the median sales price dropped to $190,000. RealtyTrac provides current tracking data for foreclosure properties nationwide. Below is a snapshot of the latest picture of Virginia foreclosures.

Yesterday, the FLS followed up with news that Spotsylvania was #1 last month. First in Virginia in the rate of foreclosures, by county. Again, the figures were drawn from RealtyTrac. As the article reported, Stafford County wasn't far behind, finishing fourth in the state's foreclosure rate.

While many see the foreclosure numbers as bad news, for those in the market to purchase a home, the news couldn't be more welcome. There are a couple of obvious attractions for buyers:

1) Coupled with low mortgage rates, depressed home prices provide a market ripe for the picking.

2) For first time homebuyers ( to qualify for "first time" status, you only need not to have owned a principal residence for three years before buying a house), you also benefit from the recent stimulus package's first time homebuyer's tax credit.

According to the Metropolitan Regional Information Systems sales data, Spotsylvania home sales increased approximately 40 percent from January to February of this year. Some of the increase may be attributed to the move towards the traditional Spring buying season. But, an increase in the number of foreclosed homes, and the lower prices that accompany them, contributed as well.

While many lenders have taken steps to halt foreclosures, according to RealtyTrac, the number of U.S. homes threatened with losing their homes rose 30 percent in February from last year's levels. So, from all appearances, it doesn't appear as if our economic Humpty Dumpty will find himself in one piece anytime soon. And, while buyer's may not feel home sellers' pain, they can certainly benefit from it.

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"We're all going to earn a little bit more money, but none of us is going to get any more time."

Art Moody

For many of us, the warm afternoons and cool mornings that accompany Spring also bring with them a new beginning. In the real estate market, we've just stepped into our prime time, or most active buying and marketing period of the year. And, thus far, it only comes around once a year. The question we have to ask is, "Are we ready"?

As we, as Realtors, meet with our clients, are we prepared to assist them, cousel them, advise them, encourage them, and lead them to a positive solution? While many things have remained the same in the past year, many aspects have also changed. With the abundance of Foreclosed and Short Sale properties entering the market, the ground has certainly shifted. As a result, properties values are drifted lower. Financial options have changed as well.

Have you had a chance to look at the Obama Administration's new Making Home Affordable Program? Have your clients? If not, have you informed them of the options available in this package, or other home owner loan modification plans? How about buyers? How do the market changes affect them? What is your plan for counseling them?

Over the years, I've rooted for many sports teams and individuals. As a fan, there are few things more rewarding than cheering for a team that has all the parts needed to do well. Not just one or two superstars, but a team of complimentary members that perform each of their roles well, but working together, are even better. Their synergy allows them to perform at an even higher level as a team working toward a common goal (victory), than their individual, separate efforts by themselves. Unfortunately, while the team may have an excellent record year after year, often, they fail to achieve the ultimate objective, the championship. In considering this, some of the teams that come to mind include the Buffalo Bills of the 90s, the New York Yankees (2001-2007), and more recently, the Dallas Cowboys. Each of these teams appeared to have the best athletes money could buy, but couldn't "close" the deal. They each had the top athletes in the prime of their career, but couldn't climb that last step. Was it a lack of focus? Preparation?

While many armchair quarterbacks have speculated as to why each of them failed to win their respective championships, frequently, the "why" of failure is anything but simple. What we do know is, our prime time, or season when we're at our best, is finite. In other words, it won't last forever. So, it is vitally important to make the most of it. Spend the time wisely. Prepare yourself. If others, like clients, are depending upon you, do your best to make sure they're prepared as well.

Most of us aren't as organized as we'd like to be. However, in our attempts to achieve goals, we ‘d be well served to remember Benjamin Franklin's words"

"By failing to prepare, you are preparing to fail."

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