In case you haven't heard... the Urban Land Institute showed the Federal Government the necessities of the metro extension due to traffic load increase projections... apparently we are "on" again... interesting! My pal Penny Pompei at the Greater Reston Chamber of Commerce published an article about this on the Chamber's website - see below. You can also visit www.DullesMetro.com directly for more construction updates, maps, and pictures! Want to hear how the metro extension will affect your property value? Call me!
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A LETTER FROM OUR PRESIDENT
Did You Hear the Trumpets?
By Penny Pompei
Yes, it's actually true, the MetroRail extension to Dulles project funding which fell off the wall into a jagged mess just a few months ago, has been put back together again through good old fashioned grit and perseverance by all the king's horses and all the king's men.
We're not proclaiming that shovels will actually start moving dirt this spring, but the largest impediment to moving the project forward was this approval of $900,000,000 in federal funding. You may recall that the initial response from the US Department of Transportation was that the project did not meet their funding criteria. We may never know what hoops were jumped through in private meetings or conversations, but whoever did whatever they did - thank you from all of us who live and work near the Dulles Business Corridor. (Read the letter addressed to Tim Kaine from the U.S. Department of Transportation by clicking here.)
With a new Urban Land Institute study released this week showing that area traffic will increase by 50% within the next 25 years along with a 23% increase in population, it's pretty easy to see that adding more lanes to the toll road or even increasing the quantity and routes of buses just won't accommodate that many new workers.
Freeing up log jams always creates a burst of energy as all the boxed in logs finally break loose and run pell-mell through the opening taking out all obstacles in their path. Let us hope this holds true for MetroRail!
It's been a hard fought battle and one we hope is finally over. Our legislators return to Richmond in June for a special session called by the Governor to work out transportation funding (see my previous article for more). We'll keep you in the information loop as Dulles MetroRail moves forward. It looks like we may now all live to participate in the inaugural ride of Metro to Dulles International Airport - something that many of us thought we'd never live to see.
Penny Pompei, CAE
President & CEO
Contrary to popular belief, buying real estate isn't ALWAYS the smartest way invest your hard-earned money. In some real estate markets where the rental market is stable and affordable while the purchase market is high-priced, renting MAY be a better option.
There are several factors included which will determine which is better for you. Please talk with a good mortgage planner, ask them to run some numbers for you which will take your income and assets, local real estate market information, and tax advantage information into account prior to making a judgment. You can also use online calculators to give you a rough estimate:
Ginnie Mae offers a calculator to determine which will save you more money in the long run - renting or buying. Try it out, click HERE.
Yahoo! Real Estate Rent vs Buy Calculator, click HERE.
Homebuying is usually never a BAD investment, but, in SOME cases and in some real estate markets, there can be better ones. Your individual circumstances paint a picture of which is better for you.
In certain real estate markets, such as ours here in Reston, VA and Northern VA at large, our real estate market got carried away a few years ago - prices touched the sky! Now we are in the process of normalizing. Although our prices here are still far higher than most real estate markets in the USA, times are better now for buyers - prices are a little lower and mortgage products have become more responsible and safer for today's buyers.
Since our rental market is considered rather stable, enabling renters to rent a property for far less cost per month than the monthly mortgage would be for that same property, it can be a wise decision for buyers to rent with an option to buy. There is a specific process to this scenario, as described below:
You, the buyer, find a rental property you really like and would enjoy owning. Perhaps you have a brand new job and need to have a little employment time under your belt before a bank hands you a mortgage. No sweat! Renting with an option to buy may be just your speed. For example - a 2400ish sq ft house in North Point, Reston, may be on the market for $549k AND for rent for $2200/mo. Sellers can be a little desperate these days and are happy to agree to a lease for $2200/mo with an option to buy. This option is negotiated, and usually in the $300-500 range for such a property. The renter in this scenario makes the monthly rental payment of $2200 AND the agreed upon option payment, let's say it is $350. This additional option of $350 per month is held in escrow by the owner of the property for the duration of the lease, usually 12-18 months. At the end of the lease, the renter has $4200 interest in the property he has rented for the last year ($350 times 12 months = $4200). This means he owns $4200 worth of the property. Kind of...
Back at the commencement of the lease, the renter makes a purchase offer in either a dollar amount or agrees to pay the market rate which the property will assess at when the lease is over. This can be a little tricky for the renter, because, the house can end up costing WAY MORE than expected, so, saying you will pay market rate can be a huge risk. Also, saying you will pay a certain dollar amount can be either a huge risk for the buyer or a GODSEND if the market climbs up fast. Usually, sellers wont agree to a certain dollar amount and will be more apt to agree to a future selling at market rate.
Bad news about a rent with an option to buy (for the renter, that is) - if for some reason you end up NOT wanting to buy (you found something about the property you don't like, you lost your job, you need to move, etc...) you can end up losing the $4200 for failure to perform (buy the property as you promised) UNLESS you have a great relationship with your landlord and he/she is willing to do you that favor...
So, consider your options carefully, PLEASE! If you have questions, please call or email me - renting with an option to buy can be a good tool when used the right way. I will help you weigh your options to determine if it is the right option for you.
Ok, folks. Here is my 2cents. Loudoun County is not the ONLY county approving property tax hikes BUT since they are the most recent, I will pick on them! :)
With selling your property being so dicey and buyers standing back from purchasing because of the volatile market, a county deciding to increase property tax seems to be asking for more foreclosures, as far as I can see.
Our real estate market got out of control EXPENSIVE a few years ago AND anyone with a pulse could get a loan. MY bet is these two factors were tied together, what do you think?
Anyway, after this mess a few years back which sent prices sky-high, we are stuck with a bunch of folks who can't afford their mortgages anymore and NO ONE to bail them out of trouble because buyers aren't buying these over-priced properties! Property taxes are already very high and a substantial amount of a monthly mortgage payment. For counties to be asking for more money is simply BAD TIMING! and perhaps asking for more foreclosures, making our problems even worse.
What do you think??
To read more, click here.
What this essentially means is that we are able to fund more borrowers at lower rates with a better guarantee (US Govt), and without having to do a first and second mortgage... remember, second mortgages are often at higher rates than first mortgages. This is good for buyers because now there is financing for folks who wouldn't have been able to get it before. Of course, what is good for the buyer is good for the seller... if the buyer can buy, the seller can sell. Also, FHA loans are not subject to that hateful phrase "declining market". This is good for everyone. Confused? Call me...
Below is an article about FHA loans, as published by NVAR. If you are a lender and wish to comment, please do so and leave your contact info so my clients may get in touch with you with their questions.
LOAN LIMIT RISE FOR DC REGIONAL
The U.S. Department of Housing and Urban Development on March 6, 2008 published new FHA and conforming loan limits, based on median home prices as mandated by the Economic Stimulus Act signed by President Bush in February. New loan limits for FHA and Fannie Mae and Freddie Mac are now calculated at 125 percent of the HUD published median prices, with a floor of $271,050 and $417,000, respectively, not to exceed $729,750. NAR expects the impact on the housing market to be significant because of the infusion of capital into the mortgage market, which should result in lower interest rates across the board. In addition, there will be a direct impact on high-cost areas that previously required borrowers to take out costlier jumbo mortgages. The new FHA loan limits can be accessed online. To find the Fannie Mae and Freddie Mac conforming loan limits, on the HUD site choose "Fannie/Freddie" in the drop-down menu called "Limit Type."
"We believe the economic stimulus bill will quickly have an impact on families and the nation's economy. The loan limits for both FHA and Fannie Mae and Freddie Mac have been increased and this will act as a major stimulus for the housing industry and for those people wishing to own a home," says Richard Gaylord, NAR president.
What This Means for Housing, REALTORS®, and the Economy
NAR research points out that increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of home ownership and will allow nearly 200,000 homeowners to refinance and potentially keep their home. In addition, NAR believes that increasing the loan limits for Fannie Mae and Freddie Mac will bolster the housing finance market, which continues to be severely stressed, by providing an immediate infusion of much needed liquidity to the nation's mortgage market.
An economic impact study conducted by NAR in January 2008 estimated that increasing the GSEs' conforming loan limits would result in as many as 500,000 refinanced loans and could help reduce foreclosures by as much as 210,000. In addition, over 300,000 additional home sales could be generated, housing inventory would be reduced and home prices would be strengthened by two to three percentage points.
Why HUD Took This Action
HUD was mandated in the Economic Stimulus Act to publish new loan limits within 30 days of the bill's signing by President Bush on February 13.
How HUD Calculates Its Median Home Prices
HUD median home prices differ from those published by NAR. That is because HUD uses a variety of sources and different areas to calculate the median home price.
Who Will be Affected
Increased loan limits will have a wide impact. The added liquidity in the mortgage market will help to make mortgages more easily available. Receiving direct help will be borrowers in high cost areas who previously had no recourse except high-cost jumbo loans, and those with high-cost loans who can refinance into lower interest rate loans.
Because our Northern VA real estate market is normalizing and there are large quantities of "merchandise" available, selling your home REQUIRES you to hire a real estate agent who will attend to a few items (and tirelesly):
1. market your home THOROUGHLY on the internet; local directories, craigslist, MLS, websites, blogs, more...
2. stage your home; clean, de-cluttered, fresh paint, neat and attractive curb appeal, more...
3. buyer incentives; home warranty, luncheons, open houses, paid condo or association fees, more...
4. appeal to multiple buyer markets; the one constant is affordability - explore multi-lingual, multi-ethnic, geographic diversity, more...
5. PERFECT PRICING; most listings are over-priced - this is why things don't sell! Even "fixer-upers" and delapidated properties sell when they are priced right. If your home has been on the market and it isn't selling, it is priced too high. Plain and simple.
The KEY to home sales is that we Realtors and home owners work together to position your "for sale" home so it appeals to buyers. If we don't, your home wont sell.
For detailed information on how your home fits into our market and how it will sell, call or email me for a no-obligation report.
Internet resources:
www.zillow.com/wiki/RealEstateWiki.htm
Would you like a list of more sites to check out? Email me LoriODay@gmail.com
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
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