How Obama's Stimulus Plan Helps Buyers and Home Owners

Some potential benefits for buyers from Obama's 2009 Stimulus Plan:

-$8,000 tax credit - a true credit to a first-time buyer, does not have to be paid back if the buyer lives in the subject property for at least 3 years (begins to phase out for couples earning more than $150k, and singles earning more than $75k) for purchases before December 1, 2009
-Increased Conforming Loan Limits - for the Washington, D.C. metro are, loan limits are back up to $729,750; after Jan 1, loan limits were dropped to $625,500

Some potential benefits for home owners from the plan:
-Home Improvement Tax Credit- Everyone's talking about going "Green" - now you can get paid for it. Making your condo energy efficient makes you eligible for a credit of 30% of the cost of the improvement, up to a maximum of $1,500 (or a total cost of $4,500).

We will see when these become official, and how they'll affect the market. With spring around the corner, buyer and seller activity will/is picking up.

Professor Dr. Stephen Fuller's 2009 Economic Outlook - Will the Spring Bring Roses?

Stephen Fuller, PhD: Dwight Schar Faculty Chair, University Professor, Director at the Center for Regional Analysis at the School of Public Policy at George Mason University gave a talk last week on his 2009 Economic Outlook. Here's a recap of what the experts predict for our local Washington, D.C. Metropolitan economy and real estate market.

Current Conditions for the Washington, D.C. Area

• Our local GDP (Gros Domestic Product) is positvie: at about 1%, versus the national average at about -2.5%


• Employment: Washington, D.C. had an incrase of about 31,100 jobs from Nov 07 - Nov 08 - one of only 5 cities with positive growth (along with Dalls, Houston, Boston, and Seattle).


• Unemployment Rates: DC is lower than the national average of just over 7% - we're at about 4.5% - We have the lowest unemploment rate of 15 of the largest job markets


• Real Estate Price Trends: It appears that from 1999, the Washington Metro area has experienced an increase of about 8% in average sales price each year for all housing types


• Overall: Arlington has the lowest foreclosure rate of all of the counties in Northern Virginia/District of Columiba/Maryland
  

Future Outlook

• Employment: Overall, they predict a 23.6% employment growth for the entire region


• Economic Outlook: With a little dip this year, Dr Fuller predicts strong growth towards the end of 2008 and into early 2009, he anticipates growth this year and even more into 2010 and beyond.
  

For details on the entire presentation, visit their website at http://www.cra-gmu.org/

Do You Know What a BPO Is? If You're Buying A Short Sale - You Should!

What does a BPO stand for?

Broker's Price Opinion

What does that mean? When a bank gets wind of a potential short-sale, i.e. the seller has gone through the required steps so the bank actually gives them the OK to proceed...they'll ask a local real estate agent to do a BPO. The agent will then perform a comparison with recent sales, market data, the house condition, etc when they set their recommended price.

Here's the key...

If the BPO isn't done....the bank has NO idea, NONE, what the value of the house is. That asset manager sitting at their desk in Tulsa has no way to evaluate the subject property in Virginia without the help of a local expert. Again - real estate is local. This is where the LONG delay comes in with short sales.

Getting the BPO approved means the bank acknowledges the property is up for sale, and at the recommended price. This way, when they get an offer near/at the price, the process to move forward and get the contract ratified can be QUICK!

Short sales can be tricky, and long, and frustrating, and costly (opportunity costs for the time spent waiting). It's better to get as much information as you can before you head blindly into one.

2008 Arlington Real Estate Market Snapshot - Recession? What Recession?

A friend brought a recent Fortune article to my attention, titled "Top 10 Worst Real Estate Markets for 2009." To my utter surprise, #10 was Washington, D.C. He followed this link with "Do you agree?"

My answer is short, but sweet - No. As a matter of fact, (excuse my language) Hell No.

Although I made a plea for everyone to stop reading the newspaper about real estate, I know it's likely to happen. I myself also read the paper...from what I am reading, Arlington and the District seem to be labeled as nearly "Recession-Proof." Or at least one of the best places to live during a recession. So being the economist and statistician that I am, I took my local zip code in Arlington to compare numbers from 2007 and 2008. Take a look below:

Single Family Homes in the Zip Code 22201
Neighborhoods: Lyon Park, Lyon Village, Clarendon, Ashton Heights, etc.

Compare January - June

2007:
40 Properties Sold
Average Sale Price: $885k (not including any seller subsidies)
Range: $505k to $2.2M
Average Day on the Market: 106

2008:
28 Properties Sold
Average Sale Price: $906k (not including any seller subsidies)
Range: $470k to $1.6M
Average Days on the Market: 62

That's a 2.4% INCREASE in the average SOLD price....it's also selling faster, nearly 1/2 the time from 2007

Now Compare July - December

2007:
60 Properties Sold
Average Sale Price: $986k (not including any seller subsidies)
Range: $412 to $1.6M
Average Day on the Market: 104

2008 (YTD):
32 Properties Sold (3 more currently under contract)
Average Sale Price: $907k (not including any seller subsidies)
Range: $507k to $1.5M
Average Days on the Market: 86

With the last 6 months of the year, we see 2008 still has properties selling faster than 2007. While we can't firmly compare prices until December is done, as of this writing, prices dropped about 8% from this time last year.

I can't say that I see a HUGE neon blinking sign that says "run away, run fast" for the local market. I think once we get past the holidays and our new President begins his economic stimulus plan - you should see consumer confidence increase and these numbers will all even out. Our local supply of homes is less than this time year, and with rates as low at they are....I can't imagine HOW D.C. made that horrible Top 10 list.

Sellers REJECT an Offer! How to NOT Sell Your House! - UPDATE

For those of you who read my blog about my attempt at buying a condo in Arlington - and got rejected! - I wanted to give you an update on the property. They did a small price reduction (4%) after about 45 days on the market....and have now withdrawn it, after 70 days on the market.

In this market, I think it's important to keep a level head. That's where Realtors come in, we're here to help keep emotions at bay when dealing with buying and selling. Sometimes seller's don't really need to sell, just like some buyers don't really need to buy...but if you're actually serious about buying and/or selling, it's important to objective.

You've got an offer...work with it! Even if it's low, try and get them to come up a little...if they walk, they walk! But at least you didn't just tell them to Buzz Off!

How Will the President-Elect Change the Washington DC Real Estate Market?

In short - very little.

It's funny that the Washington Post featured an article todaydiscussing administration changes and their effects on the D.C. and Northern VA real estate markets. I had lunch today with one of my best friends who happens to work in the West Wing - just like her, many of her fellow West Wing-ers will be out of a job as of January 20th. So inevitably I asked, "so...who's helping the big guys transition to the area?"

Her response - "most of them already live here. And the ones that are out of a job in January will stick around."

Quickly deflating my balloon of Hope, I realized that I had just had a "duh" moment. Junior staffers currently working at the White House mostly rent, and the ones that will be coming in will most likely follow suit. As for the Chief of Staff, his Deputy, the rest of the President's Cabinet...they'll probably take jobs with lobbying firms right here in Washington.
While I would love to help President Bush sell his beautiful 1600 Pennsylvania Ave house, looks like he already has a buyer for it.

The greatest effect of the election will be in policies implemented, and any rescue plans he plans to implement to jump-start the economy. In case you're not up to speed, here's a recap of what Obama plans to do to help the housing market as part of economic recovery plan.

Hello, My Name is Laura Rubinchuk, and I am a Real Estate Agent. Cue to the Firing Squad.

Many of my blogs have been personal stories that have happened over the past few days. This one won't be any different! After the softball game on Friday night I was recruited to play in, we headed to Old Town Alexandria for dinner to commiserate.

During dinner, some said, "Laura, what do you do?" When I answered that I am a real estate agent, I think half the table almost fell off their chairs. Partly because most people around Northern VA my age are Federal employees, and partly because most of the group worked at the Patent Office. After this announcement, for about a half hour, I had nonstop questions. Here some highlights:

Q: "How did you get into real estate?"
A: "When I was looking for a place to buy, I got along really well with my agent. I was so miserable in my federal contractor job, that he said 'why not give this a try?' I have always been interested in real estate investing, so after this gentle shove, my love affair with sales began."

Q: "Do you get reimbursed for your gas?"

A: "I wish! We pay for everything basically. I do get to deduct my business mileage on my taxes - that's the one nice thing!"

Q: "My agent did ****, was he right?"

A: "Every agent does things a little differently. So I would trust your agent!" If there was an "easy" button for this one, I hit it, because I immediately changed the subject!

Q: "Where do you work mostly?"
A: "Mostly I work in Arlington and Falls Church. But I have done business in Woodbridge, Reston, Alexandria, and other places in Northern VA. I go where my business takes me!"

It's funny how much people don't know about the Real Estate profession. Mostly because they haven't gone through the process of buying and/or selling. I happen to be an open book, so when clients ask me about the business, I answer honestly.

There's a lot to real estate, both buying, selling, investing, and from the agent's side. If you're ever interested in knowing more - feel free to ask!

Celebrity Foreclosures - Ed McMahon Saved!

For those of you who have better things to do than read gossip magazines, Ed McMahon was very close to being foreclosed on for defaulting on his $4.8M loan for his home in Beverly Hills, in Los Angeles.

Thanks to a private buyer, Ed no longer has to worry about that! The former "Tonight Show" and "Star Search" TV host has agreed to sell his home and wiggle his way out of foreclosure.

Perhaps during his time with American Family Publishing, he should have kept one of those big checks to pay off all of his debts!!

Another Hollywood Role Model!

Looking For a Russian Speaking Agent? You Found Her!

Northern Virginia and Washington D.C. are melting pots for different nationalities, ethnicities, cultures, religions, you name it! I'm no exception! The daughter of 2 Russian immigrants (fresh off the boat in 1980), we grew up speaking Russian in my household, and continue to do so today. So! If you're looking for an agent who is fluent in Russian - look no further!!!

I'm happy to help with any new transplants to the Virginia area...call me to find out what Russian sounds like with an American accent! :)

Laura Rubinchuk, 703.283.6120

p.s. the picture is of traditional Russian nesting dolls - who doesn't love them?

'Extreme Makeover' Makes Dreamhome, Now Foreclosure

The NAR published a story today about one of ABC's "Extreme Makeover" past projects:

The sad story of the Harper's and how they were picked for an Extreme Makeover is below:
After losing their 2 year old son to a tragic accident (he choked on his food and paramedics couldn't save him in time), they put in long hours to get their family out of the projects of Brooklyn. They finally saved up enough money to buy a 1,400 sq ft, 4 bedroom ranch just outside of Atlanta.

What they didn't know, was that they had just purchased a 1,400 sq ft nightmare. Plagued by frequent septic tank backups and floods, their possessions and health were soon to be threatened. They sought shelter in their minivan, before THAT was in an accident and taken from them. After attempting to fix a couple of the rooms in the home, a rainstorm produced a gaping hole in the ceiling of one of those rooms.

Cue ABC's Extreme Makeover....and now they live in this:


Or at least, they used to.

3 years later? The Harper Family used the renovated property as collateral to get a $450,000 loan. Now they are unable to pay the bills and the property will be auctioned on the steps of the Clayton County Courthouse on Aug. 5.

Could've been such a good Cinderella story! Just another example of the need for better money management lessons for the US.