Water, Water Everywhere. . .
June 5, 2006 | Leave a Comment
Fluvanna and Louisa counties have been working for quite some time on a possible water pipeline to bring water from the James River through Fluvanna to Palmyra and Zion X Roads. This water is desperately needed in Fluvanna if there is to be any commercial development in the county. Not to mention it is an integral part of Fluvanna’s plan to build a new high school. The project helps Louisa as well, by enabling further development of the Zion X Roads area, which has been stalled by a lack of water. In what could be viewed as a minor setback, the pipeline was only approved for 3 million gallons/day, as opposed the the requested 6 million/day. No matter how much the final total is, any water that is available to the counties will be a benefit to the area’s residents and potential visitors.
Blog Mess-Up
June 2, 2006 | Leave a Comment
It recently came to my attention that the links I have been giving for articles posted on Inman News aren’t vaild anymore. As such, when I use things from Inman, I will just quote them directly in my posts. Sorry for the inconvenience.
How to Deal With Garden Pests
June 2, 2006 | Leave a Comment
Let’s say you’ve spent tremendous time, effort, and money to get a great looking garden. The last thing you want is little insects chewing up your hard-fought greenery. Read this article to learn tips for dealing with garden insects.
Of course if you live in a neighborhood like mine, the bugs are not near as dangerous as the deer. . .
Improvement Tips for Teak Furniture
June 2, 2006 | Leave a Comment
I love outdoor teak furniture. It is natural, and I think it looks pretty cool. So, what happens if you "accidentally" try to clean it and end up doing more harm than good? Well, read this article to find out.
A Different Perspective on ARMs
June 2, 2006 | Leave a Comment
You have probably read some of my past posts about how to get out of an ARM. Now, for the other side of the debate:
Should ARM Borrowers Refinance or Stand Pat?
Home owners who took out adjustable-rate mortgages are facing big payment increases. But refinancing may not be the best solution, experts say.
ARMs made up 42 percent of all new home mortgages in 2005, up from 14 percent in 2003, according to LoanPerformance, a San Francisco-based research outfit.
As one example of how payments have increased, the starting rate on a 3/1 ARM — a loan with a fixed rate for three years — has risen to 6.17 percent from 3.80 percent in 2003. That translates into a $220-per-month increase.
But before they refinance to lower their payments, ARM borrowers should consider standing pat. If the annual adjustment is capped at 2 percent, the rate will rise to 5.8 percent in the first year — that’s less than a 30-year fixed rate right now.
Plus, refinancing costs are high, says Keith Gumbinger, vice president of HSH Associates, which tracks the mortgage industry.And by the time another year rolls around, rates could go back down.
Gumbinger is among those who believe the Fed’s next move will be to push rates back down to jumpstart a slowing economy.
Source: SmartMoney, Reshma Kapadia (06/01/2006)
So maybe refinancing that ARM isn’t such a good idea afterall. Like any changes you make to your financial picture, you should consider it carefully. Everyone’s situation is different, and what works for me, may not work for you. Sometimes what seems like a good idea today may not look so good in a few months or years.
Area Down 36% for May
June 1, 2006 | Leave a Comment
It is time to look at the Charlottesville area sales statistics for May. I pulled them for the Charlottesville MSA, and then broke them down by county. As always, the statistics are coming from the Charlottesville Area Association of REALTORS MLS. The statistics only reflect properties listed in the MLS and do not include land sales. Numbers represent closed transactions.
May ‘06 May ‘05 Change YTD Change
Albemarle 113 198 -46% -31%
Charlottesville 51 56 -9% +12.1%
Fluvanna 43 66 -35% -21.2%
Greene 23 28 -18% +1.7%
Nelson 13 34 -62% -37.6%
Area Totals 243 382 -36% -21.3%
Although not in the Charlottesville MSA, Louisa was down 33% for May, and is down 14.7% on the year.
If these statistics teach us only one lesson, that lesson is that THIS IS NOT 2005. The days of skyrocketing appreciation and homes selling in days, not months, are gone. That is not to say that this is going to be a bad year. I don’t think that values will depreciate, not over the whole area, but selling a home today is definitely going to take more patience and persistence than it would have taken a year ago. Sellers are going to have to be willing to make concessions that they may not have made a year ago, due simply to the increased inventory from which buyers may choose.
On the buying side, they are definitely in the driver’s seat at this point. There are many homes to choose from, many of which have been on the market a long time. If you are the type of buyer who doesn’t have to move in 30 days or less, and can afford to shop around, there may be good bargains to be had.
VA Real Estate Sales Down 14%
June 1, 2006 | Leave a Comment
Inman News recently posted an article announcing the Commonwealth’s sales results for April. The statistics came from the Virginia Association of REALTORS. The bottom line, Virginia sales were down 14% compared to April of last year.
On a good note, just as I first reported here on the blog, April sales in the Charlottesville area were actually up when compared to last year.
On Friday, I will post the May sales results for the C’Ville area.
Follow-Up to IRS Ruling
June 1, 2006 | Leave a Comment
On Monday, I posted an article regarding a recent IRS ruling that could spell the end of down-payment assistance corporations. These non-profits are responsible for "gifting" purchasers the down-payments that they could not otherwise afford. Many people credit this non-profit corporations for increasing the amount of financing available to buyers with questionable financial backgrounds.
A recent article from Inman News describes reaction to the IRS ruling. As always, there are experts on both sides of the fence. Some feel the ruling opens the way for enhanced consumer protection in the mortgage industry, while others feel that inhibiting these non-profits could lead to an exacerbated slowdown in the real estate market by limiting potential buyers.
From the article:
"There has been a tremendous effort to introduce a whole new segment of American society to home ownership," Mark Dotzour, chief economist at Texas A&M University’s Real Estate Center, said. Dotzour said there used to be three barriers of entry for home ownership: lack of income, lack of down payment, and lack of quality credit rating.
"To attack the issue of home ownership and increase home ownership among minorities, creative loan programs have been offered in the last few years to allow people to buy homes," Dotzour said. "These down-payment-assistance programs were one way to address the barrier of not having a down payment."
While I find Mr. Dotzour’s assessment of the situation to be factually correct in that down-payment assistance does help to address the barriers facing people buying a home, there is a big problem. . .the three barriers he mentions: "lack of income, lack of down-payment, and lack of quality credit rating," are reasonable barriers to have up. It is not a good idea to buy a home if your income is unstable or inadequate, you won’t or can’t save for a down-payment, and/or you have a poor credit rating. It is also a bad idea to loan money to people who have such problems. While, on the surface, it seems like the greater good is being served by increasing home-ownership rates, that ownership is no good if it creates undue financial hardship for the owner. How many people who received such assistance could have benefited to a greater extent by receiving credit counseling to improve their FICO score and financial counseling to help them find ways to save for a down-payment, no matter how modest. Both of these things will help people for life, not just enable them to buy a home at a high interest rate with no equity. Things like down-payment assistance are prone to fall victim to the law of unintended consequences. In this case, helping people buy a home now may cause them to experience financial hardship later. Think this sounds crazy? Listen to what the Department of Housing and Urban Development said in the article:
"HUD recognizes that loans with down-payment assistance from seller-funded nonprofit gift providers do not perform as well as loans to borrowers with no such assistance,"
When the government is saying that handouts may not be a good idea, that should get your attention.
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Disclaimer
My name is Daniel Rothamel. I am a licensed real estate agent in the Commonwealth of Virginia and a member of the National Association of REALTORS. As such, I adhere to a strict code of ethics and all laws with regard to equal housing, which is reflected in the content of this blog. My broker is Strong Team REALTORS, 86 Joshua Lane, Palmyra, VA 22963; (434) 589-5800. My VA Real Estate License number is 0225 077325. All of the opinions in this blog are mine, unless otherwise noted.
