February 2016 Hampton Roads Real Estate Market Update

Thursday, March 17, 2016

Hello Hampton Roads,

Happy St. Patrick’s Day! :)

The housing numbers are out for February 2016! What’s the market telling us this month and how did each of the 7 cities do compared with last month?

Let’s take a look:

City	Homes Sold	Median Sold Price	Absorption Rate
Virginia Beach	447	$233,000.00	4.12
Norfolk	206	$169,000.00	5.25
Chesapeake	230	$247,000.00	4.69
Portsmouth	92	$101,550.00	6.98
Suffolk	83	$244,000.00	6.56
Hampton	118	$126,000.00	6.89
Newport News	125	$153,500.00	5.18

From the overhead view, the general trend is towards a seller’s market.  

We see a strong seller’s market in Virginia Beach, Norfolk, Chesapeake, and Newport News which all have an absorption rate of less than 6 months.   On the other hand, Portsmouth, Suffolk and Hampton show absorption rates of over 6 months, but under 7 months.  Six month is an evenly balanced market and anything over 6 months favors buyers which means that there it takes longer to sell existing inventory, and less than 6 months favors sellers which means that the selling period is shorter.

The highest median sold price belongs to Suffolk at $244,000.00 and this city also had the biggest increase in median sold price as compared to last month :  $215,325.00 to $244,000.00, an 11.7% increase.  Portsmouth has the lowest median sold price as well as the largest decrease as compared to last month’s numbers.  The median sold price in Portsmouth, which went from $123,250.00 to $101,550.00, a 17.6% decrease from the prior month.

If you would like more information about the home values in your neighborhood, feel free to visit http://www.YourHomeWorth.us  and feel free to contact me with any questions.

Thanks for Reading,


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Serving your Hampton Roads and Virginia Beach Real Estate needs. Liz Schuyler on Google+

How Much Should I Pay for a House?

Friday, February 19, 2016

Hello Hampton Roads,

How much should I pay for a house is one of top questions home buyers have once they find a house they like.  Of course,  there’s also a second part to that question and it is “How much should I pay for a house and make sure that I’m not overpaying?”.

Sidebar: To find out more about the home buying process in general check out my block post, “Steps to Buying a Home” as well my other post on affordability, "How Much Can I Afford to Pay for a House?"

Each person’s home purchase is unique—the properties are unique and so are the circumstances of both the home buyer and home seller; however there are general guidelines to follow to help  to answer this question.  

Let’s get started!

How much should I pay for a house and make sure that I’m not overpaying?

To answer this question thoughtfully, involves a bit of research and the control of one’s emotions.  Before you can know if you’re overpaying, you first need to know how much other similar homes are selling for as well as what they have sold for.   Your REALTOR can prepare a market analysis to show you current sales activity and sales prices for comparable homes; this gives you a general gauge for market price.  What you actually offer will also depend upon several factors:

• The existence of competition.
• The history and condition of the property.
• Your own personal feelings.

Are you competing with other offers?  If so, you may decide to make your offer more attractive by increase your price by a flat amount of using an escalation clause to increase your bid gradually.  You can also offer better terms, such as a faster closing, and a shorter inspection period.

 

Knowing the history and condition of the property is also helpful to know in determining an offer price. A home that is newer on the market will garner a higher price than a home which has been listed for a long time. Typically the longer a home has been on the market, the more negotiable the seller tends to be.  Additionally if the history of the property shows a series of price reductions, this is also an indication of seller motivation.

Lastly, buying a home is an emotional process and if you don’t control your emotions, they can control you.  If the home is one you absolutely have to have, then you will end up paying a premium for it, and may end up paying more than you originally thought you would.

I hope this thoroughly answers the question about knowing how much to pay for a home without overpaying, but if you have any additional questions, please feel free to reach out to me!

Thanks for Reading,


_________________________

Serving your Hampton Roads and Virginia Beach Real Estate needs. Liz Schuyler on Google+

How to Buy a Short Sale Home

Tuesday, February 16, 2016

Hello Hampton Roads,

Before jumping right in to let you know how to buy a short sale home, it is important that we make sure everyone knows what a short sale is: a short sale is when the home owners are selling the home for less than what they currently owe on the mortgage.  The amount is “short” the mortgage amount, hence the name short sale. 

The reason for selling for less than the mortgage amount is because the current market value of the home will not support the mortgage amount and the home owners can longer afford to make payments and may be currently behind in payments.  In order to avoid a foreclosure, the sellers decide the sell the home as a short sale with the permission of their lender.   If the seller’s bank or lien holder doesn’t agree, then the short sale does not occur even though both the seller and buyer are willing.

Successful short sales tend to benefit all parties:

• The sellers avoid the black mark of a foreclosure on their credit.
• The sellers’ bank avoids a costly foreclosure.
• The home buyer may acquire the property at a good value.
• The neighborhood benefits from having the property properly maintained and cared for. 

So, let’s get into the process of buying a short sale!  (Note: If you would like to learn more about the process from a seller’s side, you can read about it here:  How Do Short Sales Work for Sellers?)   

As a buyer, when you buy a short sale home the price is always a consideration.  In order to get an offer quickly, the list price may be attractively low; sand many times it can be the lowest price in the neighborhood compared to similar homes.  However, it is important to know whether the short sale price is has been approved by the bank. Your real estate agent will be able to let you know this.  If it is an approved price, you can be assured that the bank will accept the agreed upon sales price.  If the short sale price is not approved, the agree-upon price will be submitted to the bank for approval and the bank can accept, reject, or counter. Once the bank agrees on a price that is the approved short sale price.

Generally when considering a short sale a buyer needs to be aware that the property is generally selling “as-is”, which means that the owner will make no repairs. This makes sense because usually the owner cannot afford to make payments or pay of the loan, so how can they afford to make repairs?  As a buyer you have a right to a home inspection, but knowing that the repairs would be your responsibility. 

Also, be aware that when considering how to buy a short sale home, it is important to understand that the typical home-buying timelines do not apply—usually, once a contract is ratified, it may take 30-45 days to close on a property. With a short sale the timeline is uncertain and in many cases the time frame is dependent on the bank, and each bank is a little bit different.   In our real estate business, we have seen short sales take from three to eight months to close and have heard of short sales taking over a year to close. Therefore, to consider buying a short sale make sure your timeline is flexible.

It is also important to be aware of how banks work regarding short sales and foreclosures. Typically short sales and foreclosures are handled in separate departments and have separate timelines. It is possible to be under contract on a short sale property and the property gets foreclosed before the short sale closing happens.

In summary, buying a short sale home entails being aware of the process including:

1. Permission for the short sale itself as well as the final sales price must be obtain from the sellers’ bank.
2. Short Sales are sold “AS IS” and all repairs, inspections, reports, are the responsibility of the buyer.
3. The sales process can be prolonged depending on how quickly the bank responds.
4. Foreclosure is a possibility if the short sale is not consummated in time. 

Buying a short sale home can be a source of terrific bargains to the home buyer who is willing to go through the process!  If you have specific questions or if would like to see what short sales are available in our market, please feel free to reach out to me! 

Thanks for Reading,

 
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Serving your Hampton Roads and Virginia Beach Real Estate needs. Liz Schuyler on Google+

January 2016 Hampton Roads Real Estate Market Update

Monday, February 15, 2016

Hello Hampton Roads,

The January 2016 Hampton Roads Real Estate Market update is available!

If you ready my blog post, “The Best Time to Buy a Home”, you’ll see that January is historically the best time to buy a home so let’s take a look and see how each of the 7 cities in Hampton Roads fared in January 2016.

City	Homes Sold	Median Sold Price	Absorption Rate
Virginia Beach	345	$238,000.00	4.10
Norfolk	159	$169,000.00	5.21
Chesapeake	217	$239,990.00	4.58
Portsmouth	86	$123,250.00	7.21
Suffolk	78	$215,325.00	6.40
Hampton	97	$162,000.00	7.04
Newport News	106	$159,450.00	5.20

The absorption rate shows how many months of inventory are currently on the market in each city. Six months indicates a balanced market and numbers greater than 6 months represents a seller’s market and numbers less than 6 months represents a buyer’s market.  Looking at the table we see that more cities are showing absorption rates favorable to home buyers.  In fact, Virginia Beach and Chesapeake are solidly in a buyer’s market.

Chesapeake had the highest median sold price at $239,990.00 with Virginia Beach running close behind at $238,000.00.  Portsmouth had lowest median sold price at $123,250.00 and also had the highest absorption rate at 7.21.

If you are thinking about buying or selling a home this year and would like more information about the Hampton Roads VA real estate market, please feel free to reach out to me.

Thanks for Reading,


_________________________

Serving your Hampton Roads and Virginia Beach Real Estate needs. Liz Schuyler on Google+

Best Place to Buy Rental Property

Friday, February 12, 2016

Hello Hampton Roads,

Where is the best place to buy rental property? 

There are many factors to think about when determining the best place to buy rental property.

There are some prior questions to consider also, such as, why do you want to buy rental property? Will it serve the purpose you have in mind? Do you have the resources (time, financing, knowledge, property management skill, etc.) to purchase rental property? If you are solid in your decision-making and want to proceed, here are some things to consider about the “where” of rental property.

First, are you planning to manage and maintain the property yourself or hire a property manager? If you plan to manage and maintain, the best place for you may be in an area near your home, provided that the rental market is ok. There may be better rental markets out there, but if the financials work for your area, it may be the best bet.

If you plan to hire a property manager, you can potentially buy property anywhere. This of course requires that you have a trustworthy team to help you buy, manage, and maintain the property.

Second, how strong is the rental market? This is key in determining the best place to buy rental property! There are a few variables to keep in mind. What is the gross domestic product (GDP) of the state or area of the target property? Some people look at economic data for the Metropolitan Statistical Area (MSA). If the GDP is rising and steady over time, then the economy is generally healthy and suitable for buy-and-hold investing. If it is dropping or stagnant, perhaps it is not a good idea to invest. 

If you are looking at property within an MSA, check to see that the MSA is not dependent on one or just a few industries—the more diversified, the better, and the less susceptible to any one industry’s business cycle. Also look at the job and unemployment numbers—lower unemployment and strong job numbers are better for a rental market.

If the numbers are available find the percentage of renters in the market—preferably it will be in the 35% range—because you want to have a higher than average number of renters in your market. Also see if you can find the Housing Affordability Index. If not, you can calculate it—it is the median home price divided by the median family income. In general, a number 3 or lower is considered ok, and the closer to one, the better.

Hampton Roads has traditionally been a good rental market, although some would say it is too dependent on a few industries--military and shipbuilding.  Nevertheless, the are is still recognized as a worthy buy-and-hold market.  For example, based on gross rental yields, our own Newport News is among the top five markets in the country for renting to millennials.

Check out this table on residential rental returns by market:

http://public.tableau.com/views/Q12015ResidentialPropertyRentalRankings/Dashboard1?:embed=y&:loadOrderID=0&:display_count=yes

Regardless of whether you buy-and-hold in your own backyard or someplace else, remember to always do your research and know the market you intend to enter. Once you have determined the right area, do the necessary due diligence on the property you intend to buy. If you do these steps correctly you will have determined the best place to buy rental property for you, and these two steps will help you have a happy and profitable rental property ownership experience. 

Thanks for Reading,

 
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Serving your Hampton Roads and Virginia Beach Real Estate needs. Liz Schuyler on Google+