Wednesday, July 22, 2009

Absorbtion Rates for Richmond (i.e. how are houses selling?)

I am including the absorbtion rate numbers for the first half of 2009 (developed by Jackie Theil of Long and Foster Realtors) in this blog entry. These are important numbers to watch because they predict the strength of the market and whether we are in an environment of rising or falling prices.

We professionals use the absorbtion rate as the most important information in gauging the real estate market. It basically answers the questions; How are homes selling? and how long will it take the existing home inventory to sell off given the rate of sales over the past six months?

The resulting number is "Months of supply of home inventory". Six months supply is ideal. At that level the housing market is stable. A number lower than six months would indicate more demand than supply and home prices rise. The opposite is true with a number greater than six months supply indicating supply greater than demand and prices fall.

Here are the numbers for June 30, 2009 stratified by price range:

Sales price range: Absorbtion rate:
< $150,000 8.48 month(s) $150,000-$300,000 10.30 month(s) $300,001-$450,000 12.47 month(s) $450,001 - $600,000 17.85 month(s) > $600,000 26.36 month(s)

In looking at these numbers you can tell that homes in the lower prices ranges are selling much better than higher priced homes. We are seeing this as a result of more first time buyers entering the market and taking advantage of the $ 8000 first time buyer tax credit.

This is good news for home sellers that what to move up to a higher priced home because the first time buyers are buying their homes and in turn those higher priced home sellers that selling to them and on up the chain.

Although the numbers indicate a greater than six month supply of homes in all price ranges, this is a marked improvement over prior periods. Some parts of the country have rates as high as 25 to 30 months of inventory overall.

It is a relief to see the numbers improving. Note that the buyers market will not last, so get out there and buy a home while prices are still affordable, especially if you are a first time buyer. Remember the tax credit expires December 1, 2009 and it could take more that sixty days to close, so get a home under contract before the end of September or earlier!

Kerry@kerryriley.com
http://www.kerryriley.com/
Kerry Riley of Long and Foster Realtors
409 Strawberry Street, Richmond VA 2322o
(804) 432-2688

Wednesday, July 15, 2009

Redevelopment at GRTC Maintenance Site in Fan District

This is a reprint of the Times Dispatch article today
WILL JONES AND MICHAEL MARTZ TIMES-DISPATCH STAFF WRITERPublished: July 15, 2009
Richmond Mayor Dwight C. Jones wants the city to buy the coveted site of GRTC Transit System next to the Fan District and to guide private development of the property.
Tammy D. Hawley, press secretary to Jones, confirmed the city's interest in the property, currently assessed at $3 million, and said the issue is being discussed by the boards of GRTC and the Richmond Redevelopment and Housing Authority. She said it is unclear what type of development might be planned and whether a sale to the city will occur.
"As I understand it, the idea would be . . . you'd go through a process of issuing a [request for proposals] for a particular type of development," she said. "No RFPs have been shaped for the type of development that would be pursued."
Officials at the housing authority did not return repeated calls for comment.
John M. Lewis Jr., chief executive officer of GRTC, deferred questions about a potential sale and development to the city, which is half owner of the transit system with Chesterfield County. However, he said any deal ultimately would have to satisfy the federal government, which has a financial stake in the transit system property.
"I must get market value," said Lewis, who expects the transit system to move to its new headquarters and operations center in South Richmond at the end of this year.
The Fan-area property, almost 7 acres along West Cary Street between Robinson Street and Stafford Avenue, has been viewed as a prime development site for a mixture of residences, businesses and offices ever since GRTC announced more than two years ago its plan to move.
"Even with today's difficult economy . . . it's still going to be a high demand for that site," said C. Lee Warfield, executive director of Thalhimer/Cushman & Wakefield, a commercial real estate brokerage in Richmond.
Warfield said the best option for making the most of the site would be a sale to a private developer.
"The best opportunity to get the highest quality project . . . would be to have an open process to look at all development opportunities instead of having the public sector develop it," he said.
Hawley emphasized that the city would be seeking private development of the property. She also said the city believes it should play an active role in the process because the site has significant potential.
"The mayor has said he wants the city to grow by design, not by default," she said.
The RRHA's potential involvement would not necessarily be a sign that low-income housing is envisioned, Hawley said. The authority manages public-housing units and a subsidized housing program, but it also routinely holds property for the city, including the Miller & Rhoads building downtown before it was developed as a Hilton Garden Inn and condominiums.
"It's not a foregone conclusion that it's low-income housing when RRHA is involved," Hawley said.
Second District Councilman Charles R. Samuels, whose district includes the Fan, said whatever happens to the property will have a major influence on surrounding neighborhoods. He expects to work closely with Councilman E. Martin Jewell, whose adjoining 5th District includes the GRTC site.
"That's a huge parcel of land, and there's a lot of potential for what may come out of it," Samuels said.
The Fan District Association hasn't been briefed on any potential sale or plan for development of the property, President Barbara Hartung said.

Friday, July 10, 2009

Good News for over-mortgaged homes with adjusting rate loans

July 01, 2009
HUD SECRETARY DONOVAN ANNOUNCES EXPANDED ELIGIBILITY FOR MAKING HOME AFFORDABLE REFINANCINGAnnounces eligibility for borrowers up to 125% underwater in Las Vegas with Senate Majority Leader Harry Reid and Congresswoman Dina Titus
WASHINGTON - U.S. Housing and Urban Development Secretary Shaun Donovan today announced an expansion of the Obama Administration's Home Affordable Refinance Program to include participation by borrowers who are current but up to 125 percent underwater on their mortgage. Under authorization provided by the Federal Housing Finance Agency, borrowers whose mortgages are currently owned or guaranteed by Fannie Mae and Freddie Mac will now be allowed to refinance those loans according to the terms of the Home Affordable Refinance program established earlier this year.

Visit this site http://www.makinghomeaffordable.gov/ and click on "Eligibility" tab to see if you qualify.

Kerryriley.com