Brick’s Blog

     The Office of Federal Housing Enterprise Oversight (now there’s a mouthful) is out with its quarterly report on House Price Index (HPI) which analyzes housing price appreciation trends. If you’re interested in the full report is available here. Click on House Price Appreciation Slows Further (November 30, 2006).

     For me, all I needed was this quote from the press release:

“House prices continued to rise through the third quarter in most of the country, but generally at only low or moderate rates,” said OFHEO Chief Economist Patrick Lawler.   “The transition from sizzling markets to normal or weak markets has been orderly so far, and recent drops in interest rates lessen the likelihood that precipitous changes will occur."

     As I continue to say the Richmond market has returned to a "normal" market. I know Chicken Little headlines sell newspapers, but the facts dispute the headlines. 

     Well, Carol Hazard is at it again with her article today on October sales. (Yeah, I finally found a way to link to RTD articles. It takes some work, but it can be done.) Here’s the text to an e-mail I sent Carol asking where she gets her numbers from:

     "In your latest screed, you state "sales of new and existing homes here fell 17.9 percent in October compared with the same month a year ago." According to the statistics I can access, there where 1,366 sales in October 06 compared with 1,444 in October 05. That is a difference of 78 less sales this year or a 5.4% decrease."

     I’ll let you know what answer I get, so stay tuned. Any local market slowdown we are having has been media driven. For the year, the total units sold in the Richmond area are off about 3.5 % from the all time record year of 2005. This is hardly newsworthy or deserving the sensational headlines the RTD uses.    

     This historic marker says:

     "Major General James Ewell Brown Stuart, C.S.A., Commander of the cavalry of the Army of Northern Virginia, died here on May 12, 1864, in the home of his brother-in-law, Dr. Charles Brewer. Cause of his death was a wound received the previous day in defense of Richmond at the Battle of Yellow Tavern. Dr. Brewer’s house was demolished in 1893."

     Be the first to post where the marker can be found and I’ll send you a Blockbuster or Starbucks gift card. 

     I report monthly to Realty Times the market conditions for Richmond area. Below are this month’s comments for October:

     For me, I am tired of hearing from every newbie agent, the news media or any Tom, Dick or Harry you might meet on the street that the Richmond Real Estate Market like other areas of the country has tanked, so I am adding a new statistic to my monthly reporting. From now on, I will report a Sales Price to List Price Ratio. If we were in as dire a market as the public is being led to believe, you would be witnessing larger discounts off the list price of properties. For the month of October 2006, the largest discount in the 5 submarkets of the greater Richmond area on which I report was 3.17 % in Glen Allen. For the other 4 areas, the discounts ranged from 0.61 % to 2.10 %. Historically, 2.5 % off the list price has been considered an appropriate discount in a market, which is in equilibrium.

 

     Numerous other factors belie the dire market scenario for the Richmond area. Cost as valued in Dollars per Square Foot is up across the board for the year. My lender contacts are reporting many clients doing “cash outs” where owners are taking maximum mortgages on their properties. Obviously, the “smart money” believes that their equity can be hedged for a higher return elsewhere. Finally and most importantly, our million dollars sales are already 25 % higher than last year’s record number and we got 2 months left in the year! If we were in the tank would the highest end of the market be performing so well?

 

     I know I sound like a broken record, but for Buyers, there is more inventory than at any point in last 5 years currently available. Besides wonderful inventory, there is an extremely relaxed environment in which to make an informed and unrushed decision. Rates continue to track downward and with increased inventory, there are more “must sell” opportunities. For sellers, they are still discovering buyers want “perfection” and a fair market price. Homes in prime condition are the ones with the sales advantage.

     Everyone has heard Washington described as "first in war, first in peace, and first in the hearts of his countrymen", but who coined this phrase about Washington and when. Be the first to post, the correct answer and I’ll send you a Blockbuster or Starbucks gift card.