Thoughts on the Washington, DC, and Northern Virginia Real Estate Market » first time homebuyer

Is the First Time Home Buyer Credit Coming Back?

Katie Wethman — Mon, 30 Aug 2010 13:12:23 +0000

With the precipitous 27% drop in July housing sales, the first time home buyer credit is getting renewed interest from some heavy hitters in Washington, including Secretary of Housing and Urban Development Shaun Donovan, according to The Hill. Though admitting that just one month of numbers was too little data to say whether the credit will be revived…

“In an interview on CNN, Donovan said the administration is “concerned” about the path of the industry. He defended the Obama administration’s record on supporting the housing market, amid new signs that the market is struggling alongside the broader economy.
Donovan did not rule out a further homebuyer tax credit to support the market.”

While plenty of blogs out there are again predicting real estate Armageddon, personally, I don’t think that the huge drop in July sales really should have been ‘unexpected’ at all. But no one wants to read a meh headline like “Home sales drop as expected in July as would be normal following any artificial force on a market.” (OK, I’m sure editors would shorten that headline, should it ever exist.)

Think about all the second half 2010 first time home buyers who pulled forward so that they could close before June 30 to get their extra $8000. We essentially ‘used up’ the first time buyer segment for at least a few months, and probably the remainder of 2010. By the Spring 2011 market there will be a new crop of buyers. Unless Congress intervenes first, that is.

Note to Congress: Spring is NOT the time to have a first time buyer credit expire. It was a double whammy…end of the usual Spring market–giving a credit to buyers who were going to purchase those homes anyway–PLUS the expiration of the credit. Next time, make the credit active in the late Fall and through February so that buyers are buying up the old inventory and foreclosures that otherwise would be sitting.)

And here’s another tip…if you want to jumpstart home sales with a buyer credit, don’t start hinting around about it to the press…Secretary Donovan essentially just wiped out what few first time home buyers there currently are, who are now all going to wait to see if there’s another credit.

Stay tuned.

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Free First Time Home Buyer Seminar in Arlington

Katie Wethman — Fri, 27 Aug 2010 02:01:23 +0000

Monday, September 20, 2010 from 7:00 – 8:15
Arlington Central Library
1015 N Quincy St 2nd floor meeting room
Ballston (Orange Line)

Though there is no cost to attend, you must contact us to register for the First Time Buyer Class since seating is limited and so that materials are available.

Educating Home Buyers to Enable Better Decisions

Our first time home buyer classes are educational sessions designed to give an overview of current market conditions and the home buying process. We cover a recap of the market, current trends and market stats including days on market, average sales prices, and inventory levels. We’ll also discuss the impact of the banking system collapse and bailout, the home purchase process and common pitfalls, financing basics and a how to get started checklist.

Specific topics covered:
- Northern Virginia, DC, and Montgomery County market analysis
- Mortgage basics: rates, points, fees
- Financing basics: FHA, Conventional, Conforming, and “Jumbo” loans
- Calculating the tax benefits of homeownership
- Short Sale, Foreclosure/REO/Bank Owned basics
- Search tips
- Fees and closing costs
- Buyer agency and choosing an agent

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Is the $8000 First Time Home Buyer Tax Credit Going to Be Extended?

Katie Wethman — Fri, 16 Apr 2010 15:24:50 +0000

Alas, my crystal ball is in the shop.

But I CAN tell you the same thing I recently told the Washington Examiner about the upcoming expiration of the credit: the administration and Congress are under a lot more pressure now to control spending than they were this time last year.

Last year it was all about saving the economy (read: saving the housing market) and pulling us out of our depression/recession. This year it’s all about record deficits, massive new entitlement programs, and the threat of inflation. Even a bill renewing the national flood insurance program and extending unemployment benefits has been held up for weeks. How difficult do you think it would be to renew the home buyer tax credit?

My best guess right now is that the tax credit will not be renewed in its current form.

Learn More:

Read about the tax credit.

Attend a free first time buyer class.

Read the Examiner story about the tax credit deadline.

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Single Women as Home Buyers

Katie Wethman — Sat, 13 Feb 2010 16:05:19 +0000

Single working women are poised to become a financial powerhouse: single women between 25 and 30 are earning more than single men, and women’s earned income is growing faster, according to www.womenhomeowners.com. Even coming out of the current recession, women are positioned better: 82% of job losses affected men, according to the New York Times. For the first time ever, women make up over 50% of the work force.

Consider these home buying statistics from NAR:

Single female buyers accounted for nearly twice as large a share as single male buyers for both first-time buyers (24 and 12 percent) and repeat buyers (17 and 9 percent).
Twenty percent of recent home buyers were single females, and 10 percent were single males.
More women (15.5 million) than men (11.8 million) lived alone. Among these, women were more likely than men to own their homes (56% vs. 47%).

But is the home purchase process different for women? What about with other financial decisions like choosing a mortgage, or investment and retirement planning? How should a single woman prioritize? How does she protect her assets going forward?

Come hear from an expert panel of women professional in the fields of financial planning, mortgages, real estate, and conflict resolution. Learn from the experiences of others, discover your options at any stage of life, and make wise financial decisions.

Women, Wisdom & Wealth
Wednesday, March 10, 2010 6:30 – 7:30 pm
Pimmit Hill Regional Library, Falls Church, VA

** This is an educational seminar. There is no cost or obligation; however, you must be registered. Contact us to register for the session. **

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Free First Time Home Buyer Class in Arlington, VA

Katie Wethman — Tue, 09 Feb 2010 00:20:30 +0000

Are you a first time buyer thinking of starting your search? Low pries, historically low interest rates, and the $8000 tax credit have many people in our area wondering if it’s time to buy. Join us for a free educational session at Arlington County Library.

Wenesday, March 3
7:00pm – 8:15pm
Arlington County Library
1015 N Quincy St 2nd Floor Mtg Room
Ballston (Orange Line)

We cover a recap of the market, current trends and market stats including days on market, average sales prices, and inventory levels. We’ll also discuss home purchase process, the tax credit, common pitfalls, financing basics and a how to get started checklist.

Specific topics covered:

- Northern Virginia, DC, and Montgomery County market analysis

- Mortgage basics: rates, points, fees

- Financing basics: FHA, Conventional, Conforming, and “Jumbo” loans

- Calculating the tax benefits of homeownership

- Short Sale, Foreclosure/REO/Bank Owned basics

- Search tips

- Fees and closing costs

- Buyer agency and choosing an agent

There’s never any cost or obligation to attend our classes. Register for this free first time home buyer class here so that we may have materials available for you. More info at www.newhomebuyerclass.com

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Tips for Newly Engaged or Married Couples Buying a Home Together

Katie Wethman — Wed, 03 Feb 2010 16:38:26 +0000

Photo Courtesy of thinkclay via Flikr

I often work with couples who are newly, or soon-to-be, engaged. Being a first time homebuyer is overwhelming enough, without bring another set of opinions in to it! But there are some tips and tricks that I recommend to my buyer clients to help smooth the process:

1) Do you have a home (or two) to sell before you can buy?

The merging of households is a long and often stressful process. If you are both renters, or if just one of you owns, it’s likely an easy call–break one or both of the leases and move in together. If you both own it gets a little tricky. Can the two of you comfortably fit in either or both homes? Can one of the homes be kept as an investment property (preferably a cash flow positive one)? And finally, do you need the equity from one (or both) homes before buying the new one? (Read more about the risks of simultaneous buying and selling here.)

2) What is your budget and financial situation?

The merging of finances is often one of the most difficult aspects in a newly committed relationship. Many couples don’t know their partners financial history or credit score until they get to this point in the relationship. Speak to a lender early and get everything out on the table. It may make sense for you to buy together, or it may make sense for just one of you to purchase the property in your name and add the other to the deed later.

Discuss your joint financial goals. How much will you need for the wedding? How do your combined retirement funds look? Buying a new or bigger home may not be the first financial priority for you.

3) What are you each looking for in a home? What are the true must-haves?

This is where the fun begins, and where I am often involved in the process with my clients. I can’t tell you how many times the woman must have one type/size/location of home and the man absolutely hates that type/size/location (or vice versa.) Welcome to your future of compromise. Go visit some open houses together. Speak with an agent about what’s realistic in your price range and, more importantly, to see if there is a new option you hadn’t considered that will make you BOTH happy.

I was a panelist at last year’s Treasury and HHS Financial Relationship Summit’s “Navigating Real Estate Transactions with Couples” and often work with couples buying their first home together.

If you’d like to talk more about starting your home search together (or selling your home(s) to find your new ‘combined’ home), please contact me.

Learn more: Attend a free first time home buyer class.

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Property Taxes & Real Estate Related Income Tax Deductions

Katie Wethman — Thu, 28 Jan 2010 03:26:58 +0000

Property tax season is upon us, and assessments were mailed out. Seventy five percent of Arlington residents saw a drop, but remember that assessments are a lagging indicator. A lower assessment doesn’t necessarily mean a lower tax bill though…rates are due to increase (read my post about how property taxes are calculated here.) If you live in DC, check your tax bill to make sure you received the homestead exemption – DC often mistakenly omits this important exemption from owner occupied units! If you think your assessment is too high, next month I’ll have some links on challenging your property tax assessment. If you’re in need of some market data to support your case, please contact us!

Income tax season is also here, so homeowners get ready to claim all your deductions. If you bought a house in 2009, remember to provide your HUD-1 to your tax advisor (and a note for my clients…I’ll be emailing you a copy of yours in the next few weeks so that you don’t have to go digging for it.) If you’re claiming the first time buyer credit, be aware that as of right now you can’t e-file, and there could be delays with your refund (read details here). Here’s the form to claim your $8000.

Remember, even if you don’t qualify for the federal first time home buyer credit of $8000, be sure to ask your tax advisor whether you qualify for DC’s $5000 tax credit because the rules are different for each.

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State of the Northern Virginia & DC Real Estate Market: January 2010

Katie Wethman — Sat, 23 Jan 2010 19:18:01 +0000

Spring has sprung early as far as the real estate market is concerned. Buyers are out and circling, anxiously waiting for inventory to hit. I know I’m starting to sound like a broken record, but the lack of ‘good’ inventory continues to be the story in real estate circles. Check out our market data graphs: Arlington is down to 4 months of inventory and Northern Virginia is down to just 3 months. That’s the lowest level of inventory since August 2005. Remember August 2005? When there were bidding wars, and properties sold for tens of thousands above asking?? Looking at the graphs, you can see that the number of contracts stays roughly the same each month (and has for many years)…so it’s not the buyers that are driving market changes…it’s the inventory.

The implication for buyers is very important: 1) get started early because it may take you a lot longer than you think to find the house you want and 2) when you finally do find one that meets your needs, jump on it!

As a result, sellers, if you’re considering selling, NOW is the time to get the house into shape and on the market! There are buyers out there and I recommend you list sooner than later. As this article notes, the economy and tax incentives have upset the seasonal trend of a ‘spring’ market. Please contact us if you would like to discuss how to best prepare and price your home for the market.

Changes were announced on Wednesday for FHA loans, which currently account for 30% of all purchase loans. The upfront mortgage insurance premium was increased from 1.75% to 2.25% of the loan value. While most FHA borrowers can continue to make down payments of as little as 3.5 percent when they take out a loan, those with a credit score of less than 580 will have to make a down payment of at least 10 percent, possibly starting in the early summer. The agency will reduce seller concessions from 6 percent to 3 percent of the home’s value, in line with the industry norm, this summer. They’re also tightening the screws (again) on condos.

I’ve scheduled a First Time Home Buyer class for January 26, 2010 at Arlington Central Library. If you or someone you know is thinking of buying, please contact me to register. The session is free, but space is limited and registration is required. The next class is scheduled for March 3.

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Is Buying a Home One of Your 2010 New Year’s Resolutions?

Katie Wethman — Sun, 27 Dec 2009 18:36:28 +0000

Get started by attending a free, no obligation first time home buyer class at Arlington Central Library on January 26 at 7:00 pm.

Specific topics covered:

First Time and Repeat Buyer Credit Details
Arlington, Northern Virginia, DC, and Montgomery County market analysis (average sales prices, days on market, etc.)
Mortgage basics: rates, points, fees
Financing basics: FHA, Conventional, Conforming, and “Jumbo” loans
Calculating the tax benefits of homeownership
Short Sale, Foreclosure/REO/Bank Owned basics
Search tips
Fees and closing costs
Buyer agency and choosing an agent

Details:

Tuesday, January 26th 7:00 – 8:15
Arlington Central Library
1015 N Quincy St 2nd floor meeting room
Ballston (Orange Line)

Though there is no cost to attend, you must contact us to register since seating is limited and we need to make sure that materials are available for you.

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VHDA Loans Allow Financing of Down Payment

Katie Wethman — Tue, 15 Dec 2009 15:01:23 +0000

The Virginia Housing Development Authority has extended its Homebuyer Tax Credit Plus program to match the deadlines of the Federal First-Time Homebuyers Tax Credit.

VHDA’s program lets borrowers use a second mortgage to finance up to 5% of the sales price (enough to cover FHA’s 3.5% down payment requirement) by using the $8000 first time home buyer tax credit–effectively allowing borrowers to “monetize” the credit. The second mortgage helps cover the down payment and closing costs, with zero interest and no payments for the first 12 months. Borrowers then have the option of paying it down within the first 12 months, using their $8000 credit to pay it off, or paying it off over 29 years.

There are restrictions on the program, of course. Purchase price is limited to $408,100, and gross household income for two or fewer persons cannot exceed $86,900 for the Washington, DC, MSA, including Northern Virginia.

The deadline for the program matches the newly extended deadlines for the tax credit, so buyers must be under contract by April 30 and settled by June 30, 2010.

If you need help starting your home search, or finding a lender, please contact us.

* * * * * * * * * *

Learn More: Sign up for our free first-time home buyer class at Arlington Central Library on Jan 26 at 7:00 pm (registration required) Details and registration information can be found here.

Search the MLS

See more Buyer Resources

* * * * * * * * * *

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