Mindy, Other/Just Looking in Virginia Beach, VA

Home Sales Soar as Buyers Look for Deals - Is this true in VA Beach?

Asked by Mindy, Virginia Beach, VA Thu Jan 29, 2009

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Mindy:

Don't worry, prices still have a long way to drop in VA Beach, and there is well over a years worth of inventory available. There are a few deals, but many properties are still way overvalued.

We are in a long lasting recession. The worst hasn't even hit VA Beach yet.

That drivel that people like Helene spew is offensive, and an insult to any intelligent person.

If you have to have a home now, buy.

If you don't have to buy, wait for prices to drop and look for the best deal possible. Use sites like Zillow.com to help you. Use sites like Realtytrac to look at what areas have a lot of foreclosures and associated downward pricing pressures.
0 votes Thank Flag Link Wed Feb 11, 2009
Jeff, our agency doesn't make the contracts, we use the ones provided by us and who do you think writes them for us? Visit a local attorney near you and ask if they will provide a sample contract for you to look at. Whatever your opinion of what you feel is right or wrong, they are constructed to follow fair housing laws to a T. They are designed to protect both parties to the contract. These are the standard contracts that are used in this entire area and the verbage I mentioned comes straight off these contracts. You'll find similiar wording on contracts in many different states/areas.
1 vote Thank Flag Link Sat Apr 25, 2009
An overhaul of the appraisal system might be in order, but they are to reflect like kind sales. Therefore bank sales aren't of like kind. The logic makes sense. I buy houses from people that need to sell, not people that want to sell. Just cause your neighbor has a situation and needs to sell immediately for 10% under market doesn't mean that's a fair comparable sale and a true reflect of the market as a whole. His house price is defined by his situation. If everyone needed to sell, the market would crash horribly. Luckily we still have those crazys' out there that won't lower their price no matter what, and EVENTUALLY someone pays that price, so our market remains somewhat stable. When doing comparisons you have to go like to like, apples to apples. If the market swing went 75% to the bank owned properties then yes, they need to be factored in greatly, otherwise they just become the low comp that gets dropped because of the price and situation. Appraisers are taught to go in rings around that property until you find something similar no matter how far you have to go. That was the huge uproar in Suffolk about waterfront properties. I doubt it was done incorrectly, it was just done by the book, whose to say how fair the book is...
1 vote Thank Flag Link Fri Apr 24, 2009
I would wait at least another year in you are in a position to wait. VA Beach was a little late to the the bubble and will be a little late to correct..

http://money.cnn.com/magazines/moneymag/moneymag_realestate/…
1 vote Thank Flag Link Mon Apr 20, 2009
Sales have definitely picked up since buyers realize that sellers are motivated. They can get closing costs, most likely be able to negotiate off the price and and if they haven't owned a home in three years get the $8,000 tax credit (which is basically a refund on your taxes!) Boy I'd be taking advantage of this time to buy if I was a buyer!!
1 vote Thank Flag Link Mon Apr 20, 2009
Drew:

Good informative post.

Lori:

I guarantee you/your agency is headed for a law suit. No doubt about it. I can't believe you haven't run across an attorney who decided to take you to court.
0 votes Thank Flag Link Sat Apr 25, 2009
Jeff, in addition, the purchase contracts that we use actually have a section that the buyer fills out, when making the offer, that clearly states what lender(s) they are considering getting their mortgage from (paragraph 5 section A if you ever need reference). It's in the offer to purchase and the seller has to actually approve their choice! In addition, the contract clearly states that, should the buyer wish to change lenders, the buyer must obtain written permission from the seller.

Also, if you would have continued down the wikipedia page that you copied the quote..
"Investing is the active redirecting of resources from being consumed today so that they may create benefits in the future; the use of assets to earn income or profit", you would have found the addition quote: Residential Real Estate - "The most common form of real estate investment as it includes property purchased as a primary residence. In many cases the buyer does not have the full purchase price for a property and must engage a lender such as a bank, finance company or private lender. Different countries have their individual normal lending levels, but usually they will fall into the range of 70-90% of the purchase price. Against other types of real estate, residential real estate is the least risky."


"your
0 votes Thank Flag Link Fri Apr 24, 2009
Illegal and actionable? For a seller to accept a contract with a buyer who has a local, non-brokered loan over someone who presents an offer with a prequal from wegiveyouloans.com? Tell me, how many listings did you have between 05 and 07 or buyers sales did you have that fell apart due to a buyer using an internet lender - or didn't close on time? It happens and we, as agents, have to keep our clients informed of what situation will be in their best interest. A seller can take a conventional over a VA offer, a VA over an FHA if they want. Each transaction has it's own unique circumstances that may cause us to advise our clients as to what type of loan may be the strongest. Jeff, do you actually know why VA offers where tough to get through in the previous sellers market? Do you know why it's tough to get some FHA loans to close on specific homes? It's the sellers decision. No one can MAKE you get a loan with someone they trust but that doesn't mean that they have to accept your offer. Put yourself in the sellers shoes..you get two offers. One is from a conventional buyer 20% down, preapproved through a local lender who is able to provide a loan committment with only the appraisal needed. The second is from a company that is out of state, that you never heard of and is subject to being accepted by another party before committment - which means that it could fall through at the last minute. You certainly have the right to apply for a loan with whomever you wish but it doesn't mean that the seller has to consider your offer and instructing the agents to notify potential buyers agents of that wish is the sellers decision. In addition, the sellers often requested that you prequalify with a specific lender first, just in case. It's done on a lot of properties even today. New construction sites do it all the time. They're not discriminating against you, it's their terms. As a buyers agent, the ONLY loan that i had fall apart was when I did not stick to my guns and did not require my buyer to prequalify with a local lender. They used a friend of a friend from some other state and it was a disaster.

The first home that we purchased we still live in and it is going to be a great investment property for us when we move. It is now - it will be later.
0 votes Thank Flag Link Fri Apr 24, 2009
Drew:

Im surprised you don't see the error in your logic on bank owned/forclosed properties not being used in comps and appraisals. While I admit I don't know exactly how they should be evaluated, the appraisal industry needs to follow their guidelines on this issue and include them per whatever rules/guidelines are in place. If we are in a bubble, it needs to correct as quickly as possible. It will be more painful for sellers now, but it will speed up the inevitable correction so we (and buyers) can move on.

Lori:

Two issues with your last post;

1. Your statement about sellers not accepting loans sourced from specific sources (internet/brokers) outlined discriminatory behavior that is illegal and actionable.

2. Buying a home to live in is not an investment. Never has been, never will be.

Investing is the active redirecting of resources from being consumed today so that they may create benefits in the future; the use of assets to earn income or profit.

An investment is the choice by the individual, after thorough analysis, to place or lend money in a vehicle (e.g. property, stock securities, bonds) that has sufficiently low risk and provides the possibility of generating returns over a period of time. Placing or lending money in a vehicle that risks the loss of the principal sum or that has not been thoroughly analyzed is, by definition speculation, not investment.
0 votes Thank Flag Link Fri Apr 24, 2009
"Why do you think including foreclosures innaccurately reflects the market?"

They are classified as distressed sales/REOs, there lacks emotion behind these sales therefore it's simply a price/profit number. Not an overall representation of the market as a whole. If 90% of sales are private owners selling, and 10% are banks dropping prices, does that accurately reflect the market as a whole? Or just a small submarket? While the trend of foreclosures is important, we're merely talking about the sale of foreclosures as it impacts the median price.

Bank owned properties are now it's own larger submarket. It's easy to say that that market is suffering large declines, while the private market isn't suffering these large declines (at least in affordable price ranges). Homes priced 300k - 700k is a terrible market to be in right now, builders are dropping like flies.
You've got to agree at least that using a median value to represent the market as a whole isn't very accurate. But then again the article came from the Pilot, and accuracy isn't their best policy...nor analysis.

After all, the REIN MLS being used as market data is flawed because not all sales are thru agents, such as fsbo, properties bought at auction, taken back by banks, sold to investors. But we can only speculate because the news articles don't indulge in the facts and data, but just the impact of the "story".
0 votes Thank Flag Link Thu Apr 23, 2009
Drew you state: "With most foreclosures being properties under 250k, when those properties resell they will lower the median price of the entire market, and inaccurately reflect the market trend."
Why do you think including foreclosures innaccurately reflects the market? I understand you are an investor but I don't believe that foreclosures should be held from the pricing picture and handled in a vaccum away from other listings. That makes no sense to me at all.
Lori, I know you don't spout the typical "It's a great time to buy" and I respect that. My unit in Phoenix was shut down in 2007 and most of the guys I worked with bought "pre-bubble" so were able to get out pretty much unscathed. But my wife is from Woodbridge VA and I have other family in portions of the D.C. suburbs. We have family and friends who haven't been so lucky. I don't think it can be overstated the damage this market has had on families that bought between 2004-2007.
Let's put it into perspective. If I go out and purchase one of these fantastic deals at 300K in Yorktown and if the "Case-Schiller" and other experts are correct and this area still has another 20% decline that will not be reached until 2011 let's see where the math will take us. 2011 the home is worth 240K. Now the "ship has been righted" and the market turns to a more historical 4% a year appreciation. My great deal will not be worth what I paid for it until 2016.
Now obviously there is some speculation in this scenario but looking at what's happened in other areas of the country that have "bubbled" not out of the realm of possiblity at all. This is the dillemma that face today's buyers. Like others I come on this site because I would love nothing more than to buy a home and want to get a feel for the market from those "in the trenches". I have an idea of when I will be comfortable buying. The limit for me in my area of interest is probably about another 20% drop in current listing prices. Have they dropped that far? Have you been able to negotiate that much off of current listing price recently? If so, then maybe now is the time.
.
0 votes Thank Flag Link Thu Apr 23, 2009
Nothing has replaced the easy lending standards. Large presence of New Military buyers, proximity to water and good schools(people like to live in hampton roads) have slowed the decline not elminiating it. A large number of real estate investors in the area have helped inventory levels (i didn't say values because we do need to buy at a number to make a profit) we buy up the properties that sit when the prices are right, mostly bank owned or short sales.

Dan - Look at it this way. In one month there are at least 30 properties that go back to the banks. Considered sales back to the bank but do not report as sales in the MLS (they were sold back to the bank via auctions and not real estate agents) now lets suppose 10 of those properties form the previous months of foreclosures actually sold with regular inventory too. Now those 10 bank owned properties sold for 20% under their original price tag, all under 175k. Maybe a spattering over 175k. You could easily see how this new influx of bank owned properties selling at a discount has lowered the median price, that doesn't mean values are falling that means banks are dumping properties. With most foreclosures being properties under 250k, when those properties resell they will lower the median price of the entire market, and inaccurately reflect the market trend. Bank owned properties aren't looked at the same in appraisals. Given the chance an appraiser will drop a bank owned property from the comps and not use it. Therefore maintaining market values in the area. The use of Median prices to determine the market as a whole is flawed. Real Estate is local, local to the state, to the city, to the zip code, to the subdivision. Reporters don't realize this, only Real Estate Professionals really understand that dynamic.
I do think the NAR should probably stop saying it's "Always a good time to buy." Maybe actually expand on that and say it's always a good time to buy if you can afford it and the price is right. We are a consumer society but we need to have rules to follow in that consumption.
0 votes Thank Flag Link Thu Apr 23, 2009
Dan,

Glad you didn't buy and lose money at your last place. If we were stationed somewhere and knew we could leave in 2-3 years and knew that we had no intention of keeping the property for a rental, we would not have bought, either.

Loans are not difficult to get here. Yes, loan criteria has tightened and we don't have 80/20's for example but not a lot of people need to used them since we have a lot of VA eligible buyers. A lot of people come here and retire. Yes, we did have VA loans available during the rise in prices but go ahead and call any local lender or agent and ask them how difficult it was to get a VA loan through during this time. There are reasons that that people with VA loans had a hard time but that is another whole explanation. So now, we actually have the VA loans back into the equation. IOW has a rural loan program that is 100% financing, there is still FHA and a lot of people do have 20% down. Yes, surprise, not all VA eligible buyers financed the whole loan! Something that you would not have seen on the consumer side (but was there) in many of the listings here over the years was in the agent remarks section regarding the seller not accepting contracts with brokered out/internet loans. Proportionally, I have very few past clients that have interest rates that are adjusting. I have a few clients that want to move from one town to the next and have to wait till things pick up again it's not a mandatory move for them. The 6% was for VABCH, not even the area I work. I'm just providing numbers that are being asked for, not giving you a sales pitch. If you recall, I'm not going around posting 'it's a great time to buy'. I think it is a good time for some and bad time for some. No one's tyring to convince you to buy a home,obviously you are either not going to be in the area long enough, have no plans on keeping it as an investment or want to wait it out. What you are missing is the point that, for the first time, many people who live and are staying in this area can go out at look at homes and even get a second look without it going under contract. It's a great chance for first time home buyers that are ready to get out of an apartment whose rent is as much as a mortgage payment. When I sell a house and we've gotten the price down I explain that they have just given the market in their neighborhood a lower comp but if this is going to be their home, they are ok with it since they are not planning on selling for years, anyway. Buy..don't buy.. Maybe prices will go down a lot more and you'll feel like it's a better time for you or maybe rates will go back up to 7.25 like they were back in 2000. Buy a $250 house now at 4.5 and pay about 1270 in P and I or see if it drops to 200 in a few years at 7.25 and pay a 1360 P and I. It's a chance each person takes.
0 votes Thank Flag Link Thu Apr 23, 2009
No Drew, I can't say I agree with your Wal-Mart analogy. Unless the NAR is asking agents to work fruit stands and throwing those sales into the housing numbers I don't see how it relates.
Lori,
I was stationed in the Phoenix area from 2005-2007 and got there just as the market started to turn. I was told by many that it was a buyer's market because prices started to stabilize. I held off (THANK GOD!!!). It then went down yoy about 6%, I think. And then CRASH!!!!!!!! Just looking at the trends I don't see how anybody could possibly look at this - 6% as an anomoly or a temporary downturn with the amount of knowledge we have about the "bubble" and the effect it eventually has on the areas that "bubbled". I'm not a mathematician but I do remember something from high school algebra. In a zero sum equation, what you do to one side you have to do to the other. We all know that house values more than doubled in this area in a 5 year span. We all pretty much agree that this was caused by easy lending by the banks. That is now gone, taken away from the equation. Something, that wasn't there before the easy lending, must replace it. And it can't be something that was already there before the bubble like VA Loans, proximity to water, and the very wealthy military presence (I, for the life of me, will never understand this argument). Because if those things alone could support these prices then those prices would have been seen before the easy money came calling.
So my question again is what in this area has REPLACED the easy money lending that will cause this area to sustain the bubble prices that the rest of the country hasn't been able to do?
0 votes Thank Flag Link Thu Apr 23, 2009
Jeff,

Your advice to bring in the 'exclusive buyers agent' when you are ready to make your offer needs a little clarification. If you have already found the house you want THEN bring in a buyers agent to write the offer, be prepared to pay that agent yourself since the reason agents get paid on the buyers side of the transaction is something called 'procuring cause' . The buyers agent is getting paid a fee from the listing side for actually showing the house and being the cause of the sale. If you go around looking at homes on your own, either by open houses or by having the listing agent show you these homes, the buyers agent that you bring into the deal later on will not likely be entitled to the commission being offered. If you want to buy a home on your own, that's fine - everyone has a choice in that matter. Just be careful that you understand who pays who and where those 'big bucks' are coming from! Yes, it is wise to check with dpor to make sure they don't have complaints and get references. Detailed notes, recorded conversations, what do you think is going to happen?? Go ahead and do that if you like or you can ask your agent for a copy of notes and correpondence. If you ask an agent to be a 'professional consultant' it is totally different from having an agent represent you.

Dan, some stats have the MSP for VA Bch down about 6% from this time last year. You can go a few %'s one way or the othe depending on what criteria is used. The numbers you want to focus on are the %'s of fluctuation in the specific neighborhood/areas you are interested in. Since a median sales price can be affected by the fact that 3 large neighborhoods of new constructio townhomes or condos have been sold recently vs single family homes (an example) the median price would be down because the listing price of these units are less. Just like either adding or omitting new construction homes from your time on market stats can make huge differences. Some homes are put on the market prior to construction, some are put on and taken right off at the time of sale. Bring your focus in smaller and that will help you pick apart the information and have it apply towards you.
0 votes Thank Flag Link Wed Apr 22, 2009
Sales may be up but median is down. Why? Because bank owned properties are being sold at a loss. A larger amount of lower priced properties selling and less higher priced properties selling alters the median price significantly. That's why using a figure like the median house price doesn't make sense at all. If walmart sold Cars, their median price of products sold would increase, because the middle value is affected more. Just like if they sold 1 cent items it would negatively lower the median of goods sold. It's a horrible indicator of anything. Wouldn't you agree Dan? The article should have dove into the numbers better but they just report what they see, not analyze it. I just recently sold a property in 11 days. It was priced right and improved significantly. I priced it a little under market in a good area. Houses still sell, but if we lost the jets here and the other military installations...I'd move to stay in business buying and selling homes...no VA buyers in this market is deadly.
0 votes Thank Flag Link Wed Apr 22, 2009
Hi Nelene,
How much was median sales price up from March of last year?
0 votes Thank Flag Link Wed Apr 22, 2009
Check out the great news for Housing in today's Virginian Pilot. The spring home selling season is off to a strong start. To quote the Virginian-Pilot, "In South Hampton Roads, 799 existing homes sold last month, up 38% from February. The median sales price in March was $214,000, up 7 percent from $200,000 in February. For all of the skeptics out there these statistics shows that things are certainly beginning to turn around.

Nelene Gibbs, Realtor, e-Pro
William E. Wood & Assoc.
mail to: nelene@homesbynelene.com
Web Reference: http://www.nelenegibbs.com
0 votes Thank Flag Link Tue Apr 21, 2009
Eager Buyer:

I agree not to involve a real estate agent in the initial process if you are a well informed buyer.

However, I would contact a buyers agent, preferably an exclusive buyers agent, as soon as you are ready to make your first offer and have them prepare the offer. This assumes you have already found the best possible financing via three quotes and are pre-qualified.

Do your due dilligence on any agent you use through the BBB and your states licensing agency. If there are complaints, you can find them. The realtor acts as a professional consultant to the property buyer and is being paid a substancial sum of money, therefore you need to pre-qualify them. I would also ask for their certificate of insurance and make sure they have errors and omissions coverage.

Keep detailed notes, records, emails and even recordings of conversations if possible. You may need all of this if an attorney becomes involved during the process.
0 votes Thank Flag Link Mon Feb 23, 2009
Eager Buyer: I am sorry you are so anti-realtor. As professionals, Realtors provide a valuable service to their buyers and sellers. Buying a home without a realtor is like going to court without an attorney, you can certainly do it on your own but you have no real representation and the outcome can be very uncertain. Also, it is not the buyer that pays the Realtor, it is the seller. Buyers can use a Buyer Agent with no cost to them.

In Virginia, the listing agreement , which is signed when a homes is placed for sale, provides that the SELLER pay brokerage fees for both the listing firm as well as the selling firm. The buyer does not pay any fees to his agent. It is to a buyer's advantage to work with a Buyer Agent.

I would not want to be a buyer, conducting the largest transaction of my lifetime, without a professional working for me that could advise and negotiate on my behalf, especially when someone else is paying for that service.

For those that choose to go it alone I wish them luck!

Nelene Gibbs, Realtor, e-Pro
William E. Wood & Associates
Serving all of Hampton Roads
Web Reference: http://www.nelenegibbs.com
0 votes Thank Flag Link Sun Feb 22, 2009
Mindy: Find a great rental. You will be very happy. You can save all the money you would give to the REALTORS, taxes, etc. You will get a great place and save a ton of money. I like the idea below about using your savings from using a REALTOR to buy a boat. So much fun!!!!!
0 votes Thank Flag Link Fri Feb 20, 2009
Dan: Sorry you have not had any luck finding a home but there are many "great" ,as Drew responded, deals to be had. It is important to identify the area in which you wan to live by checking the schools, crime stats, commute, etc and then just start your search. You need a good realtor that knows the market , is willing to do the research, and can work on your behalf to negotiate the best deal. You should certianly be able to find a property that meets your needs . There are many properties on the market today that are actually selling far below what one would expect to be market value. A lot depends on the seller's motivation and how soon he needs to move. I agree that there are many sellers out there still trying to hold on for top dollar and those are the homes that are sitting on the market longer. There are many bank owned properties in our market nowl that are going for thousands below market value. I would be happy to meet with you and help you find some "great deals" in the areas in which you are looking.

Nelene Gibbs, Realtor, e-Pro
William E. Wood & Associates
0 votes Thank Flag Link Fri Feb 20, 2009
I don't buy good deals, I buy great deals all the time. I market for great deals myself. I know another investor that just got a bank to discount a property as a short sale, built in 2006, city assessment over 280k, and they got their offer accepted at under 155k. I'd call that a great deal, wouldn't you? 5 bedroom, 3 bath, 2500sq in Chesapeake. Sounds like a deal to me. Deals are out there, you just have to create them, or have them find you. You can check out my website and see four great deals I already found and fixed and looking to resell at below 2009 prices. You could make offers on listed properties at what you would consider 2004 prices, someone will eventually accept it. Why not go out there and try it, then report back to us.
0 votes Thank Flag Link Fri Feb 20, 2009
Good deals Nelene? List five good deals in our area. Just copy and paste it along with the price of these 'ggod deals" in 2004 before the "ponzi scheme" was started. It would also be appreciated if you posted a comment on how that "good deal" is in relation to the average/median income in our area, the rating of the schools in those districts, commute to most occupational centers and of course, numbers on crime statistics. Don't mean to sound sarcastic, but I've been in the market to buy a home for several months now, have a good income, well above the median average in this area, and for the life of me, I can't seem to find these "good deals"!!!!!
0 votes Thank Flag Link Fri Feb 20, 2009
Hi Mindy:
I must disagree with the comments made by Eager Buyer. You can certainly sit and wait for years and years to buy but you are missing out on the opportunity of home ownership and the many benefits that it affords. In addition to the income tax savings of home ownership, there is no guarantee that interest rates will ever be lower. We haven't seen these type of interest rates for nearly 50 years and I don't know about you, but I don't have another 50 years to wait for lower rates to come around again. Once the glut of foreclosures clear the market we will certainly see a stabilization of the housing market and a return to normal for house values. There are many good deals to be had right now.

Nelene Gibbs, Realtor, e-Pro
William E. Wood & Associates

Web Reference: http://www.homesbynelene.com
0 votes Thank Flag Link Fri Feb 20, 2009
Mindy. Hold tight. Ignore "Real Estate Pro"'s like Nelene. You will have years and years of time to sit back and wait for a very good deal. Anyone that tells you to buy this second is not looking out for your best interest.
0 votes Thank Flag Link Fri Feb 20, 2009
No Mindy,
The deals haven't quite reached this part of the country. We were late to the "bubble" and so it will be longer to wait for the inevitable drop.
0 votes Thank Flag Link Fri Feb 20, 2009
Buyers that have been sitting on the fence are beginning to realize there is no better time that NOW to buy a home. They are taking advantage of the fact that inventory is abundant and prices are lower than they were a year ago. Interest rates are at an all time low and many sellers are motivated to sell. This is true not only in Virginia Beach and Chesapeake but also in all of Hampton Roads as well. If you don't already have an agent give me a call. I would be happy to talk with you at any time.

Nelene Gibbs, Realtor, e-Pro
William E. Wood & Associates
0 votes Thank Flag Link Thu Jan 29, 2009
Sales are up, values are down. It's just sales vs this time last year. It also was a combination of rates being great, and values being a little bit more affordable.
0 votes Thank Flag Link Thu Jan 29, 2009
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