Is buying real estate in the 23185 Williamsburg, VA good idea?

Asked by Katrina, Williamsburg, VA Wed Mar 25, 2009

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Troy Deierling’s answer
Troy Deierli…, , Sedona, AZ
Wed Jun 24, 2009
In the last month or so we've had multiple offers on a few homes under 225K, which I haven't seen that in awhile. The $8000 down payment from the government may be helping. First time home buyers are not generally buying the 500K homes. The under 300K segment increase would make sense.

I heard today that some in Congress are trying to get the mortgage guidelines relaxed a bit. I believe the banks have the money to loan but the Fed credit requirements right now are pretty restrictive. Whether thats right or wrong I'll leave to others to decide. The housing market is the engine of the American economy and it needs to get moving again for all of our sakes.

The 'Days on Market' at 144 is of concern but from what I've seen this year alone, I would say the tightening of the mortgage guidelines has a lot to do with it. Every week we see people who are otherwise well qualified be denied at the last minute by an underwriter who has once again been given new stricter federal guidelines.

I completely agree that lending practices were far to easy before the economic problems. Overcorrection and making it very, very difficult to get a mortgage is not the answer either. Sales fall apart and sellers and buyers both are rightly unhappy about it. People can't move to the new job or they do and let the house go into foreclosure. It has a very far reaching effect on people and the economy.
0 votes
Carl D. Paut…, , 23188
Wed Mar 25, 2009
Katrina,
Good question. This is a very simple question that would require a full length conversation. Why are you looking in Williamsburg? Are you relocating to the area? How long do you expect to live here? Do you plan to work in the area or commute to larger metropolitan areas like Virginia Beach, Norfolk, or Richmond? What is your motive for the question?

Historically our area has been somewhat sheltered by drastic movements up and down in prices. We have experienced a pull back in pricing just as the national trends have, but as the National Association of Realtors are saying, "Now is the best time to buy".

Our area is a great place to live because of the historical nature of Williamsburg and the surrounding communities. The College of William & Mary offers a great venue for social and sporting events. Strolling down Duke of Gloucester Street during a warm Spring day or seeing the natural decorations during the Christmas season offers a great way to enjoy our communities.

I moved here from California 6 years ago. While I do miss the vibrancy of living in a large city, when I need my fix for larger city life, Richmond is an hour's drive or Washington, D.C. is about 2.5 hours away. I love the idea of spending my family time in this wonderful community.
2 votes
Dan, , Yorktown, VA
Wed Jun 24, 2009
Goof info. Troy,
But you don't think that current DOM is a little bit troubling? It would also be nice if you could list the "average sold" prices for the 2007 and 2005 timeframes so we could see where we are in the process of deflating the "bubble".
Great post for actual, rellevent information though.
0 votes
Troy Deierli…, , Sedona, AZ
Wed Jun 24, 2009
I agree in most part with Carl. We have been somewhat insulated from the worst of the economic crisis. Having a strong military and government job sector certainly hasn't hurt us. The shipyard is still going strong and the College of William & Mary continues to be a large local employer.

Curious if the stats would bear this out, I went to the Williamsburg MLS and pulled some figures.

Here's the stats for the past three months in the 23185 zipcode from the Williamsburg MLS. Homes are selling for an average of 94% of list price. I don't think 20-30% is going to be a realistic starting point.

3-24-2009 to 6-24-2009
103 homes, townhomes and condos sold over the last three months in 23185.
Average list to sale price is 94%
Average list to sold (days on market) 144 days
Average price (sold): $334,901
Average cost per sqft (sold): $145.46

Same period in 2007
Average list to sale price is 97%
Average days on market: 82
Average cost per sqft: $159.33

Same period in 2005
Average list to sale price is 99%
Average days on market is 61
Average cost per sqft is $149.04

Some distressed properties, usually foreclosures, can be had for less but they will generally require fixing up and the bank will rarely agree to do any repairs. Foreclosures are all in the Multiple Listing Service as well. The biggest variance on list to sale price is found in the high end market. Right now we are the market in homes under 300K is doing really well.
0 votes
Dan, , Yorktown, VA
Mon Apr 27, 2009
Yes Susan,
I think it will be a combination of both seller's realizing they're not going to get 2007 prices and some sophisticated negotiations by a good savvy agent that could make this a good buying opportunity.
0 votes
, ,
Mon Apr 27, 2009
Dan,

You are right about the prices going down. In general, I think our price reductions in Williamsburg have lagged those of surrounding areas. We are now seeing more sellers "getting real".

However, it is VERY rare to sell for 20-30% below the current listing prices. Some are certainly 20+ below their original listing prices, but I can't recall any that are that much below the current list price. And, I watch this everyday.
0 votes
Dan, , Yorktown, VA
Mon Apr 27, 2009
Despite what Carl says, this area has NOT been sheltered by the drastic movements up and down. That's a boldfaced lie. As a matter of fact, this area DOUBLED in prices from 2003 to 2007. If you do a little research into what's happening throughout the country to areas that have had such price increases you'll learn that they have ALL fallen and in a big way. I'm not saying that it's not a good time to buy. Sellers are getting desperate and seem to finally be coming off their ridiculous prices. Trulia has added a very nice "price reduction" feature recently and it is a very good tool to use to monitor the market. Check it out and see how much prices are being reduced. If you can find a good agent that is willing to work hard for you, understands and is honest about how ridiculously high list prices are, and is willing and able to negotiate 20-30% off these prices, then it may very well be a good time to buy.
0 votes
, ,
Thu Mar 26, 2009
Katrina,

It is an excellent time to buy. Interest rates are very low, there are lots of homes to choose from, and many of the sellers have had their homes listed for quite some time... so they are motivated! No one knows whether the market has "hit bottom" yet or not, but if you are buying up or making a lateral move, then it really doesn't matter.

Your buying power given the combination of low rates and low prices is very likely at it's peak now. If prices should go down further, the price reductions will likely be counterbalanced by an increase in interest rates.

Take a look at what we have to offer here in Williamsburg. Let me know if I can be of assistance.
0 votes
Lori Jeltema, Agent, Suffolk, VA
Thu Mar 26, 2009
Hi Katrina,

I agree that is is a good idea, depending on your financial situation and your reasons for wanting to buy. I recently sold a home there to friends who, due to the reduced prices, where able to buy the perfect home. Prices where much more last year and the reduced interest rates and reduced prices made it a no-brainer for them. If you've had your eye on Wbg for a while, now is the time to try to secure an affordable home there. feel free to contact me if you need help!
0 votes
Jim Mellen, Agent, Williamsburg, VA
Wed Mar 25, 2009
Of course it is! But it depends on your situation and ability to buy. Prices are holding there own, interest rates are great and if you are a first time home buyer the government is making it very attractive to buy before December 1st. Availablity and motivated sellers have never been better. It also depends on how long you plan to stay. if you're only going to be here for 2 years, rent. if you plan on being here 5-10 years, the odds are you will make money when you sell! I can guarantee though that if you rent, all the money you will be paying will be gone forever!

If you are moving here for work and your options are to rent or buy, buying right now is a great time in 23185,23188. Williamsburg is a safe bet and has faired better than many areas of the country, and even the Hampton Roads area in general.
Web Reference:  http://www.jimmellen.com
0 votes
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