Fairfax Living Real Estate Blog

This morning I headed out to get what I thought might be a soggy Washington Post and Wall Street Journal. My carrier(s) were nice enough to double bag them which kept them nice and dry. Both papers had articles going into some detail on the recent extension of the Home-Buyer tax credit. By now, perhaps you are tired of readiing about this but I found the aricle in the Wall Street Journal "The Lowdown on the Home-Buyer Tax Credits" detailed and informative. Just click on the article link.

Every day, I pick up the Wall Street journal and the Washington Post as I head out to walk the dogs. Some days I am excited about what I read but most days lately I wonder why I pay to be tortured like this.

A few days ago, I received the October Statistics from the Northern Virginia Association of Realtors (NVAR) for October. There are some uplifting stats in the newsletter. This morning I read in the Wall Street Journal that companies are slowly ratcheting up hiring but not nearly fast enough to wipe out the high unemployment. Still, more positive than the usual gloom and doom.

Here are the NVAR stats for October. Sales activity for Fairfax and Arlington Counties (just outside Washington, D.C.) and the towns/cities of Fairfax, Falls Church, Vienna, Herndon, and Clifton show a 10.09 percent INCREASE in homes sold above Octover 2008 with 1,604 homes sold in October 2009.

Active listings are down by almost 22 percent and avarage days on market (DOM) decreased to 58 days from 94 days in October 2008. Sales prices were slightly lower at $424,510 versus $427,502 in October 2008. The median price was down slightly to $356,800 from $359,000 last year.

"NAR (National Association of Realtors) economists estimate that  the current tax credit has contributed approximately $22,000,000 to the general economy."

An exerpt from Prashant Gopal, Business Week Reporter

"The recession appears to be over and America's job market recovery should get under way next year (assuming theres no double dip downturn)."

October Market Statistics: http://www.nvar.com/MarketStatistics/MonthlyReports/2009/October2009/tabid/572/Default.aspx

You may have to curt and paste to your browser. 

What do health care reform and real estate sales have in common. On the surface maybe not much. This morning after reading about the House vote in The Washington Post, it dawned on me (in the shower where most of my best thinking occurs) that the health care bill will have an effect on real estate and here is why I think so.

Employers will hold back on employing new people until they are sure how the final bill will affect them. I am already witnessing this through my friends who have had interviews where the employer has said just that. In the House bill, any business with over $500,000 in payroll must provide health insurance or pay a fine of up to 8%. Wow, if I were an employer close to $500,000 in payroll, then I wouldn't hire any more employees. Instead, I would hire contractors, temps, and outsource whatever I could overseas at $3.00 an hour (no lie, you can get quality admin work done in India or the Philippines for that rate).

As I noted, the first thing employers are going to do is wait and see which will keep unemployment high for some time to come. Part two of this scenario is where l hire contractors and issue a 1099 instead of hiring employees (payroll) and issue a W-2 at the end of the year. We as real estate agents realize that its alot easier to get a loan with a W-2 than a 1099 and the same goes for assisting our clients in getting approved for a loan.

Where the additional surcharge on folks making over $500,00 per year and families over $1,000,000 might come into play. I don't have all the ends and outs of what limitations will be to the rich, but the rich are not stupid if they get rich and stay rich (certain celebrities excluded). There may be limits, and I think there will be, on deductions for personal income. That's all the more reason to speak with a tax attorney/estate planner and get your financial house in order. There is not going to be an inflation escalator in the House version of this bill so eventually, we will all suffer from tax creep like with the AMT bill passed two or three decades ago. Most people making over a million a year have tax planners and brokers, etc that they are in regular contact with. These professionals will be getting rich themselves assisting folks hit with the higher bracket taxes and the 5.4% surcharge with forming corporations, LLCs, trusts and other forms of LEGAL tax aversion (notice I didn't say evasion which is illegal) to avoid paying the surcharges. What will eventually happen is that the middle class will end up paying for the health care bill or the whole country will drown in a sea of debt.

Enough of my rant, I actully thought of all of this in about a 5 to 7 minute shower. In theory, I am for a concentrated effort to provide affordable health care to as many Americans as possible at as reasonable a cost as possible. I am against slamming a 1990 page document down the throats of the citizens of this country and calling it health care reform.

One important note about this bill other than we are spending ourselves into oblivion is that the extension of unemployment benefits for 14 weeks (up to 20 in states with high unemployment). The Washington Post reports this morning that the government gets a lot of bang for its buck as nearly 100% of unemployment benefits go directly back into the economy in the form of purchases (food, gas, clothes, etc). How does this help real estate.? That money that is spent in stores helps those people keep their jobs, pay their rent or mortgages and eventually allows them to purchase a home or move up. I mention this as it seems to be overlooked in the discussions about the home purchase tax credit. It is not directly related but it helps the economy which then helps the real estate industry.

The Washington Post Article

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/05/AR2009110505439.html

This immaculate and updated property located in South Arlington is a real gem. If you drove up to the house, and did not go inside, you would miss the charm of this property. As you walk in you enter the foyer, to the right a sunny dining area. You then move through to a thoroughly modern Kitchen and den/Family room area. One bedroom and a full bathroom are on the main floor with two bedrooms and a full bath on the 2nd floor. The basement, which is partially finished, has an office area as well as laundry room and utility area.

The side patio in the backyard is perfect for sitting outisde and entertaining in the warmer months. The fenced in backyard is perfect for dogs and small children to play. This property is a perfect starter home or for young professionals who want single family living without the hassle of a large yard and upkeep. It would also make a great home for empty nesters. Just Reduced to $535,900, and looking at the comps, this property looks like a great home at a great price.

There will be an open house this Sunday (11/8) from 1-4. If you are not already working with an agent, I would gladly take the time to introduce you to this property.

 Here is the MLS Link: Please take a look at the sideshow to see what this property has to offer.

http://mrislistings.mris.com/Matrix/Public/Portal.aspx?ID=33882113132

Which is a good thing if you have any debt and you want to see interest rates low. This goes for mortgages which affect our potential and current clients. As you may be aware, this also affects the value of the USD but at the same time affects our exports. In general, until the economy is at a point of going strong, this is good news for real estate agents, many of us who have some debt, as well as our clients who need to qualify for loans.

An  article of interest from marketwatch.com

 http://www.marketwatch.com/story/fed-to-stay-the-course-on-policy-language-2009-11-04

Naw really? Real Estate is one of those professions that you can back into retirement gracefully. Perhaps you start taking fewer listings, Perhaps you sell out your book of business and take a fee on the sales revenue. I guess once you get so old you cant get out of bed in the morning you should retire but until then, might as well keep on selling. For me, it sure beats being a greeter at Wal-mart.

Here is an interesting article on retirement and why the 70% rule of thumb doesn't work for everybody. The thought process reminds of the book written by Tim Ferris titled the "Four Hour Work Week."

 http://www.marketwatch.com/story/advice-on-retirees-income-needs-is-flawed-2009-10-29?link=kiosk

Rates for mortgages are still very low but have increased for the third consecutive week, Rates haven't been this high since about September 2009. The 15 year fixed rate is still in the mid 4's. Here is a link to the Washington Post from today, October 31, 2009.

 http://www.washingtonpost.com/wp-dyn/content/article/2009/10/29/AR2009102905090.html

This article was from the Washington Examiner dated October 18, 2009. The Principal Daniel Meier is still in office as the Principal presumably until found guilty in a court of law. My only objection is what kind of morals does this teach our youth? Robinson Secondary School is an exceptional high School in one of, if not, the best school systems in the United States. We continually tell our kids not to steal or do drugs, and then this happens...

 http://www.washingtonexaminer.com/local/crime/Teachers_-principals-caught-in-fraud-case-8398445.html

On Tuesday (Oct 27th) I went to a Broker's open hosted by the listing agent Ken Terrell (703) 850-2345. Ken had called me the day before and asked me to come see it. I was impressed with how great a condition this charming home is located at 3200 6th Street S, Arlington, VA 22204. If you drove up to the house, and did not go inside, you would miss the charm of this property. As you walk in you enter the foyer, to the right a sunny dining area. You then move through to a thoroughly modern Kitchen and den/Family room area. One bedroom and a full bathroom are on the main floor with two bedrooms and a full bath on the 2nd floor. The basement, which is partially finished, has an office area as well as laundry room and utility area.

The side patio in the backyard is perfect for sitting outisde and entertaining in the warmer months. The fenced in backyard is perfect for dogs and small children to play. This property is a perfect starter home or for young professionals who want single family living without the hassle of a large yard and upkeep. It would also make a great home for empty nesters. Priced at $559,000, and looking at the comps, this property will not be on the market very long. The MLS number is AR7188945.

For those that are not agents or not working with someone, I would gladly show the property as a buyer's agent. Here is a link through realtor.com.

http://www.realtor.com/realestateandhomes-detail/3200-6Th-St-S_Arlington_VA_22204_1113589133