2013 NOVA Housing Market Changes

With the real estate market in full effect in most areas and more homebuyers jumping off the sidelines, it's important that NOVA residents on the move know what they are in for with this year's housing market. It's no secret that many changes have occurred in the real estate industry over the last few years and with the following list of ways the market has changed, you'll be ready to make an informed decision and purchase in Northern Virginia.

1. Homes are more expensive than last spring
The economy has improved and mortgage rates have declined, thus boosting buyer confidence and demand. As a result, home prices have begun to soar. According to the National Association of Realtors, the national median home price increased 10.1% in November, a big change from the same time the year before. Prices are also expected to rise another 2.1 percent this year.

2. Loans are getting more expensive
Interest rates are expected to rise slightly this year and the costs associated with securing a loan are rising as well. Last spring, the Federal Housing Administration (FHA) increased mortgage insurance premiums for minimum down-payment loans (those with less than 5% down) to 1.75% of the loan. The FHA also raised its annual monthly premiums to 1.25%.

3. Low inventory
While mortgage rates are great, there are not many homes available for sale. Buyer demand and favorable purchasing conditions have homes being taken off the market in no time, yet many NOVA home sellers are not taking advantage of this great time to place their homes for sale. On the contrary, if homebuyers see a property they like, they can be assured it won't last long.

Earle Whitmore

Long & Foster Real Estate, Inc.
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Why Not to Pay off Your NOVA Mortgage Early

Budgeting to pay down the mortgage on your Northern Virginia or DC home may seem like a great idea at the time, but the truth is it doesn't make that much sense given the low-interest rates available.
What should be on your short-term to-do list, or rather where you should be placing the extra savings you planned to put into your mortgage, is building your emergency fund or retirement savings before all else.

"Today's low rates mean you're basically borrowing money free when you factor in inflation and tax deductibility," Greg McBride of Bankrate.com told Yahoo. "Making a larger payment is foolish if you're not doing things like saving for emergencies or retirement first."

With today's low-interest rates, paying off your mortgage early actually has more drawbacks than advantages. Consider where your savings should really be allotted, where you need it most, before channeling it into that low-cost, tax-deductible mortgage only to shave off a few years of payment.

For instance, do not consider paying extra on your mortgage before you:

1. Pay off all of your high-interest credit card balances
2. Build your emergency fund to cover at least six months of living expenses in case of a lost job or other financial setback
3. Make significant contributions to the college-savings plans of your children or other dependents' future education
4. Make the maximum contribution to both you and your spouse's individual retirement funds or 401(K) accounts

As very few people can say they have achieved every item on that checklist, it is best you consider the advantages to contributing to the above items to secure your financial future before channeling that money into an extra mortgage payment on your NOVA home. Just remember, the longer you save for retirement, college, and building emergency funds, the better off you'll be when the time comes to use them. In the long run, you will appreciate saving for the future now and paying off the mortgage later.

Earle Whitmore

Long & Foster Real Estate, Inc.
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Earth Day in Northern Virginia

Earth Day, also known as the modern environmental movement, has been celebrated every April 22 since 1970. Today, millions of Americans celebrate and participate in the fight for a cleaner, better environment. The NOVA and DC areas have a wealth of events to make caring for the planet and participating in the green movement a bunch of fun regardless of your age. In the next week, here are events you can attend to show you care for the environment.

United States Botanic Garden

April 19, 2013

10 AM-2 PM

Conservancy Terrace

A great time to learn to cook with seasonal produce and meet environmental representatives from the area. Come by this event to learn how you can alter your lifestyle to a more sustainable option and more about the plants that support life on Planet Earth.

Union Station Earth Month
April 1-30, 2013
A month-long celebration featuring eco-friendly exhibits and activities to promote sustainability and greener living. On Earth Day, April 22, there will be day-long entertainment with contests, games, and more.

Earth Day at the National Zoo
April 20, 2013 
11 AM-3 PM
No ticket required and free and open to the public. The National Zoo will host green-themed crafts and activities to help visitors learn how to live a better, more sustainable lifestyle. There will also be a children's area where they can make their own plant pots.

Alexandria Earth Day
April 20, 2013
10 AM-2 PM
Ben Brenman Park
This event is focused on eco-friendly options for transportation like walking, cycling, ride-sharing, and riding public transit. There will be recycling and composting demonstrations, live music, and the launch of an Eco-City action plan.

Earth Day at the National Aquarium
April 21, 2013
12 PM-4 PM
The National Aquarium has family-friendly activities to learn how you can help protect the environment. Experts will present animals with talks about those in-house and how they are affected by the environment. Admission is $9.95 for adults and $4.95 ages 3-11.

Earle Whitmore
Long & Foster Real Estate, Inc.
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Real Estate Forms to Purchase Your NOVA Home

If you're planning to purchase a home in the Northern Virginia or DC area, or plan to sell your home soon, you can expect a mountain of paperwork to begin to pile up both online and on paper. It can be hard to determine which forms are most important and which you must read all the way through. The documents listed below are those that every homeowner should be familiar with as they venture through the journey toward purchasing their NOVA home.

Buyer's Agent Contract
Buyer's should be prepared to get their real estate agent's trust on paper, in written form. In order to be comfortable with their decision, always know that your agent has your best interests in mind and this form can act as proof of that. Also called the "buyer representation agreement," this form will give you peace of mind that the agent is working for you.

Seller's Property Disclosure Agreement
As a buyer, you have a right to know about all of the repairs necessary or glitches that homeowners have discovered but not yet addressed. Think of this form as a brief peek into what potentially owning the home might look like— what you would be inheriting if you made the purchase and moved in. Take the time to read this all the way through. You will want to know every flaw, both large and small, involved with your future home.

Purchase Agreement
One of the most important documents in the home-buying process, this is also called the "agreement of sale." There are several sections in this document that are essential to buyers— the "inspection contingency" or home inspection report allows an inspector to come in and assess every aspect of the home. While homebuyers typically foot the bill for the inspection, this allows you to point out the quality and safety of the home. The "appraisal contingency" is also included in the purchase agreement to certify that you are paying market value for your home on the Northern Virginia real estate market.

Financing and Appraisal Contingency Addendum
An addendum to the purchase agreement, all buyers should get familiar with this document. This addition provides the financing terms of the sale— when the appraisal will be ordered and how the two parties involved will react if the appraisal comes back below the offered price. This document is the place to pay attention to the details and deadlines.

Earle Whitmore
Long & Foster Real Estate, Inc.
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Purchasing a Bigger, Better NOVA Home

Have you ever wanted to purchase a larger, newer home in the NOVA area but didn't think it was possible? Well, according to the National Association of Home Builders, you can!

A new study released by the organization says home buyers can purchase a more expensive, newer house and still have the same operating costs as owning an older, existing home on the NOVA housing market.

The NAHB took information from the Census Bureau and Department of Housing and Urban Development's 2011 Housing Survey to determine how utility, maintenance, insurance costs, and property taxes vary depending on the age of the home.

According to the survey, houses built prior to 1960 have average maintenance costs of $564 per year. While homes built after 2008 actually have average maintenance costs less than half of that number— $241. Homes built prior to 1960 have operating costs that average nearly 5 percent of the home's value while homes built after 2008 average less than 3 percent.

Another factor the study considered was the after-tax cost of owning a home by its age. "A buyer can afford to pay 23 percent more for a new house than for one built prior to 1960 and still maintain the same amount of first-year annual costs," according to the NAHB.

While new homes in Northern Virginia area do tend to cost more than existing homes and the mortgage payments are likely to be higher, the lower operating costs of the newer home will give buyers annual costs that could be about equal if they purchased a lower priced, older home with a smaller mortgage payment but higher operating costs.

"Home buyers need to look beyond the initial sales price when considering whether to buy new construction or an existing home," said the NAHB Chairman, Rick Judson. "They will find that with the higher costs of operating an older home, they can often afford to spend more to buy a new home and still have annual operating costs that fit their budget."

Source: National Association of Home Builders

Earle Whitmore
Long & Foster Real Estate, Inc.
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