Uncategorized • September 21, 2022

Market Snapshot for Alexandria City, Arlington County and Fairfax County.

by Bob Hamilton

The Federal Housing Finance Agency (FHFA) estimated, for the state of Virginia, an increase of 7.8% and 14.3% in house prices in 2020 and 2021 respectively.

Concerning Washington/Arlington/Alexandria Metropolitan Statistical Area the values were up 3.7% in 2020 and 11.6% in 2021.

The Market Snapshot presented the Median Sales price, Number of Sold properties, Average Days on Market and Months Supply of Inventory for Single Family and Townhome from January 1, 2022 to September 15, 2022 for Alexandria City, Arlington County, and Fairfax County.

MARKET SNAPSHOT: JANUARY 01, 2022 – SEPTMEBER 15, 2022

	ALEXANDRIA CITY	ARLINGTON COUNTY	FAIRFAX COUNTY

Median Sales price	$850K	$1000K	$741K
	(7%)	(5%)	(7%)
No. Properties Sold	1021	1102	8509
	(-18%)	(-20%)	(-21%)
Avg. Days On Market	14	17	13
	(-7%)	(6%)	(-7%)
Months Supply Of Inventory	0.15	0.22	0.19
	(36%)	(47%)	(46%)
Source: Market Snapshot, Coldwell Banker Realty (Single Family and Townhome)

For Alexandria City, the Median Sales Price was $850K, an increase of 7% compared to the same period of the previous year. The number of Sold properties reached 1021 units a decrease of 18% and the Months Supply of Inventory 0.15 an improvement of 36%. The dwellings were sold more quickly than the previous year with an average of 14 days on the market (-7%).

Concerning Arlington County, the Median Sales Price was $1000K up 5% from 2021 and, the number of Sold properties went down 20% to 1102 homes. The properties sat longer on the market, 17 days an increase of 6% and the Months Supply of Inventory was up 47% to 0.22 month.

Between January and September 2022, the Median Sales Price was $741K, a rise of 7% between 2021 and 2022, for Fairfax County, and 8509 properties were sold, down 21%. The properties sold quicker with an average of 13 days on the market, down 7% with 0.19 month supply of inventory an increase of 46%.

Source of information: Market Snapshot, Coldwell Banker Realty.

Painting: The Fishing Village (Maine) from Mark Miller.

Uncategorized • September 14, 2022

Buying or Selling, an Update.

by Bob Hamilton

Maurice LeBon

The market is shifting and price appreciation in Northern Virginia is slowing. The shortage of homes for sale continues partly due to the inadequate production of new homes during and after the covid pandemic and the large influx of first-time buyers. Families who refinanced to low interest rate mortgages (2 to 4%) will be reluctant to sell and move up the housing ladder.

If you want to buy now and freeze the price appreciation, you may be interested in an adjustable rate mortgage (ARM). They were not popular during the low rate years. There may be innovations such as longer times between rate changes or capped adjustments coming as the mortgage lenders adjust their offerings to be more competitive. Be prepared to live with your decision for a while.

Should the economy slip into recession and rates drop, a refinance could be possible, and price reductions could be more common than they are now.

Painting: Chemin du Cap from LeBon

Uncategorized • September 7, 2022

The Washington/Arlington/Alexandria area saw the value of homes rise 9.1% during the second quarter of 2022 compared to the second quarter of 2021.

by Bob Hamilton

The House Price Index (HPI) published by the Federal Housing Finance Agency (FHFA) measures changes in single-family home values based on data collected from all 50 states since the mid-1970s. The index is calculated on a quarterly and monthly basis depending on the geographic area. Seasonally adjusted and purchase-only data were used to estimate the HPI used to measure the variations of house prices in this article.

Nationwide, for the second quarter of 2022, the FHFA HPI shows an increase of 17.7% of house prices compared to the same period of 2021, and of 4.2% between the first and second quarters of 2022. We also observe positive annual appreciation for forty-two (42) consecutive quarters (since 2012) with double digits for seven (7) quarters (fourth quarter of 2020 until now).

The HPI for the state of Virginia and the HPI for Washington/Arlington/Alexandria Metropolitan Statistical Area give us better insight into house prices movement for our area. For the studied period, we notice less inflated values for those two geographic areas than nationwide.

In fact, house prices increased 14.6% between the second quarters of 2021 and 2022 for the state of Virginia, and 3.3% between the first and second quarters of 2022. Concerning the fluctuation of the house prices over the years, we noticed similar results as nationwide. Prices rose annually forty-two (42) consecutive quarters (since 2012) with double digits increases for seven (7) quarters (fourth quarter of 2020 until now).

The Washington/Arlington/Alexandria area, saw the prices of housing up 9.1% between the second quarters of 2021 and 2022 and 1.4% between the first and second quarters of 2022. A constant annual appreciation of house prices was also observed for forty-four (44) consecutive quarters (since the third quarter of 2011) with four (4) quarters with double digits (first, second and third quarters of 2021 and first quarter of 2022).

Most major housing experts forecast ongoing home price appreciation in most major market but at a slower pace.

(This blog has been written by Nicole and Bob Hamilton)

Source information: FHFA (Federal Housing Federal Agency)

(Sculpture: Mask in Bronze “ Brise de terre” from Joseline Laramee. To contact the artist : joselinelaramee@gmail.com)

Uncategorized • August 31, 2022

What will happen to home values in the near future?

by Bob Hamilton

For two years now, we have observed an important increase in home values. For the Washington/Arlington/Alexandria Metropolitan Statistical Area prices went up 10.7% between the first quarter of 2020 and 2021, and up 10.8% between 2021 and 2022 for the same period and from April 2021 to March 2022 (one year) prices increased 11.6%.
What are the reasons for that growth and are we going to see an important drop like we witnessed in 2008?
In this market, two factors are responsible for this phenomenon: the inventory of homes for sale cannot meet the buyers’ demand (1.6 months supply in June 2022) and the historically low mortgage interest rates (less than 3.0% for over a year).
Home prices and mortgage rates directly impact how much your mortgage payments will be. Low interest rates allowing buyers to offer more for a property associated with the competition created by insufficient inventory resulted in higher sales prices. Many homes were sold for an amount much higher than list price which is estimated to reflect the market value of the property.
What is the cause of the low inventory?
The low inventory today is related to underbuilding of new homes since the 2008 crash. Before the crisis, the number of new houses increased significantly. The loose lending standards that we observed during that period allowed more people to qualify for a home loan which created higher buyer demand. We ended up with an oversupply of homes which led to dropping prices. The aftermath was that some builders left the industry and the result was a long period with fewer new homes coming to market.
Will the value of homes come down like in 2008?
There are differences between the situation in 2008 and today. We have stricter lending practices compared to the loose lending standards of the previous period, undersupply of homes versus oversupply in 2008, and more equity in homes than before.
The mortgage rates are coming up, 6.0% for a 30 years fixed mortgage rate in August which slowed the demand. Inventory is building up but there still a shortage of homes to meet buyers demands.
Despite those factors, most major housing experts forecast ongoing home price appreciation in most major market but at a slower pace. For 2022, the average price increase forecasted is 10.3% according to different institutions ( Fannie Mae, Freddy Mac , NAR, Zelman, Corelogic, HPES, and MBA). We are still a sellers market (1.6 months in 2022).
Is it worth it to buy a home?
Buying a home is an excellent financial investment. It is a wealth creator which is mainly built by price appreciation gains, with many economic and social benefits. In fact, over the last 12 months Corelogic reports the average homeowner gained roughly $64,000 in equity due to home appreciation.

Sources: FHFA (Federal Housing Finance Agency), Corelogic, NAR.
(This blog has been written by Nicole and Bob Hamilton)
(Sculpture: “Salmon vendor” (Vendeuse de saumons) in Steatite from Quebec. Artist, Joseline Laramee. To contact the artist: joselinelaramee@gmail.com)

Uncategorized • August 24, 2022

Avoid paying capital gain taxes upon sale of a real estate rental investment.

by Bob Hamilton

Investors that own property individually or with a group of people can be subject to high capital taxes gain when the associates desire to sell. To avoid paying capital gain taxes the answer is a 1031 exchange (often referred to as a “Starker” exchange).

What you accomplish by this process is carrying over the capital gains from the owned property to the new property acquired with the proceeds of the sale of the former property. One of the rules for the exchange is that the transaction must be a like kind exchange (property).

What is most interesting is when the investor who is the owner of the property dies, his heirs will receive the property at the current market value at the time of death. Accumulated capital gains over the years on the properties are erased from capital gains tax considerations.

This is a choice that should be considered by property investors when contemplating disposing of rental property.

The involvement of an intermediary and the time limits for execution are a few of the technicalities that have to be applied.

Call us if this strategy is of interest to you.

(“Divine musique” Bronze by Joseline Laramee (Quebec). You can reach the artist at joselinelaramee@gmail.com)

Uncategorized • August 17, 2022

For the Washington/Arlington/Alexandria area, the value of housing during the first quarter of 2022 went up 4.6% compared to the fourth quarter of 2021 and increased 10.8% between the first quarters of 2021 and 2022.

by Bob Hamilton

To estimate the variation in the price of housing at various geographic levels, national, census division, state and Metropolitan Statistical Areas, among others, the Federal Housing Finance Agency (FHFA) calculates on a quarterly and monthly basis a House Price Index (HPI) . The index measures changes in single-family home values based on data collected from all 50 states since the mid-1970s. The fluctuations presented in this article are based on seasonally adjusted and purchase-only data.

According to FHFA HPI house prices rose nationwide 1.4% from April to May 2022 and increased 18.3% compared to May 2021. As for the nationwide statistic, the index for the South-Atlantic Census Division is published every month. Since it covers only the states located in the South East of the country including Virginia, we have a better insight of the movement in the house price for our area. For the South-Atlantic area the value of properties appreciated up to 1.9% in May compare to April 2022 and up to 23.8% between May 2021 and May 2022.

What is more interesting for us is the variations observed at the state level (Virginia) and the Washington/Arlington/Alexandria Metropolitan Statistical Area which are calculated only quarterly.

For the state of Virginia, the first quarter of 2022 versus the fourth quarter of 2021 the prices increased 4.2% and 15.1% compared to the first quarter of 2021.

Concerning the Washington/Arlington/Alexandria area, the prices of dwellings went up 4.6% from the fourth quarter of 2021 to the first quarter of 2022 and raised up 10.8% between the first quarters of 2021 and 2022.

According to Well Doever PhD (1) “House prices continue to rise in May but at a lower pace. …The increases are above historical levels supported by the low inventory of properties for sale”.

(1) Supervisary Economist in FHFA’s Division of Research and statistics.

(This blog has been written by Nicole and Bob Hamilton)

Source of the information: FHFA

(Print Cameron Street, Old Town Alexandria, Virginia by Anna Rolen)

Uncategorized • August 10, 2022

Buy now, buy later, what to do?

by Bob Hamilton

What are the options for buyers in todays real estate market with its ups and downs, persistent low inventory, and higher mortgage rates?

The choices are not easy. Here are some options:

1.- Buy now to avoid the possibility of higher mortgage rates and increasing property values.

2.- Wait for a possible decline in prices or interest rates or both.

3.- Rent until you decide it is the best time for you to move.

Within these three alternatives lie some considerations.

Rising mortgage rates make it difficult, especially for first time buyers who usually have a limited amount of cash available. Buying now and using an adjustable mortgage rate can ease some of the financial cost. Be sure that you can afford those costs if you have to carry the mortgage for a few years. When the rates come down, refinance your house with a long-term mortgage to take advantage of the lower rates. Consider that you will have refinancing costs. If the prices of property continue to increase this could be a good option.

Concerning renting a property, you must take in account that the rents can rise quickly. That should be included in your cost estimation.

(Painting: Old Quebec in the rain from C Saratt)

Uncategorized • August 3, 2022

In this economy, should you consider buying a property ?

by Bob Hamilton

Buying a house is a good investment if you are looking for a hedge against inflation. It is one of the few tangible assets that tends to hold its value. Since 1990, we observed higher House Price Appreciation (HPA) compared to inflation except for the year 2000 (2.3% versus 2.6%). In 1990 the inflation was 3.0% and the HPA 4.0%, 1.8% in 2010 versus 4.9%, 1.4% and 9.2% respectively in 2020, and finally inflation rose to 6.8% in 2021 and the HPA up to 18.0%.

Actually, the most important factor impacting the housing market is rising mortgage rates. Let us not forget that the low rates that buyers benefited from the last few years were historically unusual.

Also, if a recession comes our way, home price will not necessarily decline. Among the six recessions of the last twenty years, we observed a growth of the Home Price (HP) in four out of six crises: increase of 6.1% in 1980, 3.5% in 1981, 6.6% in 2001, and 6.0% in 2020. Two recessions saw a depreciation of the HP: in 1991 with a loss of 1.9% and of 19.7% in 2008.

The inventory level is rising, according to the latest data, so the experts expect moderate price appreciation and more options for buyers. Note that the housing market is still strong.

Source of information: Keeping Current Matters (KCM).

(Painting: Saint Sauveur, PQ, from Rowena Sandford)

Buying Help • June 4, 2022

iBuyer Programs

by Bob Hamilton

What’s the Deal With Those “We Buy Houses for Cash” Companies?

The introduction of iBuyer or “instant cash offer” programs are coming from the new real-estate companies with deep pockets that buy homes directly from homeowners and close the transaction within days. They are not regular folks looking for a home to live in or even rent out. They are real estate investors looking to make a quick profit. The companies typically are looking to purchase a home for the lowest price possible, fix it up as necessary, and sell it on the open market a short time later. Homes can reappear on the market within a matter of weeks or months, but the key is to buy and sell a lot of houses and do it quickly. It gives homeowners the option to forego the traditional real estate agent-driven buy/sell model for one that offers minimal hassle and disruption, and a well-defined and known timeline. But it is important that you understand the “pros and cons” before making a wise decision that is best for you.

Advantages to the Seller

No need to make repairs to the home
Options to cater to the urgency of the client if needed
They receive guidance by local experts in their city
Truly turn-key process to sell their home
- Contracts
- Disclosures
- State laws
- Negotiation

Disadvantages to the Seller

Instant home purchase offers aren’t designed to benefit the homeseller; they are designed to benefit the investor or company
Sellers are positioned to get low offers and still pay fees at or above an agent’s fees

“iBuyers” companies are in the market to make a profit. So offers across the board are remarkably low for potential sellers. On top of the low offers, there are all the additional fees. A big selling point for “iBuyers” is to cut out the agent in hopes to save money on commission. But when you crunch the numbers, most of the “iBuyers” charge you about 6% on commission fees in addition to “holding fees” while they sell your property and “experience fees” for the time they put into the transaction. Add onto that the closing fees and the costs for repairs and it’s costing you a lot more than a traditional real estate agent would. Merely by offering some added convenience to getting a home sold, they often take a very large chunk of the home sellers hard-won equity.

And while we are on the subject of repairs and closing costs, these are things that are negotiated when working with a real estate professional rather than added to the seller’s tab. With an “iBuyers” sale, there is no option for negotiation.

Once your home is purchased, it will likely go back on the market with repairs for a higher price than for what the seller sold in a matter of weeks. While it would be great to find a company that would buy a home at top dollar with no negotiation, that it not what “iBuyers” are out to do. Once they own a property, their job is to flip it for a profit

Advantages of Using an Agent

The singular goal of “iBuyers” type sale is make money. For sellers that are looking to get a home sold quickly without a lot of hassle, it can be done with an experienced agent too. Eliminating agents from the transaction is not the answer to the complicated process of home selling – being prepared and being aggressive is the answer. With the right agent and pricing strategy on your side, you will come out on top every time.

Be sure to stay informed! Invite me or an experienced real estate agent over to talk with you. This should be done after you have received your net offer from “iBuyers” but before you sign any agreement. Let me walk through how much you may really giving up by doing the sale with “iBuyer” Offers. If the sale is good enough for “iBuyers” to go through with it, given the risks involved, it is also something you should closely look into before handing over your equity.

You can learn more by reading this article from Forbes Magazine, iBuyers: Is The Convenience Worth The Cost?

When you’re ready to sell your property, please call us at 703-966-8532 or 703-965-7539 or email us to discuss all of your options!

Selling Help • June 4, 2022

Our Seller Advantage

by Bob Hamilton

You Want Your Property “Sold”!

When it comes to selling your current property, why not choose a Team of REALTORS^® that can, at the same time, offer you Free advice of a Certified Public Accountant (CPA)? That way, you can proceed with knowledge of the financial and tax impact of the numerous decisions involved both before and after closing your transaction. Bob, a CPA and a Certified Distressed Property Expert (CDPE), and Nicole, who also holds the Short Sale and Foreclosure Resource Certified (SFR) designation – The Hamilton Team – can assist you throughout the selling process.

We will provide you with High Quality Customer Service during the entire selling process, including taking the time to understand your wants, needs and expectations, and being honest with you at all times. Our clients needs always come first, and as your Seller’s Agents, we will work strictly for you.

We will advise you on pricing and will assist you with staging your house, implementing a marketing plan to market your property through as many channels as possible, coordinate the home showing process, present all offers in person and advise you on the terms and contingencies, help you to schedule and coordinate completion of contingencies and inspections, and more, including assisting you in the closing process. Our goal is to give you the information you need to make decisions based upon facts, not hype. We also provide all our services in French (Tous nos services sont également offerts en français).

If you’re having difficulty paying your mortgage, we offer a Free consultation to find the best solution for you, be it a “Short Sale”, Foreclosure, or a special financing modification with your mortgage servicer.

If we are the type of real estate agents that can help you, please call us at 703-966-8532 or 703-965-7539 or email us today. We look forward to work with you.

As a Seniors Real Estate Specialist® (SRES®), we are uniquely qualified to assist seniors in housing sales and purchases. The SRES designation is awarded only to REALTORS who have successfully completed a series of educational courses on how to help seniors and their families with later-in-life real estate transactions. They also draw upon the expertise of a network of senior specialists, such as estate planners, CPAs, and eldercare lawyers, and are familiar with local community resources and services. As an SRES, our mission is to help seniors and their families navigate the maze of financial, legal and emotional issues that accompany the sale of the home. If you find the need of a Seniors Real Estate Specialist®, please call us at 703-966-8532 or 703-965-7539 or email us today. We look forward to work with you.