Cautious Optimism Prevails This Summer As Tax Credit Extension Gets Green Light, NoVA Market Gains Slow, Steady Footing
The real estate community commends Congress for the timely passage of two bills to extend the home buyer tax credit closing deadline and reauthorize the National Flood Insurance Program. Both bills were strongly supported by the National Association of Realtors®.
The tax credit closing deadline and the NFIP reauthorization were extended to Sept. 30, 2010. Extending the tax credit closing and flood insurance deadlines will help provide additional stability to real estate markets across the nation, NAR said.
No one could dispute that jobs creation is the number one needed economic stimulus that would have the greatest ripple effect on local economies and consumer confidence. Slow and steady improvement has already taken place in our Northern Virginia housing market, and the market gain, incremental as it may be, that we expect through the summer should help.
Affordability and Low Mortgage Rates: Still the Market’s Silver Lining
According to Kelly Evans in a June Wall Street Journal article about housing sales, the much larger market of existing-home sales should hold up better than that for new home sales.
She reports: “Existing homes run about 15 percent to 20 percent cheaper on average than newly built ones. Sales, while likely to slump this summer, should firm toward year-end if the labor market continues its gradual improvement.
“And affordability continues to improve: falling prices and historically low mortgage rates have lowered typical monthly payments to about 15 percent of household income, down from 21 percent in 2007.”
Government Support Removed: Demand Was Pulled Forward
Wall Street Journal reporter Nick Timiraos reports about the benefit of low mortgage rates and the market’s future…
“Things certainly could be worse if mortgage rates had risen, as most analysts expected would happen when the Federal Reserve ended in March its purchases of mortgage-backed securities.
“That was the first major removal of government support, and thanks to the global economic worries, it was benign. The second major removal—the tax credit—certainly promises to make more ripples in the short term.
“There’s no doubt that the tax credit has pulled demand forward. The big question now is whether the market finds its footing in the late summer and early fall, or if it has to wait until next spring, or later, to do so.”
June 2010 Regional Home Sales
Northern Virginia: June 2010
The Northern Virginia Association of Realtors® reports on June 2010 home sales activity for Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton.
A total of 2,149 homes sold in June 2010, a decrease of less than 1 percent below June 2009 home sales of 2,169.
Active listings increased by about 2 percent from last year, with 7,777 active listings in June, compared with 7,617 homes available in June 2009. The average days on market (DOM) for homes in June 2010 decreased by 38 percent to 44 days, compared with 71 days in June 2009.
Sales prices rose by about 10 percent compared with those realized last year. The average sales price this June was $497,878, compared with last June’s average of $451,354.
The median price of homes sold in Northern Virginia in June was $435,000, which is an increase of almost 11 percent compared with June 2009’s median price of $392,367.
The number of pending home sales in Northern Virginia in June decreased by about 19 percent with 2,002 sales pending compared to 2,463 in June 2009.
Greater Northern Virginia: June 2010
Sales activity and prices in Greater Northern Virginia (NVAR jurisdictions plus Prince William, Loudoun and the Greater Piedmont counties) for June 2010 remained stable compared with last year.
The number of Greater Northern Virginia region homes sold in June was 3,625, less than one percent lower than June 2009’s total of 3,657 sales. But pending home sales were down, with 3,582 contracts pending, compared with 4,465 in June 2009, a difference of around 20 percent.
The average sales price of $428,797 in June 2010 increased by about 12 percent over June 2009’s average sales price of $382,980.
Across Greater Northern Virginia, the number of listings was unchanged, with less than a 1 percent increase over this time last year. There were 14,857 listings active in June 2010, compared with June 2009’s 14,730 homes for sale. The average DOM for a home sold in June 2010 was 45 compared with last year’s 75 DOM, a decrease of about 41 percent.