The Commerce Department has reported that for a second straight quarter the U.S. economy grew at a stronger than expected 5.7% annual rate from October through December. Not since 2003 has the pace of growth been this fast and strong evidence proving that the worst recession since the 1930s ended last year; although the academic panel that assess recession has not officially declared an end to it.

It looks like America may be on its way to recovery and every bit of good news always helps.Maggi Davis
Associate Broker
Keller Williams Realty
Check out my website: www.maggidavis.com

Homebuyers…
The next few months are crucial for prospective homebuyers on the fence about making a decision to purchase a home. A couple of factors will way heavily on their decisions.
First, the most obvious is the upcoming expiration of huge tax incentives. April 30, 2010  will be the last day to enter into a home purchase contract and still potentially qualify for the tax credit of up to $8,000 for the first-time homebuyers and the $6,500 for repeat buyers. Second, the Federal Reserve will begin to slow down a program that has been maintaining home loan rates artificially low.
Rates…
During 2009 rates were driver down to their attractive levels because of the Fed’s Mortgage Backed Securities (MBS) purchase program. When these securities trade higher on the market, home loan rates lower. The Fed plans on continuing the program through the end of March 2010 to prevent home loan rates from spiking. They decided to extend it so they could phase the program out so when rates go back up it will not be so sudden.
The media has made this out to be good news, leading consumers to believe that rates will continue to decline and remain low. But this only gives a false sense of security to homebuyers and refinancers that they cannot afford.
The problem…
Those reports are not accurately reporting what is really going on nor where rates are actually headed. This will have an extremely costly impact on consumers who may miss out on historically low rates if they listen to these media outlets. 
What’s actually going on…
During May 2009 the Federal Reserve’s purchases of MBS had already peaked at an average of $25 Billion per week. By November, the weekly average of purchases had dropped to $14 Billion. By the end of November over 80% of the allocated funds for MBS had already been used, leaving less that 20% remaining to be used over four months.
Making matters worse is that the Fed now has less money to purchase MBS, while the supply of these securities has increased because of the refinance and purchase activity triggered by lower rates.
The Importance…
Because the Fed now has fewer funds to last during the remaining months of the program it will loose its ability to keep rates low.
Two things that will be likely to happen when the Fed’s program winds down and ends. First, there will be higher levels of volatility, meaning that rates could dramatically shift during the middle of the day. This will mean that it will be more important that ever that buyers work with a trustworthy and  knowledgeable mortgage professional who is aware of the market at all times. Second, since the MBS will have little support from the Fed, rates will rise over time.
What can you do to protect yourself?…
The most important thing to do first is work with a knowledgeable mortgage originator who know and monitors the market. Next, don’t be fooled by the media that is only reporting the headlines and not understanding the underlying implications of the Fed’s actions. Lastly, if you have not explored the current rate environment and how you might benefit from it arrange a sit down with a professional and discuss your situation. These rates are only going to be in the 5% range for a little while longer.Maggi Davis
Associate Broker
Keller Williams Realty
Check out my website: www.maggidavis.com

Fannie Mae is beginning to grow impatient with the number of REO homes that they are continuing to acquire. They are now looking to sell their inventory faster than they have been; which will now present attractive opportunities for home buyers and their agents. Fannie Mae announced that they will be changing their policy in regards to the acceptance of purchase offers. Their previous policy contained requirements that slowed down the process and kept properties out of reach of ready and willing buyers. As a result of this policy Fannie Mae’s portfolio of unsold acquired real estate continued to grow larger and larger. With their over abundance of homes Fannie Mae decided to rethink the old policy and implement a new policy that will allow them to sell their houses faster by accepting purchase offers earlier. The new policy will now allow them to accept purchase offers immediately after listing without notifying lenders or mortgage servicers whose loan files are under review. The moment that Fannie Mae lists an REO property it will be fair game for home buyers. Fannie Mae is determined to slim down their REO portfolio in 2010.

So what does this mean for you? Home buyers and their agents need to look for earlier access to REO properties and earlier decisions on purchase offers. This new policy will provide new opportunities for heads-up buyers and agents looking for deals.

Maggi Davis
Associate Broker
Keller Williams Realty
www.maggidavis.com

The Hampton Roads real estate market finished 2009 on a positive note that will hopefully make for a great 2010.  Many of the local statistics showed improvement from 2008 numbers.  Current active inventory of residential homes for sale, under contract sales and settled sales for the month of December showed positive signs as 2009 came to a close.  In addition, the month’s supply of inventory and median sales price moved closer to customary readings.
For the eleventh consecutive month residential homes for sale dropped in the region when compared to 2008, but increased on a month to month basis for five straight months.  

Under contract sales increased by 25% which completely surpassed December 2008 totals.  Six out of the seven major cities in Hampton Roads experienced increases of at least 16%.  Chesapeake was the only city that fell below that number with only a 5.6% increase.  Norfolk and Portsmouth came in with the largest increase at 44.4% and 41.7% respectively.  The number of units under contract in Virginia Beach, Chesapeake, and Suffolk all had increases over 10% and the overall region had an 8.1% gain for the year when compared to 2008!
Settled sales for the region rose by 27% in December 2009 over December 2008.  Six of the seven cities saw increases by at least 29% in the number of units sold.  Newport News saw a much smaller increase in unit sales at 4.2%, while Portsmouth sale the largest increase at 64%.
Median sales price increased in five of the major cities; Chesapeake led the way with gaining 9.7%.  Unfortunately, Portsmouth did have the most extreme median price decline of 18%.  Overall the median sales price for residential homes in the region was relatively flat, declining only 0.05%.  The stability of the year-over-year median price of homes sold is positive indicator for the local market, particularly if the level holds for a prolonged period or increases.
With all these positive indicators the local market does seem to be on its way to recovery, almost an entire quarter of the residential resale homes sold in December were distressed sales, bank owned or short sale listings. These sales make up the highest percentage of homes sold for any month since the housing decline began. Even though the region is on the road to recovery, the distress sales sector will continue to account for a large portion of all sales. The housing market is not out of the woods yet, but there is a lot to look forward to in 2010! Maggi Davis
Associate Broker, CDPE
Keller Williams Realty
Check out my website : www.maggidavis.com

Interest rates on home loans have begun to see a decline again; this is the first decline in a month.  Freddie Mac says the average rate for a 30-year fixed mortgage is now 5.09 percent, which is down from 5.14 from the previous week. Although there is a decline in rates this is not the lowest the market has seen. In early December rates had dropped to a record low of 4.71 percent. This was due to the aggressive government campaign to reduce consumers’ borrowing costs. Unfortunately there was a steady increase in rates that began at the end of December.
In attempts to make home buying more affordable and sustain the housing market the Federal Reserve is pumping $1.25 trillion into mortgage– backed securities to continue to bring mortgage rates down. Unfortunately that money is set to run out next spring.
There has been conflict about whether to expand or cut back a program that will drive down mortgage rates. A number of Fed policymakers argue that the program will need to be prolonged past its current end date of March 31, stating that there may be a need for additional stimulus if the economic recovery were to weaken. On the other hand, other members are saying that the program can just be scaled back once there is improvement in economic and financial conditions.
The key to a lasting recovery is the getting the housing market back on its feet. Some have said that the collapse of the housing market was the catalyst for one of the longest and worst recession to hit our country since the 1930s.Maggi Davis
Associate Broker
Keller Williams Realty
Check out my website : www.maggidavis.com

According to the National Association of Realtors in October there was a 10% surge in sales of existing homes which then continued into November, increasing another 7.4%. This is mostly due to the first time buyers who did not want to miss the opportunity to get in on the tax credit.
Originally the tax credit was to end in November but was extended through June 2010. In addition to being extended it was also expanded to include people who currently own a home. They will now qualify for a $6500 tax credit if they decide to buy a new home before the end of June. This is an excellent opportunity for “trade-up” buyers.
The sales total from last year has been a huge improvement; sales rose 45.7% from November 2008. It is estimated that 51% of sales in November were by newcomers to the market, first timers usually account for about 40% of sales.
Another factor that increased sales were the rock-bottom interest rates. For an average 30-year fixed-rate loan during the last month was only 4.99%, that is down from 4.95% in October and last year it was 6.09%.
Although there was concern that homes sales will decline after November, because of the original deadline for the tax credit. There is hope that sales will not fall a cliff, Walter Molony, a NAR spokesman says “the psychology seems to be turning around; potential buyers, who had been staying on the fence, now believe we’re at or near market bottom.”
It does look like there will be a large number or homes that may come onto the market over the next few months. There is what is called the “shadow inventory” -homes that are owned by banks and mortgage companies that have not yet been put up for sale. According to some research there could be as many as 1.7 million units coming into the market.
With so many units coming onto the market prices will most likely begin to fall again and may make ownership competitive with renting again. As the result of a new competitive edge there will be new buyers coming out. 
The new year will be supplied with new inventory and of course new buyers. 
Maggi Davis
Associate Broker
Keller Williams Realty
Check me out on the web www.maggidavis.com

The annual survey conducted by the National Association of Realtor for 2009 results are in!  This survey is an 8 page questionnaire sent to over 120,000 consumers who had purchased a home between July 2008 and June 2009.  Around 10,000 surveys were returned. 

As might be expected, 90% of the respondents said that they used the Internet at some point in their home search, and 76% said they did so frequently.  Seven years ago that figure was only 41% who used the Internet for their home search.

In addition to using the Internet for their home search, 87% said they used a real estate agent, 59% called off of yard signs, 46% went into open houses, and 40% used newspaper advertising. 

What is most interesting is not what information sources buyers perceived to be useful, but what source actually brought the buyer to the home that he or she purchased.

The survey showed that 36% of the buyers found the home they purchased on the Internet, and another 36% first learned of the home from a real estate agent.  In 2001 only 8% learned of their home on the Internet and 48% from a real estate agent.  In the year surveyed, 12% found their home as a result of a yard sign.  These three sources combined total 84% of the buyers, and these three sources are among the least expensive from a marketing expense standpoint. 

By contrast, some of the MOST expensive methods of marketing homes - newpaper & homes magazines - account for only 4% of the buyers who found their home from them.

Is there a moral to this story?  I’d say that as a professional Realtor who wants to maximize the visibility of my seller’s listed homes the place to be is on all of the Internet real estate portals, and to network heavily with other agents in the marketplace.  Sellers love to see their homes advertised in print media, but the fact is that this is not an effective use of a Realtor’s financial resources!

To see all of the homes on the market, visit my website at www.abuyersrealty.com!

Maggi Davis

Associate Broker

Keller Williams Realty

Virginia Beach, VA

Richmond and Virginia Beach got a big thumbs up from Good Morning America — courtesy of data from Zillow — which named them both as among the top 10 places to buy a home in the country. In fact, Virginia Beach was heralded as the number one place in America to buy. (Richmond is number seven, which ain’t bad at all, when you consider the hundreds of cities Zillow looked at.)

What’s so great about them? According to Zillow, buyers should “look for communities with a strong job market and stable housing values. Some common threads: cities with military bases, state capitals, and college towns all fare well because they are more ‘recession proof.’”

Here’s what Zillow is seeing…

In Virginia Beach:

• Median home value: $223,800, down 1 percent from a year ago.
• Property values are up 7 percent compared to five years ago.
• Houses cost an average of $139 per square foot.
• Buyers are paying 2 percent less than the listing price.

In Richmond:

• Median Home Value: $ 207,000, down 7 percent from a year ago.
• Property values are up 5 percent compared to five years ago.
• Houses cost an average of $119 per square foot.
• Buyers are paying 3 percent less than listing price.

By itself it’s not the kind of news you’d throw a party over, but at least it’s another indicator that things are — slowly but surely — turning around.

First-time home buyers and investors waded into the housing market looking for deals in May, pushing sales of existing homes higher again in South Hampton Roads, according to a report released Monday by the Real Estate Information Network, which is the local multiple listing service.

According to the report, 963 homes sold last month, up 14.5 percent from April but 3.6 percent below the number sold in May 2008. The number of homes sold last month was down by its narrowest margin in more than year, offering a glimmer of hope that the local housing market might be reaching a bottom.

The service also reported the median sale price in May was $219,900, up 2.3 percent from $215,000 in April but (only) down 2.3 percent from $225,000 a year earlier. The median is the point at which half the prices are higher and half are lower.

Home sales at the lower end of the market typically result in homeowners moving up and spurring sales in the higher price ranges, however many of the homes sold in May were already vacant, indicating that they may have been foreclosures or that the owners had already moved elsewhere.

Investors have also returned to the market, hoping to turned foreclosed or distressed properties into rentals. Homes that had been foreclosed on accounted for about 19 percent of the sales last month, according to the multiple listing service.

Virginia Beach was easily the strongest market in South Hampton Roads last month, with 430 sales in May compared with 433 sales a year earlier.

For more information about home sales in YOUR neighborhood, or homes available where you are considering a purchase, contact me, Maggi Davis, at 757-288-5547, or visit my website at www.abuyersrealty.com.

Hope you are having a great summer!

Maggi Davis
Associate Broker
Keller Williams Hilltop
Virginia Beach, VA
maggi@maggidavis.com

The Department of Defense has released guidelines for a $555M program to help military homeowners who must sell their homes for a loss after receiving transfer orders.  Under the guidelines, the DOD would reimburse the military family up to 90% of their loss from a home sale, or the DOD could also purchase the home for up to 75% of the original purchase price. 

To be eligible, the homeowner must have received orders to transfer, and have purchased their home before July 1, 2006.  To qualify , the service member must sell their home by December 31, 2009 and submit their application by March 31, 2010.

For more details on the program, visit http://hap.usace.army.mil .

For help selling or buying a home, contact Maggi Davis, Keller Williams Realty, at (757) 288-5547 or visit my website at http://www.abuyersrealty.com .