BACKGROUND. Fully understanding today's market starts with taking a look at where we have been. For the purpose of simplicity and statistics, lets discuss the Williamsburg market although it is typical of what we have seen in all of the Hampton Roads markets. Southern York County has been a little more resilliant while newer homes in more rural communities such as Gloucester and Suffolk have seen greater adjustments. Prior to 2002, the real estate market in this area was defined as a “balanced”; that is, there were nearly equal numbers of both buyers and sellers in the marketplace, and neither group was seen to have a particularly strong competitive advantage in a real estate transaction. In 2002, however, the Williamsburg market, like many other areas of the country, saw tremendous price appreciation and housing demand. In 2002, the average home price in Williamsburg sold for $219,358, according to the Virginia Association of Realtors. By the end of 2005, that average price had risen to $375,273—a jump of over 71%! Much of this price increase had to do with investor speculation that was also prolific in other areas of the country. Some of the increase was also due to the growth of Williamsburg as a residential community. The population of the greater Williamsburg area has continued to grow in the past few decades, pushing up land and construction costs. The past 3-4 years, since the end of the national “real estate boom”, have seen prices in the area stabilize and adjust, and the marketplace has shifted from a “sellers’ market” to “buyers’ market”. The average home price in Williamsburg at the end of 2007 was $341,457, a 4.97% decrease over the year before. However, before speculating that this average decrease is solely due to deflating home values, recognize that the segment of the Williamsburg real estate market hit hardest in the past few years has been the luxury/upscale segment of homes priced higher than $500,000. This is due in part to fewer retired purchasers moving from the northeast, after selling primary residences in those markets. For instance, in 2007, according to statistics compiled from the Williamsburg Multiple Listing Service, a total 1521 homes were sold in the Williamsburg area. Of that number, fully 70% sold for less than $400,000, and 43% sold for less than $300,000. THE BOTTOM LINE. For those looking to sell a home in 2010, your chances of selling the home in a reasonable time, and for a reasonable price are significantly greater if the home is priced in the middle income range of Williamsburg—under $350,000. But, be prepared for some negotiation of price and closing costs with buyers, who have plenty of inventory to choose from. Luxury home sellers should also be aware that market time has increased substantially for homes in the upper price ranges in Williamsburg. Neighborhoods such as Ford’s Colony have significantly higher inventory than in years past, and require more aggressive pricing and marking than was previously required. Additionally, the number of foreclosures and corporately owned properties has risen making the market fiercly competitive. Appraisals are increasingly limiting and underwriting guidelines are more stringent, and there are fewer mortgage programs from which buyers can choose. This has encouraged sellers who have to move to become landlords. The pool of renters is stronger than ever as many potential buyers have chosen to become renters. These savvy renters have great credit, stable income and great referencese, but are just uncertain of investing in what they perceive is a volatile market. Short or Pre-foreclosure sales continue to compete with the traditional seller limiting the offers that are being made on great listings. OUTLOOK. For the first time in several years it is cheaper to BUY than to rent!!! This is great news for home sellers! The economy seems to be improving and rates are still at record lows. The $8,000 tax credit has encouraged first time buyers and the expansion of the program to current homeowners has helped the move-up purchasers make the move worthwhile. Many buyers have held off on making the committment over the last few years. These buyers are still out there and WILL make the decision to enter the market when they feel it has sufficiently stabilized. It is our prediction that this will happen in the next couple of years and when it does we will have healthy apprectiation again. For further discussion of the current state of the real estate market, and to learn how Help-U-Sell can provide you with the pricing and marketing tools to succeed in this market, please contact one of our licensed Realtors® at (757) 221-0060. There is no cost or obligation associated with having a private consultation with us to see where you might fit in today's market. We can help you wherever you may be or want to go! |