The Ultimate Real Estate Guide 2008

People are still buying and selling houses. Somewhere in all the doom and gloom about the real-estate market, those two simple facts seem to have been lost. Yes, the market isn’t what it once was (though it’s probably not as bad as you think, at least in Richmond), but that may be good news if you’re looking to buy. For this year’s real- estate guide, we talked to experts to get a read on the Richmond market, uncovered tips for selling your home, tracked down a seller’s first-person account of what it takes to get a contract in this environment, and scouted out 25 neighborhoods that deliver on a few of the varied reasons we become homeowners that have nothing at all to do with investment potential. Maybe we can all stop talking about flipping houses and get back to buying homes. —The Editors

Real Estate Reality Check
Yes, the market's down, but it's not nearly as bad as you might think, and if you're a buyer, it's all good...

By Bill Farrar

And now some advice for Richmond-area home buyers and sellers alike: 
Relax.

While certain indicators do reveal a slowdown, the housing market here isn't nearly as dire as the talking heads on the national news might lead you to believe, Richmond real-estate experts say.

"Don't be concerned with what you are hearing on the news.  This is a very good, stable market here in Richmond," says Michael Maloney, managing broker for the Richmond West branch of Keller Williams Realty.  "It's not the best we've seen, but very solid."

In fact, Maloney and other real estate professionals say both buyers and sellers are on solid ground as long as they know what they're getting into.

BUYER'S MARKET
With more homes for sale than this time last year, most houses are taking longer to move and are putting buyers in a stronger position to negotiate.

"As a buyer, you have a huge inventory to choose from, and as a result you can ask for and receive seller consessions," says Chris Lester, a loan officer who works with First Horizon Home Loans in Richmond.

The number of houses on the market in the Central Virginia Multiple Listing Service area — which includes the cities of Colonial Heights, Hopewell, Petersburg and Richmond, as well as the counties of Amelia, Caroline, Charles City, Chesterfield, Dinwiddie, Goochland, Henrico, Hanover, King William, King and Queen, Louisa, New Kent, Nottoway, Powhatan, and Prince George — rose by 13 percent from 14,226 in March
2007 to 16,104 in March 2008.

Consequently, the average number of days it took a house to sell increased 23 percent from 56 to 69 during the same months, according to MLS statistics.

"It's a buyer's market because there is so much inventory out there," 
Maloney says.  "This is a very good time to buy."

The glut of available homes means more selection and greater leverage for the buyer, as well as only modest spikes in pricing in contrast to the drastic increases that have occurred in other major markets across the state, including Northern Virginia and Tidewater.

"Richmond and the surrounding county areas have not followed the national trend," says Dan Shreve, regional executive vice president and a licensed appraiser with Perry and Associates Inc.  "Richmond has been resilient and ... keeping a steady price" for home sales, he says.

The average sales price of homes in the Central Virginia MLS rose just 3 percent from $251,771 in March 2007 to $261,157 in March 2008, MLS data shows.

"Values appear to be stagnant in Richmond, with small pockets of declining value," Lester says.

SELLER'S REALITY
On the seller's side, extra steps may be necessary to make a deal happen, but the outlook it still positive, experts say.

First, sellers must recognize that the amount of competition among available homes means buyers have the luxury to pick and choose.  How quickly a house sells and what price it yields often are dependent upon its condition and the amenities it offers.  Taking an honest assessment of a house's positive and negative attributes — and being willing to put some effort into correcting any deficiencies — can make the difference between selling and waiting.

"Two to three years ago, it wasn't that difficult to sell a house," 
says Maloney, noting that competitive bidding that netted sales far above asking price within days of a home being on the market was not unusual at the time.

Now, on the other hand, "you need to distinguish you house however you can from the rest of the inventory and ... make a huge effort to make your house competitive in a sea of listings," he says.

But even more critical to getting good offers as a seller is being realistic about a property's value.

"Sellers must be willing to price their homes to sell and not based on emotion," Lester says.

STRICTER MORTGAGES
Central Virginia also appears to be bucking the national trend regarding the mortgage crisis and high rate of foreclosures.

The Richmond metro area ranked 95th out of the 100 largest metropolitan areas in the country in the percentage of households that faced foreclosure in 2007, according to Irving, Calif.-based RealtyTrac, which monitors such statistics.

Just 0.2 percent of Richmond-area homes — 908 of them — fell into some stage of foreclosure last year.  The Detroit are had the highest percentage of foreclosure filings, with 4.9 percent of homes facing default on their loans.

"Richmond ranks almost dead last in foreclosures" among major metro areas, Lester says.

But prospective buyers here will notice the impact of the mortgage slump when they go to take out a new loan.  The high occurrence of defaults nationally has caused lenders to impose stricter credit requirements and tighten up the previous wide range of mortgage options including being able to buy a home with no down payment.

"One hundred percent financing has disappeared in almost all respects due to mortgage insurance companies being unwilling to underwrite such loans due to the massive losses they have incurred," says Lester.

COOL HEADS PREVAIL
Many people actually find themselves on both sides of the real-estate equation when upgrading from their existing house.

Terri Burks of Midlothian recently traded up to a home with about 1,000 more square feet in a neighborhood within her existing school district.  She and her husband were in a bit of a hurry as they needed to sell their previous home to buy the new one, but it took only about 30 days — less time than the current average — before she had an offer that resulted in closure.

An office employee with Ryan Homes, Burks understands the process better than most.  She recommends hiring professionals — real-estate agent, appraiser and mortgage officer — based on solid references and then trusting their advice rather than relying on market information from the daily news.

"The media pounds it into your head" that the market is in the 
toilet, she says.  "I personally was not real intimidated by it.  
Just find somebody who is going to work to sell you home and not just put a sign in your yard, and be ready to show at a moment's notice."

Maloney agrees that cool heads are the ones who will prevail whether buying or selling.  "My biggest piece of advice is don't react out of fear."

Click here to download the article printed in June's Richmond Magazine.