"Best State for Business"

For the 3rd year in a row Virginia has been named the "best state for business" by Forbes Magazine.  North Carolina was not far behind in fourth.  The commonwealth was ranked 1st in terms of regulatory environment, 6th for both economic climate and quality of life, and 7th for labor.

Click the link below to view the full article in Forbes...

http://www.forbes.com/2006/08/15/virginia-business-climate_cz_kb_0815virginia.html

H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23, 2008, by a vote of 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions:

• GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

• FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

• Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).

• FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.

• Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.

• VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.

• Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.

• GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.

• Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.

• National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.

• CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.

• LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.

• Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.

For more information, visit http://www.realtor.org/governmentaffairs.

On Wednesday, July 30, President Bush will sign the recently-passed housing legislation (H.R. 3221) into law.  The new first-time homebuyer tax credit will go into effect immediately upon the President's signature.

The chart presented below outlines the basic features of the new credit.


http://www.realtor.org/GAPublic.nsf/files/chart_homebuyer_tax_credit_.pdf/$FILE/chart_homebuyer_tax_credit_.pdf

Priced at $995,000.

This stately, English Tudor style home is situated in a secluded neighborhood on the James River.  Relax by the salt water pool while enjoying the views of the river.  This home has been well maintained w/ many extras.  Property can also be sold completely furnished if desired.  You can visit this property at www.hrmls.com/0833386.


Jeff Nelson
757-749-1616
jeff@homesandfood.com

This is your chance to own a classy downtown loft, just steps from the MacArthur Mall and Norfolk's fantastic restaurants & entertainment at an affordable price of just $265,000.  Features include a private balcony over-looking the city, stainless steel appliances, upscale contemporary lighting and elevator.  Please visit www.hrmls.com/0832253 for more details and pictures.


Jeff Nelson
757-749-1616
jeff@homesandfood.com

Still A Buyer's Market

by Lawrence Yun, NAR Chief Economist

Modest near-term movement is expected in existing-home sales, with a recovery in sales seen during the second half of the year. The Pending Home Sales Index, NAR’s forward-looking indicator based on contracts signed in May, fell 4.7 percent to 84.7 from an upwardly revised reading of 88.9 in April, and remains 14.0 percent below May 2007 when it stood at 98.5. Some pullback after a sharp increase in the previous month was expected. The overall decline in contract signings suggests we are not out of the woods by any means. The housing stimulus bill that is still being considered in the Congress is critical to assure a healthy recovery in the housing market, jobs and the economy.

But location has never mattered more than in the current market. Look at the pending home sales index for the West. While it’s true the index slipped 1.3 percent to 97.5 in May in that region, it was 2.0 percent higher than it was in May of 2007. Indeed, some markets have seen a doubling in home sales from a year ago, while others are seeing contract signings cut in half. For instance, double-digit pending sales gains in May from a year ago were noted in Colorado Springs CO, Sacramento CA and Spartanburg SC. In addition, price conditions vary tremendously, even within a locality, depending upon a neighborhood’s exposure to subprime loans.

Current real estate market conditions are positive for most buyers: still-attractive interest rates, a large inventory of homes available for sale, and many sellers willing to negotiate their prices – sometimes significantly. And in spite of the headlines surrounding issues with Fannie Mae and Freddie Mac – as well as the recent federal “takeover” of IndyMac – there is still mortgage capital out there. Credit may be tightened, but lenders are still happy to originate a mortgage loan to households who qualify. And remember: owning a home still provides long-term value – and most buyers today plan to remain in their homes for five or more years. Home buyers can get a great deal right now.

Concerns Remain

Yes, there are some concerns on the horizon. Although inflationary expectations appear to be under control for the time being, sharper consumer price gains could lead to notably higher mortgage interest rates in 2009. Based on current indicators, the 30-year fixed-rate mortgage is forecast to rise gradually to 6.5 percent by the end of this year, and then hold at that level for most of 2009. But note – that is still well below the “threshold” level of 7 percent. In spite of a month to month decrease from April to May, housing affordability – as measured by NAR’s housing affordability index -- is improving this year and is likely to rise 15 percentage points to 127.0 for all of 2008.

Existing-home sales are expected to grow from an annual pace of 5.01 million in the second quarter to 5.75 million in the fourth quarter. For all of 2008, existing-home sales should total 5.31 million, and then increase 5.0 percent next year to 5.58 million. That is less than 100,000 unit sales off the annual pace last year.

The speed at which home prices have declined in a few select markets is unprecedented, but the large price declines in those areas have enticed bargain hunters back into the market. Interestingly, there have been reports of multiple bidding after the large price cuts, so it is possible that most of the price declines have already occurred in those markets. The aggregate median existing-home price (on a national basis) is projected to fall 6.2 percent this year to $205,300, and then rise by 4.3 percent in 2009 to $214,100.

New-home sales are a different story. They are likely to fall 32.3 percent to 525,000 in 2008 and decline another 3.4 percent next year to 507,000. In light of high inventory conditions, rising commodity prices and construction costs will curtail new home construction deep into next year. Housing starts, including multifamily units, will probably fall 28.7 percent to 966,000 this year, and then drop another 9.0 percent in 2009 to 879,000. The precipitous drop in starts is due in part to some overbuilding during the “boom” years, as well as the rising costs of construction. The median new-home price is expected to decline 3.2 percent to $239,300 this year, and then rise 5.3 percent in 2009 to $251,900.

Officially, the U.S. economy has still not drifted into recession. In fact, GDP growth in the first quarter of this year was revised upward from preliminary estimates – albeit at a slow 1.0 percent rate. Growth in GDP is forecast at 1.6 percent for all of 2008 and 1.4 percent next year – not spectacular, but still positive. Inflation, as measured by the Consumer Price Index, is forecast at 3.7 percent this year and 2.4 percent in 2009. Unfortunately, personal income gains are unlikely to keep pace with rising prices. Inflation-adjusted disposable personal income is projected to grow 1.5 percent in both 2008 and 2009.

Conclusion

So, what does all this mean for housing consumers? It will continue to be a buyer’s market for a while. Obviously, we will need to watch developments with credit markets and the GSEs, but if a potential buyer can qualify for a mortgage, there is plenty of choice out there.

Have you been looking for a great home with an in-ground pool?

Priced at $409,900, this beautiful property is situated in desirable Bentley Gate and is sure to please.  Features include a large deck and large pool for entertaining, park-like backyard with inground sprinkler system, 4 bedrooms/2.5 baths, and over 2600 square feet.  You can either go to the "Featured Homes" section of www.homesandfood.com or www.hrmls.com/0826660 to get all the details and pictures....

Jeff Nelson
757-749-1616
jeff@homesandfood.com
www.homesandfood.com

Well it's no big surprise that we live in a coastal area with many homes either on the ocean, bay or lake.  I work with lots of buyers and find myself in probably 25-30 homes a week.  This week I showed a very nice home in Va. Beach that was a little over 4000 square feet and priced at $589k.  Not only did the home show extremely well, it was situated in a cul de sac over-looking a very large lake.  I could actually see a great shot of the water when I entered the front door.  If you're in the market for a home like this, give me a ring or an email.  I'd love to work with you. 

Jeff Nelson
757-749-1616
jeff@homesandfood.com

While other markets are seeing things slow down we are not!  Even with the liquidity and credit crisis there is still money available to buy a new or starter home.  One of the biggest misconceptions right now is that there are no more 1^st time homebuyer products.  That is simply not true!  Yes, back in years past there were more things to choose from such as 100% financing and the 80/20 loan with no mortgage insurance and unfortunately they are gone but, there are other ways to finance a home. We have just forgotten about them.  In Hampton Roads we are lucky, as value is holding up, but sellers are more willing to chip in and help pay for closing costs in an effort to make their home more attractive to the buyer.  This brings me to the FHA loan.  What a great product that we forgot about and frankly we didn’t need to use it with all that Fannie Mae was offering.  But now it is back and bigger than ever.  It allows so much flexibility, with 97% financing and 6% allowable seller concessions, and you are able to get a gift of the 3% down payment from a relative.  You can still get 100% this way!  Most people are prepared to pay for their closing costs when purchasing a new home which is usually in the neighborhood of 3 to 4% but if you think about the seller picking up that for you, we are just shifting the money to the down payment.  Before when the 100% products were out there no seller was picking up the closing costs so that was an expense that was going to be incurred anyway. Well now they are and the money is now being called down payment but is really the same 100% just coming from different parties.  Another way to skin this cat is to borrower the money from a relative or get them to gift it to you and then you are getting the best of all worlds no money out of your pocket!  Awesome!!!  FHA is also more lenient on credit than a conventional loan, so for those just starting out this is really a great product. 

Now let’s talk about rates.  Yes, rates are higher than they have been over the last couple of years, but look they are still lower than they have been if you compare the last 20 or even 40 years.  Another bonus in buying a new home!   Let’s face it, Hampton Roads is a great market and does not have the things going on in the rest of the country that the media reports.  We are more stable and with rates and money available what a great time to buy a house.

Should you have questions or want to inquire about how to get a pre-approval feel free to contact me otherwise check back as I will continue to update every other week with something new and exciting going on in our market.

Happy Hunting,

Alex

 

While Hampton Roads has its share of condos and townhomes, our area is mostly comprised of single family detached homes.  Although some buyers like the idea of tight knit communities, there are plenty who don't mind walking a little further to borrow that cup of sugar.  With this in mind, single family homes usually are more expensive and buyers are often forced to purchase a home with an assigned parking spot.  My travels lately have taken me in a lot of neighborhoods with great ranches at good prices.  So I've decided to give hope to those who want to keep their payments at around $1500/month or less and not listen to every argument from the couple on the other side of the firewall.  My figures today are coming from, what we call, the Southside.  These cities include Virginia Beach, Chesapeake, Norfolk, Portsmouth, and Suffolk.  You may be surprised to find out that currently there are 632 single family detached homes with at least 3 bedrooms between $175k - $200k that for sale right now.  Many of these properties are in great shape and have been flipped or remodeled.  You will also find that many are in charming, well-maintained neighborhoods.  If you're a renter, first-time buyer, or someone just needing a change and want to keep your payments fairly low, don't despair.  There is plenty of inventory and more coming on the market daily.  You can call or email me for a detailed report of your choice. 

Jeff Nelson
757-749-1616
jeff@homesandfood.com