Things are changing.
I'll be the first one to say that home prices will not take an up swing for at least another year, however, the Hampton Roads real estate market is beginning to show signs of leveling off. I've been beating this drum for a few weeks now due to all of the conversations that I've had with sellers, buyers, and other colleagues. The deep discounts that buyers enjoyed for the last couple of years are coming to a close. With over 15,000 listings currently on the market, sellers are still very motivated to make something happen but from what I'm hearing, there's just not much room to budge. The reason is that most of the homes that are on the market were purchased within the last 5 years, which was in the seller's market. The homes were purchased at all time highs. Sellers are forced to reduce their prices in order to compete with the many foreclosures that are currently on the market. Think about it. Many buyers during the seller's market purchased their homes with 100% mortgage products, which means they started with no equity. With rapidly dropping prices, they could even have negative equity. I'm actually active on quite a few blogs and forums and it amuses me to hear people who have no idea what they're talking about acting like experts in the real estate industry. This is a situation where people probably need to listen to what agents are saying. The active ones, like myself, study this stuff everyday. This is what we do for a living. I think it's a time to trust but verify. If you're a buyer and waiting on the market to get another 20% better for you, you are too late in my opinion. This thought was confirmed today while at an appraisal. I had to meet the appraiser out at a house that I have under contract and he told me, with no prompting, that in his opinion, prices have bottomed out. If you are a potential buyer, give me a ring or send me an email and let's talk. You are in a prime position that we will not see for many years. I work hard to provide a comprehensive site and marketing information in order to educate and assist clients on a daily basis. I do welcome your comments no matter if they're positive or negative so feel free to leave me what you think.
Jeff Nelson
The Real Estate Group
Homes and Food, Inc.
Hampton Roads Real Estate
757-749-1616
mail to:jeff@homesandfood.com
Jeff Nelson
The Real Estate Group
Homes and Food, Inc.
Hampton Roads Real Estate
757-749-1616
mail to:jeff@homesandfood.com
WOW, On ABC (Channel 13) News tonight they reported 45% of the recent homes sold were sold for less than the amount left on their Mortgages!!! YIKES!!!
How can a buyer take advantage of this scenereo? How much below the asking price (Percent) would you recommend bidding if a buyer finds something they like? Thanks! I like your site...pretty cool!
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Yes, you're right. Our area does have a tremendous amount of foreclosures and short sales on the market, which accounts for that 45% you heard about on the news. Depending on what price range a buyer is looking in, those listings can dominate their search. The only downside to buying a foreclosure is that a buyer may have to wait a little longer to get responses back from the bank on their offer. This could go either way though. I've had some respond back quickly and others take weeks, hoping to get another competing offer in. Even though there are bank-owned listings above $400k, most of them are in the lower price ranges. No big deal though. Okay, back to your original question. We are actually beginning to see a leveling off of prices, so I believe the days of the deep discounts are over. However, prices should still come down a little more over the next year, which is why I recommend starting your offer at 10% below what the seller wants. Today, sellers in general are not giving up this much but I feel that it's a good starting point. Most of the time you should realize a savings of about 4%-6% in our current market. The reason is that homes sold by normal sellers are having to compete with the foreclosures. The traditional sellers would either have to have a ton of equity or be willing to dip into their savings account in order to sell their home. On the flipside to that, the "bank" sellers are losing more and more money since home prices have come down about 25%, so everything is getting tighter. Anyway, Jan, I appreciate your comment and please let me know if I can assist you. I will do everything in my power to help you save as much money as humanly possible.
Jeff Nelson
The Real Estate Group
757-749-1616
Our main real estate website
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I am interested in how you come to your conclusion regarding "I believe the days of the deep discounts are over"
The reason I ask is...I talked to a loan officer today at Navy Federal...she told me Hampton Roads is classified as a "Declining Market" so they will be very cautious as to how much they will lend, etc.
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Hi Jill, I appreciate your comment. How I come to the conclusion is that I work in the real estate business everyday and I wouldn't have posted a message like that 6 months ago. I am starting to see sellers getting tighter and tighter on what they're willing to give up these days. As I work with buyers, I normally recommend starting at around 10% off the asking price. 6 months ago it wasn't unusual to see sellers accepting those offers. Now it is. Also, I've been talking with other pros in the area to include appraisers, and they're telling me the same thing. Everyone who works in this business are seeing prices starting to level out in general. There will always be special cases in every market but for the most part, sellers are paying your closing costs and maybe give you something off the sales price as well.
Another way I can tell is when I search for comparable sold properties in neighborhoods. When I'm working up a CMA for a seller, I search their neighborhood to find other like homes that have recently sold. Over the last few months, the difference between the asking price and actual sales price and extremely close to one another. Our Hampton Roads real estate market needed a correction as with the rest of the country and prices have reduced around 25%-30%. Buyers are beginning to see what's happening and jumpin on board.
As far as what you were told at Navy Federal, I disagree totally. This isn't the first time that I've heard that Navy Federal has said that Hampton Roads was in a declining market. I spoke with the people I work with at Suntrust and they said that we were in a declining market for about 24 days last summer but we're not now. Navy Fed is a lot tighter on lending money than many other banks now and that's probably why they told you that. Hampton Roads has around 2,000 real estate closings every month and things are still chugging along. I urge you to get another opinion from a different lender. Please let me know if you would like a recommendation. Also, ofcourse, I'd be happy to assist you with the whole process. Again, thanks for taking the time to answer my post.
Jeff Nelson
The Real Estate Group
757-749-1616
jeff@homesandfood.com
www.homesandfood.com
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Hi Jeff,
Are you a Chef when not selling Real Estate? I was curious because of the name of your web site. Your painting tips seemed as if you had some expierence there too.
As for real estate, Is Norfolk turned into Portsmouth or is there any hope all the gangs, crime, and generalized ghetto condition will ever disapear? Could this be the next "White Flight" area like Detroit and others expierenced in the 90's? It used to be a great city,
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Hi Jill,
No, technically I'm not a chef but I am the cook of the house and will probably one day open a restaurant. Long story short...I love food and love to cook...
First of all, I'm not going to comment concerning "white flight". Every buyer needs to make their own decisions concerning where they live using all of their own specifications. I will tell you that I love Norfolk, especially the downtown area, and if fact my wife and I have considered owning a small condo there as a second home. I urge each buyer to do their own due diligence in researching school sites, police sites, etc...I will assist in any way that I can concerning the actual home but the neighborhood is on you. Good to hear from you. If I'm thinking correctly, you've been using the site and our blog for some time. Please let me know if there's anything I can do for you concerning your next home purchase. As a buyer, you are in the best position possible at this time. Hope to speak with you soon . Jeff
Jeff Nelson
The Real Estate Group
757-749-1616
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