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December 7, 2010
NVAR International Year-End
Celebration
What’s happening in our market?• Northern Virginia market:
– In some ways we are like the rest of the country
– In others ways we are very different– And in many ways, we have one of the best
markets in the nation!
Have we hit the bottom?-Indicators say “yes” and “no”!
-Recovery is slow and painful
-First time buyers and cash investors drove first half of 2010 recovery
-Prices up, inventory weak but we see fewer short sales (thank goodness)
Today’s Real Estate Market
• 30-year mortgage rate is at generational lows, under 5%
• National median-home price is stabilizing, $170,000
• Inventory is still very high• Foreclosures more of a problem than
short sales
Source: NAR
The U.S. market today• The economy is growing….slowly
• The private sector is finally creating some jobs, corporate profits are up
• Consumer confidence remains low, though clearly off bottom
Source: NAR
Local Signs of RecoveryHome prices stabilizing with small increases
Investors still purchasing inventory with cash
Job losses and unemployment show improvement in our region
Economy will continue to slowly expand in 2011
Source: Gerald L. Gordon ,PH.DPresident and CEO, Fairfax County Economic Development Authority
Recent Major Economic Development Activity in Fairfax County
• Northrop Grumman selects Fairfax County for new corporate headquarters, joining
• CSC• Hilton Worldwide• Science Applications International Corporation• Volkswagen of America• More on the way!
Northern Virginia Market • Population is growing• New jobs are being created• Unemployment around 5% and (would
be lower if population were not growing)• Prices up, inventory steady• Foreclosure/Short Sales market
shrinking
Unemployment rate is only 4.5%
Our schools provide a quality workforce
Our area has the highest median family income in the U.S.
Major companies relocated here, VW, Hilton, CSC, SAIC………
Listed as one of the safest communities in America
Source: Jerry Gordon, President and CEO of the Fairfax EDA
Benefits of Living in Fairfax County
NVAR home prices starting to rise
NVAR statistics on pricesRecord high $569,826 June, 2007Record low $376,669 Jan., 2009
2010 first half average sales price - $472,762
October average sales price- $ 470,882• Over 7% increase over last year
NAR: Record number of first-time homebuyers(Survey finds most buyers applied for tax credits)
• First-time homebuyers accounted for half of all home sales from July 2009 through June 2010 based on 8,449 responses to a survey sent nationwide. This is the highest share of first-time-buyer purchases in the history of the survey, which dates back to 1981.
Tax Credit was Huge Success1 million additional buyers1 million fewer inventory unitsReduced months supply by 2 to 2.5 monthsPreserved Housing Wealth by nearly $1 trillionLimited future foreclosures
Long Standing Housing Policy• Mortgage Interest Deduction
– If eliminated, estimated about a 15% loss in home values
• FHA– Self-financing without ever needing taxpayer
funds, but threatened• Fannie and Freddie
– Made big mistakes and need to be restructured
?
Home Ownership Matters Campaign
• Aggressive media & consumer outreach
• Research, white papers
• Coalition building
Support NAR's Call For Action by calling your Representatives to ask their help in defending home ownership and the Mortgage Interest Deduction.
They need to hear from YOU today.
realtoractioncenter.com/realtor-party/click-to-call-midFor more info, please visit
• Suggested Talking Points
I am a constituent and a REALTOR®.
I have been on the front lines of the housing crisis.
I can assure you that even talk of changing MID harms an already fragile market.
I am strongly opposed to the Deficit Commission's proposal to limit or eliminate the Mortgage Interest Deduction.
News reports saying that Congress threatens to repeal or limit MID will keep potential buyers on the sidelines and further delay the housing recovery.
Suggested Talking Points
• Please oppose any efforts to reduce or eliminate the Mortgage Interest Deduction in any future deficit reduction proposals or legislation.
• Thank you for helping to ensure the ongoing recovery of the housing market.
• As a member of the National Association of REALTORS®, I appreciate your belief that home ownership matters.
• If you call outside of office hours, please leave a voice mail communicating the message above.
Public Awareness Campaign: What Matters Most ?
• “What Matters Most ?” reminds homeowners, buyers and sellers alike that homeownership remains the foundation of the American Dream. The advertising materials underscore the value that REALTORS® bring to communities and their clients, and explain that REALTORS® are prepared—to show you options, answer your questions and guide you home.
NAR Real TV ad let’s watch
Why Buy?• Get a good deal now
• Low mortgages
• Save on taxes
• It’s yours!
• A better home
• Forced savings
• A lot to choose from
• Sooner or later -- the market will clear
Homeownership Rate for Selected Years (1900 – 2010)
First-time Buyers
MedianHousehold
Income$59,900
MedianAge30
Median Square Feet
1540
Home Owners' Net Worth Is More Than 40 Times That of
Renters
Housing Wealth Gains
Economists Expect Price Increases in Upcoming Years
Northern Virginia Region already beyond these national estimates
0
2
4
6
8
10
12
14
16
San Diego Orange Cty Boston Houston Buffalo Washington Columbia
% change from one year ago
Source: Lawrence Yun, Ph.D.,Chief Economist and Senior Vice-President of NAR
Sample Markets with Price Increases
Home SalesDipping in 3rd quarter of 2010, then rising
Pending Contracts on Existing Homes
708090
100110120130
2001
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01
-Jul
2001
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02
-May
2002
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03
-Mar
2003
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04
-Jan
2004
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04
-Nov
2005
-A
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05
-Sep
2006
-F
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06
-Jul
2006
-D
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07
-May
2007
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08
-Mar
2008
-A
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09
-Jan
2009
-J
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09
-Nov
2010
-A
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Tax Credit Impact
Existing Home Sales
Source: NAR
Housing StartsGradually rising
New Homes Construction
VS
500,000new starts
in 2010
2.1 millionIn 2006
Future Housing Shortage?Year Housing Starts Historical Normal Cumulative
Surplus/Deficit
2003 1.85 million 1.6 million + 0.25 million
2004 1.95 million 1.6 million + 0.60 million
2005 2.07 million 1.6 million + 1.07 million
2006 1.81 million 1.6 million + 1.28 million
2007 1.34 million 1.6 million +1.02 million
2008 0.90 million 1.6 million + 0.32 million
2009 0.55 million 1.6 million - 0.73 million
2010 forecast 0.68 million 1.6 million -1.65 million
2011 forecast 0.95 million 1.6 million - 2.30 million
Source: Lawrence Yun, Ph.D.,Chief Economist and Senior Vice-President of NAR
Dr. Yun’s predictions
• “Over the next 12 months, I will be watching Lexington, KY and Washington, DC to outperform the rest of the country”!
• May, 2010
County Active New Pending Sold AverageSale
MedianSale
Alexandria City 907 242 179 120 $462,796 $435,500
Arlington County
938 310 183 172 $558,039 $506,250
Fairfax City 121 41 26 19 $381,000 $375,000
Fairfax County 5220 1499 1199 911 $456,433 378,000
Falls Church City
59 22 14 7 $592,257 $488,400
NVAR Counties- October, 2010 Stats
Supply and Demand (NVAR)
2010 Sold Listings October
1,9011,498
1,1231,457 1,604
2,646
1,229
0
500
1,000
1,500
2,000
2,500
3,000
2004 2005 2006 2007 2008 2009 2010
1,2321,604 1,6011,542
1,990
0
500
1,000
1,500
2,000
2,500
2006 2007 2008 2009 2010
2010 Under Contracts October
2010 Ave. Sales Price (NVAR) October
$520,829
$427,502 $424,510
$524,236$470,882
0
100,000
200,000
300,000
400,000
500,000
600,000
2006 2007 2008 2009 2010
Record High- $578,689 (June 2006)Record Low- $376,669 (January 2009)
Economic GrowthSlow growth, but still
positive
NAR Challenges in the Coming Years
• Ensure flow of capital into the Real Estate market
• Creating access to affordable property insurance
• Preserving the value of homeownership• Improving professionalism of REALTORS®• Fighting the attack on Home Ownership• MID……are you ready for the fight?
Take advantage of this new member benefit for all 2011 members by learning how to make use of these form fillable documents. Please visit
nvar.com/nvar-news/free-instanetforms-for-members
The IdentitySecure® Program for REALTORS® is the newest offering from NAR's REALTOR Benefits® Program and is among the most comprehensive fraud security solutions available today
Find out about all the protection benefits of IdentitySecure®. Your first month is just $1.
Visit the IdentitySecure website for more information and to sign up.
www.identitysecure.com/NAR
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Happy Holidays