Loudoun County Real Estate Statistics and News

Thursday Poll - The Solar Home

There is no end to the number of articles, books and movies regarding the earths resources and how we are using up more than can be replenished.  From Al Gore's "Inconvenient Truth" to Leonardo DiCaprio's "The 11th Hour", the issue of Global Warming is probably the single biggest concern for humans.  We as Americans represent 5% of the world's population yet we consume 33% of the paper, 25% of the oil, 23% of the coal, 27% of the aluminum and 19% of the copper.

We read these statistics and they do not surprise us.  But what can we do to not only reduce our consumption of these resources, but perhaps even save money doing it?

This is the question that leads us to today's poll:

If you are interested in solar energy for your home, here is a great place to start - SolarHome.org

Thursday Poll - Will Life Be Better Next Year?

Last week's poll asked the question "Is life better this year versus last year?".  The results were very balanced.   You can see the results by going to last week's poll and clicking View Results.

This week's question piggyback's on last week's by asking the question:

Repeal the Grantors Tax

The Northern Virginia Transportation Authority was recently given the authority by the state to impose new taxes for transportation costs in Northern Virginia.  One of the most unbelievable tax increases proposed and authorized (but not yet in effect) is the Grantors Tax. 

This is a fee that every home seller pays at settlement to the State of Virginia.  Currently the tax is $1 per $1000 of the sales price of a house.  For instance, if you sell your house for $450,000 you pay the state of Virginia $450. 

The authorized increase will change the tax from $1 per $1000 to $5 per $1000, an increase of 5 times the current rate.  So now the $450 Grantors Tax will become $2250. 

Why this tax is so completely ridiculous is two-fold.  First of all, it fines the people who are leaving the area and actually lessening the amount of traffic in the area.  That is backwards.

Second, it makes people who currently live here and are considering moving up, think twice about doing so.  This actually hurts the local economy.   The move up buyer was a vital group of buyers during the bull market run of a couple years ago.

I have an idea that might do the same thing as this ridiculous tax.  How about hiring less workers to stand around on the side of the road at every highway construction zone?  Every time I drive by at least half, if not all of these workers are standing around doing absolutely nothing. 

Here is a petition to sign asking that this tax be repealed if you are opposed to the increase in the Grantors Tax.

Good News for Interest Rates

The Federal Reserve cuts the Discount Rate from 6.25% to 5.75%.  This is different than the Fed Funds Rate but it shows something very important for borrowers.  With this cut in the rate, the Federal Reserve has sent a message that they feel interest rates have been high enough for long enough and that a drop is necessary.  This is completely different than their stance just 2 months ago when they said that they didn't anticipate dropping rates in the foreseeable future. 

A drop of .25 basis points in the Fed Funds Rate is now anticipated in September and another .25 basis points in October.

The trend is now downward and this should result in a drop in mortgage rates for the remainder of the year.  Finally some good news for borrowers.

Thursday Poll - Is Life Better Than It Was A Year Ago?

Watching CNBC this morning, there were a lot of talking heads saying that the stock market was in turmoil, but that the economy was doing fine and that the only thing to worry about was the credit crunch for lenders such as Countrywide.  The Federal Reserve has used the strength of the economy as a reason for not lowering interest rates. 

I am thinking that there is a disconnect between what they think is happening to the actual people of America and what their numbers tell them.  As a real estate agent, I know that I am not doing as well this year as I was last year and that is the case with most of my fellow agents.  I also don't see the future looking too bright.  But maybe I'm wrong.

This weeks poll asks the question:

Thursday Poll - Guess the Interest Rate

On Tuesday the Federal Reserve held interest rates steady at 5.25%.  Actually, the only rate the Fed held steady was the Fed Funds Rate, the rate that banks charge each other to borrow money on a very short term, usually overnight.  The direct effect on the general public is virtually nothing, but the indirect effect is tremendous. 

All interest rates in the U.S. are affected by the Fed Funds Rate including mortgage rates.  More important than the actual rate is the direction of the rate.  The current rate has remained unchanged since August of 2006.  And the Fed has made no indication of lowering it or raising it in the near future.

Unlike the Fed Funds Rate that moves very infrequently, the rates on mortgages move daily.  This is because mortgage rates are directly affected by market conditions and market forces.   Therefore, in the course of a year when the Fed Funds Rate hasn't moved, mortgage rates have varied significantly.

Other factors that affect mortgage rates including the type of loan you get.  The longer the fixed length of maturity, the greater the fluctuation in rate.  A 5/1 ARM will typically vary less from day to day than the interest rate for a 30 year fixed mortgage.  Location of the loan is also a factor.  If the foreclosure rate of a location is increasing or unemployment is increasing you can expect rates to move faster in that location than an area with less risk. 

It is always good to know where interest rates are in your relative area.  Here in Loudoun County, the majority of homes will be purchased with a jumbo loan versus a conventional loan.  A jumbo loan is defined as a loan that is larger than $417,000.

And because of the backlash against ARMs, we are seeing a lot more families opting for a 30 year fixed rate mortgage.

So today's poll asks the question:

Follow this link to find the answer

Loudoun County Sales Statistics for July - 2007 vs. 2006

Loudoun County Sales statistics for July 2007 as compared to July of 2006 are incredibly similar in many areas.  Here is a breakdown and analysis of the median and mean comparisons of List Prices, Sales Prices and Days on Market as well as Total Sales and Sales Price as a Percentage of List Price.

July 2007 vs. July 2006

Total Sales:  397 vs 395

This number has been very similar for almost every month this year.  In fact for the first seven months of the year the difference is only 21 sales, 3039 vs. 3060. 

Average List Price:  $530,280 vs $525,247

This is the average list price of the home when it went under contract.  This is useful for determining what list price will motivate a buyer to submit an offer.  When combined with the Percentage of List Price it can give you a fairly accurate idea of what homes are actually selling for before they go to closing.

Sales Price as a Percentage of List Price: 97.5(est) vs. 97.7

This number has stayed fairly consistent and although we don't know the exact number for July of 2007, the previous quarter the number was 97.5 and it hasn't changed much this year.

Average Sales Price: $517,023 vs. $513,324

Contrary to what many people think, the average sales price for a home in Loudoun County has not changed much at all in the last 12 months.  And although it does show a slight increase in price versus last year, this is a little misleading due to the fact that many more newer homes have sold this July versus last July. 

Median List Price: $434,900 vs. $449,900

The median list price is the price at which half the homes sold for more than this price and half the homes sold for less.  I believe this better reflects the trend of home prices in Loudoun County because it doesn't let a few very high priced homes skew the number.  This number is the only number that shows a significant difference versus the previous year.

Average Days on Market: 98 vs. 99

This number has stayed consistent for the last year around the 100 mark.

Median Days on Market: 69 vs. 81

This number tells us a lot more than the average Days on Market number.  The fact that the number is 12 days less than last year says that people who are listing their house this year are doing a better job of pricing it to sell.  This could mean they are pricing it lower to begin with or making adjustments to the price sooner. 

Bonus Statistic

Average Listing Price Adjustment:  $23,209 vs $30,038

This statistic is the amount of money a seller had to reduce their list price before they got to the price that enticed a buyer to write an offer. 

Coupled with the Median Days on Market statistic, the Average Listing Price Adjustment data suggests that sellers this year are pricing there properties more accurately, making smaller price adjustments and selling in a shorter period of time than the sellers of last year.

The Median Home in Loudoun County

The median list price of a home that went under contract in July of 2007 was $435,000.  Here are the pictures of those six homes and some statistics of those homes. 

4 Bedroom/2.5 Bath/1 Car Garage on .12 acres in South Riding

Approximately 2100 square feet on upper two levels, unfinished basement, built in 2002

4 Bedroom /3.5 Bath/2 Car Garage end unit in Ashburn

Approximately 2700 square feet on 3 finished levels, built in 2003

3 Bedroom/2 Full, 2 Half Baths/2 Car End Unit in Sterling

Approximately 2550 square feet on 3 finished levels, built in 1997

3 Bedroom/2 Full, 2 Half Baths/2 Car Interior Unit in Leesburg

Approximately 2900 square feet on 3 finished levels, built in 2004

3 Bedroom/3.5 Bath/2 Car Interior Unit in Sterling

Approximately 2550 square feet on 3 levels, built in 1997

3 Bedroom/2.5 Bath/2 Car Garage End Unit in South Riding

Approximately 2100 square feet on 3 levels, built in 2000

Photos courtesy of MRIS