Is It Really Recovery Time?

October's figures are out for the Augusta-area, and lemme tell you - it's looking pretty darn good!  The 1st Time Homebuyer Tax Credit has been extended and expanded, and it seems to be having an effect on our local market.   Consider these sales totals:

	2008	2009
September Sales	414 homes	431 homes
October Sales	373 homes	431 homes

Although the Greater Augusta Association of Realtors (GAAR) Multiple Listing Service (MLS) does not provide data on how many of these sales involved 1st Time Homebuyers, it seems improbable for our numbers to have done better than last year WITHOUT some incentive stimulating sales.

C'mon Joe, Are We Really Coming Out of The Slump?

Here's the rub:  according to application data from the Mortgage Bankers Association, actual purchase applications where down nationally 3.1% in October - even though interest rates decreased on average to 5.04% from 5.07%.

Another fact - despite good numbers for September and October, we remain down -6% on 2008's numbers (which where down 28% on 2007).   Yes,  we've gained ground, we started 2009 with a horrible January, down 24% on 2008 (in other words, down 52% on 2007), so being down six percent by October is an improvement. 

Here's what I think:  The tax credit was not extended (and expanded) until 5 November.  Until that date, there where buyers scrambling to take advantage of the benefit before it expired on 30 November.  Given how long it takes to close on a home when financed - we should expect November numbers to take a nice jump over last year as well.  The reason being - most contracts for November closings where written in October (or earlier) - so those buyers believed when they wrote the contract - that the credit would expire.

Can I Get The Credit? 

The credit was extended until 30 April 2009, and expanded to add "move up" buyers who have lived in their current home at least five years (yes, you have to sell that home and buy a more expensive one to get the credit).

If you're thinking of buying a home before the NEXT expiration date of 31 March 2010, see if you qualify by clicking this link:

Cheat Sheet for Tax Credit Qualification

Military, Intelligence and Foreign Service Benefits

One thing I do like about the changes, they add provisions that help our military men and women out.  These benefits are also open to intelligence and foreign service personnel.

For example, someone who deploys for over 90 days (must be outside the U.S.) in 2010 will get an additional year (until 1 May 2011) to purchase a home and claim the tax credit.

There are additional benefits for these folks - including not having to pay back the credit if you have to move before the three-year occupancy deadline.  You can read about them here:

Homebuyer Tax Credit - Armed Services Members, Others

 What's Next?

The extension of the credit should inject some sales into the winter market.  Remember - October-March are the slowest sales months of the year for real estate - people like to move while school's out and the weather's good.

The bottom line is that nationally, 1st Time Homebuyers accounted for only 36% of sales in 2006, and by some accounts they now account for almost 50% of all sales.  It has provided a good "bump" for sales, but it is far from the cure. 

The housing crisis has its roots in the mortgage industry and predatory lending.  One required nothing more than a pulse to obtain a mortgage, and astounding products where rolled out to enable people to afford five times the home they should actually purchase.  Adjustable Rate Mortgages, Alt-A products, and sub-prime loans all caused what we're now going through - not the lack of a "credit" for buying a home.  There is a natural order to things - we over-built, over-bought, over-spent, and over-borrowed.  Now we're spending less, borrowing less, and only buying essentials.  Deplete the existing inventory through qualified buyers, and the market adjusts - back to another "Sellers Market."

Artificially inflating the market with a gallon of tax credit may help in the short run, but it is not the natural order of things.  My milk has an expiration date, I'm glad the tax credit does too. 

Ok, several websites later, I still don't know myself!  However, it does seem likely that the credit will be extended and modified to phase it out over the next year. 

In  a rider to the Unemployment Bill currently before the Senate, there seem to be several options on the table, and none of the news sites or blog destinations seem to agree on much.  Here's what I've seen:

1 - Credit will be extended through October of 2010, but will reduced by $2,000 every quarter, starting with a reduction to $6,000 on 1 January 2010 ($4,000 on April 1, $2,000 on July 1).

2 - Credit will be modified to 10 percent of the sales price, capped at $7,290.  In this modification, step-up buyers will also be able to use the credit - not just first timers.  These moving-on-up folks must have been in their previous home a minimum of five years.

3 - Credit extended as-is through March of 2010, then reduced $2,000 every three months - phased out by December of 2010 (similar to the 1st option).

4 - Raising the salary cap of the credit to $300,000 per family, $150,000 per individual (currently it's half that).  Also, remove the 1st time home buyer requirement and open the credit to all primary residence purchases.

As you can see, there are several options on the table, and this does not cover all of them.  Per Inman, Bloomberg, The Washington Post, and Jay Thompson (probably the best of the bunch - the Phoenix Real Estate Guy), a deal was reached among Senate Democrats last night to re-write the rider to the Unemployment Bill with the #3 option above. 

It seems likely the credit will be extended, but keep in mind this was only an agreement among Senate DEMOCRATS - it must still pass the Senate itself, the House, and the President.  More to come as I find out.

KW "This Month In Real Estate" -  With Great Tips On Purchasing Foreclosure Properties

Here's the October edition of "This Month in Real Estate" with Jay Papasan.  In addition to some national-level statistics and conditions, there's a short segment on purchasing foreclosure properties - with great tips on what to look out for:

I hope you enjoyed today's post - I'll be back to let you know how the whole tax credit deal works out once it's finalized.

I'd planned on a more comprehensive update on the 1st Time Homebuyer Tax Credit by now - so I apologize to those of you who have no doubt been hanging on the edge of your seats, waiting on the next great missive from yours truly.

The Credit expires on 30 November, and unfortunately, as of this writing, we still have no comprehensive decision by the Administration.  By my count, there are at least nine Senate or House Resolutions to extend, modify, increase, or otherwise edit the benefit.  These proposals range from increasing the credit to $15,000 (and increasing the income requirement), removing the “1^st Time” label and making it available to any purchaser buying a primary residence – to simply keeping the current credit in it’s 2009 form and extending it until June of 2010.  More to come, I’m sure. 

WHAT DOES THAT MEAN TO ME?

Depends.  From a purely business perspective – I want the credit extended, increased, and modified (not just for 1^st timers).   It has increased our business – and that’s how I feed my family.  As a voting American – I do not.  Using the US Treasury as an ATM only increases the deficit.  Someone’s going to have to pay for it in the long run, and the Wall Street Journal predicts extending the credit until June of 2010 (with no modifications) will cost an additional $16.7 billion.  How do you get rid of a deficit?  Tax more.  I don’t want that. 

SO, WHAT’S UP IN AUGUSTA?

Some stability has been injected into the market – and Columbia and Richmond Counties continue to see numbers that compare favorably to 2008’s figures.  Keep in mind that year pretty much stunk – down almost 48% on our best year ever – 2006 – so we’re still in a slow sales mode – it just hasn’t gotten worse.

For the first time since 2006, overall residential figures increased for September over the previous year.   Sales for 2008 totaled 414 properties, while September of this year tallied 417.  A relatively insignificant increase – but significant in the fact that it is the first increase in sales since the housing crunch began.

Columbia County posted higher numbers for September over last year, with 170 sales (2008 – 162), while Richmond County posted it’s third straight increase over the previous year – 172 properties (2008 Sep – 163). 

New Construction for this year seems on track to have a slightly slower year than 2008.  Considering 2008 (1,516 sales) marked the worst year for new homes since 2002 (1,483 sales), this is NOT good news. 

With three months to go, New Construction sales have tallied 1,182 homes sold as of 30 September 2009.   Although that works out to an average of 131.33 homes per month – the October-December sales period is always slower than the summer months.  I anticipate another down year, approaching the 2002 number.

PLEASE TELL ME WHAT THIS MEANS!

According to the National Association of Realtors – 1^st Time Homebuyers now account for 48% of all home purchases – up from 38% pre-2006.

If the tax credit is extended – this should continue.  If it’s modified - it should increase sales.  If it is allowed to expire - sales will slump through early spring.

Not a big deal if you’re in the trade and you’re proactive in your business planning – a very big deal if you’re not.  Sales are always slower in the winter months, and typically start picking up in late February and March.  Should happen again – with or without the credit.   

If the only reason you’re buying a home is to get a tax credit, you probably need some more extensive financial counseling than I can offer you here – to include a urinalysis.  On the other hand, if you DO buy a home, and take advantage of a program designed to stimulate the housing market – more power to you!  Spend wisely!

THE PROMISED “NOTHING TO DO WITH REAL ESTATE VIDEO:”

Our men & women in uniform never cease to amaze me.  I’ve seen this video many, many times.  I’m including it here simply because I cannot help but admire the ingenuity, creativity, humor, and dedication of these Sailors.  It is “make-me-giggle-good,” and you’ll surely want to get up and dance before it’s over!  Enjoy!

Thanks for reading, thanks for watching - leave a comment!  Have a fine Navy Day!

There's some good numbers out there from August sales, which continue to indicate the Greater Augusta area may be at or near the bottom of the housing crunch.  I'll add a word of caution at the end of this post, but for now, enjoy....

Residential Single Family Homes Post Gains

For a market that began 2009 down 24% on 2008's horrible numbers, things have perked up nicely.  Three months of this year have posted 1% single family home gains on last year.  April, July, and August of this year all saw increases year-over-year in home sales.  These numbers are limited to single family homes, and exclude townhomes, condos, and mobile (manufactured) homes.

Richmond County led the charge, posting 175 sales for July, and 169 sales for August (vs. 2008's numbers of 140 and 138, respectively).

Columbia County sales continued to mirror 2008's number quite closely, with 196 July sales, and 171 August closings this year.  This compares favorably to '08's numbers for July (198) and August (175).

The Identity of Today's CSRA Home-buyer

2009 Buyer Identity Greater Augusta Area*

17.51% Cash	26.70%Conventional	28.96% FHA	25.03% VA
10.92% Two Bedroom	49.16% Three Bedroom	30.79% Four Bedroom	8.23% Five Bedroom
Average Sales Price $154,429	66% of all sales below $180K	Homes listed for over $300K account for only 7% of all sales	No sales in 2009 over $800K
1,399 total sales in Columbia County	1,163 total sales in Richmond County	1,095 New Construction Homes Purchased	2,352 Resale Homes Purchased

* - numbers include ALL residential sales, including townhomes, condos, and manufactured homes.

The Promised Party-Pooper Punchline!

OK, things seem to be sucking less, and the numbers tend to indicate we may be at the bottom of this downward spiral we began in mid-2006.  Here's a great big reason why all of this may not mean doodley-squat come November:

The $8,000 First Time Home-buyer Tax Credit expires on 30 November. 

Although statistics on 1st Timers in our market are hard to come by, I do believe they have helped lead the way out of this market - in part because national statistics indicate anywhere from a 7%-10% increase - with First Time Home-buyers accounting for 48% of all sales in some sectors of the country.

Regardless of whether or not you support the tax credit, it is undeniable that it has led to an increase in sales.  Some critics claim the credit actually costs taxpayers over $40,000 per home - others that the economic benefit (nationwide)  far outweighs the cost.

If you want to weigh in with your government representatives about extending this credit, you can find your Congressmen and Senator's contact information by clicking here.

I hope you've enjoyed this blog - and relish your comments - please feel free to leave a note with  your opinions.  Thanks again for visiting.

Richmond & Columbia County Sales

Although overall Greater Augusta Association of Realtors MLS numbers for the entire Central Savannah River Area (CSRA) where down over July 2008 (515 July '09 sales vs. 536 in July '08) - Columbia and Richmond County tallies told a much different story.

Columbia County's sales remained flat for the second month in a row - numbers for June (235) and July (229) of this year where virtually identical to 2008's June/July figures of 237 and 234. 

Richmond County - after posting a dismal 25% drop for June 2009 (157) over 2008 (205), showed a modest increase in July - with 192 sales versus the '08 figure of 175.

If August MLS data is similar, it would be a very strong indicator that we have reached rock bottom in the housing market slide in the CSRA.

REALTYTRAC.com figures for Augusta

According to RealtyTrac.com Augusta's average resale price (not foreclosures) has risen steadily for the last four months.  From a record March low of $110,529 to a July average sales price of $145,561.

Hephzibah - the other major area of Richmond County - bottomed out in October of 2008 with an average sales price of $107,319.  July's average for Hephzibah was $150,845.

The summer months always bring increased sales in any market, and the price point trends higher during the May-August time frame, but these numbers still exceed 2008's by several thousand dollars.

REALTYTRAC.com figures for Columbia County

The three main population centers of the county are Evans, Martinez, and Grovetown.  I analyzed the average sales prices by zip code, and here's the results from RealtyTrac:

Average sales prices in Evans have plummeted.  The average price of an Evans home in June of 2008 was $261,823.  July of this year that average fell to $219,516.   The highest month's average in all of 2009 was May - $243,948.

Martinez - home to many of the older single family homes due to it's proximity to the primary industries in Augusta (and therefore a lower price point) - also saw a dramatic drop in average sales price.  From a high of $185,943 in August of 2008 to July's average of $156,138.

Grovetown - the newest and fastest growing area of Columbia County - has remained somewhat immune to a drop in average price.  June's average was an all-time high - $198,166, and although July's number was lower ($172,454) - it is still not far off the previous high of August of 2008 at $179,519.

 So Are We There Yet?

It remains to be seen if the bottom of the market is occurring right now.  As I stated earlier, I'd like at least one more month of data to decide if the end is really in sight.  If August sales remain level with 2008 - or even post increases - I'll be jumping for joy with the rest of you. 

There is - however - a GREAT BIG PILE OF STINKING DUNG LOOMING ON THE HORIZON.

THE DEATH OF THE $8,000 TAX CREDIT

On 30 November of 2009, the $8,000 First Time Home Buyer tax credit expires.  If you have not closed by that date - you are not eligible for the credit.

First Time Home Buyers account for nearly half of all purchases in today's market - up nearly 10% on pre-2006 figures.  There is little debate that the tax credit has led to this massive increase in first time purchasers.  Some real estate and mortgage websites even claim the percentage of first-time buyers would have been in the low 30% range - had there not been this added incentive to buy.

Is There Hope?

In a 23 June post - the very awesome Jay Thompson- also known as the Phoenix Real Estate Guy - wrote an outstanding blog post about five different bills before Congress designed to expand or extend the 1st-Time Home-buyer Tax Credit.  You can read that post by clicking here.

In short, unless you've been living on the moon - you probably know that there's a golden rule in Government - "Most Bills Die In Committee."  I expect at least one of these bills to be modified and implemented prior to the November deadline, or we'll be seeing very dismal winter housing sales.  Just remember - if you don't vote - you don't count.  Contact your representative to remind them these bills are critical to the recovery of the housing sector.

I hope you enjoyed this latest entry - and relish any comments you may have - good, bad, indifferent... 

If you'd like to see me focus on a particular sector of the housing market or local area, I'd love to hear your recommendations.

Of the last six weeks, we've had out of town company staying with us for four (in two-week stints).   School started today (think of shopping, open houses, sales tax holidays, etc...).  It's been hectic.  If you've read my past entries, you know Housing numbers haven't exactly been kicking butt here in Augusta.  Work has been tough - and my wife and I have had to find other sources of referrals and leads to accommodate the shift in the market - all while entertaining various relatives and getting the kids ready for school.

Last Wednesday, I joined three of my Keller Wiliams buddies on the golf course for some R&R.  If you know Shea, Ricky, and Rod - you know the "R&R" really stands for "Ridicule and Ribbing."  We're a moderately competitive bunch - intent on holding our own while ensuring no missed shot goes unpunished (at least in the verbal jousting category).   Rod hit a tee shot a whopping fifteen feet, which I promptly followed with "A lot of guys wouldn't have played it like that."  You get the gist...

By the time I got home (it had been about 96-degrees with high humidity), I was soaked, tired, hungry, and HAPPY.  The five hours-plus I'd spent with these friends - full of good-natured ribbing and genuine camaraderie - sweating, swinging, and putting in the hot Georgia sun - was an absolute BLAST.  I'd put my phone on "silent" and forgot to turn the ringer back on.  Got home, joined my wife and kids by the pool, and grilled up some good dinner.  I had one of those nights' sleep you remember - woke up rested and refreshed - and ANXIOUS to get back to work.  Noticed my phone ringer was still off - and I'd missed several calls.  None of them life-threatening or urgent.

At the office later that morning, I realized that it was the first time in a couple of weeks that I was fully focused, energized, and confident.  The bottom line is I had not taken the time to replenish my batteries.  The stresses of entertaining, working, shopping, minor car troubles, LIFE - had gotten me down, snuck up on my usually-positive demeanor and changed me briefly to someone else. 

Take the time - EVEN IF YOU HAVE TO MAKE IT A SET APPOINTMENT ON YOUR CALENDAR.  Take the time to hug your kids, kiss your spouse, play golf, play whatever you want, dance in the rain, skinny-dip, whatever.  Turn OFF your phone, get away from the computer.  TAKE THE TIME.   Ever hear of Nicklback?   Listen to the words to  "If today was your last day."  Go forth and DEGAUZE yourself!

By the way - I birdied 18 to secure a six-stroke victory.  Talk about a GREAT DAY!

This video - from ThinkBigWorkSmall.com, explains the parts of the Housing and Economic Recovery Act (HERA) that established new requirements for lenders and mortgage brokers for Good Faith Estimates (GFE) and Truth In Lending (TIL)disclosures.  The video is geared to mortgage brokers and Realtors, so a lot of the content will be gobbledegook to most of you - but the salient points come through clearly.

Click here for the Video: HERA Is Not Your Hero in RE

In Georgia, these changes may not have the extensive effect the video implies - mainly the additional 14 days it may now take to get a mortgage - because our contracts already have built-in due diligence periods and financing contingencies that should accommodate these changes with little impact.

The regulations can affect YOUR closing - whether as a Buyer or a Seller - if the Buyer decides to change loan products or the rates change and the Buyer wants a lower rate.  The margin of error is small - if there's a difference of more than .8% in the GFE/TIL from the initial application and the FINAL costs to the Buyer - then the three day disclosure period comes in to effect, which WILL mean you cannot close until three days after the Buyer physically gets the new GFE/TIL.

Anyway - hope this is of use to some of you!  Let me know if you need any more info - and as always - I relish your comments!

Per the Georgia Department of Revenue, the following items will be exempt from all local and state sales taxes:

Articles of Clothing. The exemption applies to articles of clothing and footwear with a sales price at time of purchase of $100 or less per item. There is no monetary limit on a purchase as long as the price of a single item does not exceed $100. Clothing accessories such as handbags, umbrellas, etc. are not exempt.

Personal Computers. A single $1,500 or less purchase of a personal computer (PC) and/or related accessories is exempt. The exemption does not require the purchase of a “personal computer base unit” (tower, desktop, laptop) and is extended to peripheral devices such as modems, printers, speakers, non-recreational software, etc. If a single purchase exceeds the $1,500 maximum the entire purchase is taxable. A single purchase is considered the total of all sales made to a customer in one visit to a store.

General School Supplies. The exemption applies to the purchase of general school supplies with a sales price at the time of purchase of $20 or less per item. There is no monetary limit on the purchase as long as the price of a single item does not exceed $20.

The list of tax exempt computer supplies from the Department of Revenue's site can be found by clicking here.

The list of exempt school supplies can be found by clicking here.

Finally, exempt clothing articles can be found by clicking here.

Hope this helps!

Columbia County - on the one hand - showed a flat sales month when compared to June of 2008.  Residential sales (single family, townhomes, condos, manufactured homes) for June '09 in Columbia County came in at 235 closed transactions - compared to 237 for the same month in 2008.

Richmond County numbers plummeted over 2008 - a strong sign that the Augusta Housing market - as a whole - is far from recovery.  June 2009 sales in Richmond County totalled 156 properties.  A stark dropoff from an already-horrible 2008 figure of 205.

When taken in context - it seems Columbia County's flat sales number is actually an improvement.   It marked the first time monthly sales did not reflect at least a double-digit drop over the same month of the previous year since 2006.  A trend?  Too early to tell.  If July and August numbers show continuing stability, it may mean the Columbia County macro-level of the CSRA market has hit bottom.  I do not sense this to be the case in the rest of the area.

Richmond County - home to the vast majority of foreclosures, distressed, and lower-income properties in the CSRA - is still suffering the recession impact and it may get worse.  There are still close to two million Adjustable Rate Mortgage and other toxic mortgage products scheduled to recast over the next few years across the country.   This means an almost certain increase in foreclosed homes in the Augusta area.  This will not be limited to the Richmond County macro - but it is in that sector of our market that many believe the predatory lenders took the most advantage of home buyers over the last several years.

The bottom line is all Augustans are still weathering the Housing Crisis storm, and it will probably be well into 2010 before any hint of a housing recovery truly affects the ENTIRE area.

If you feel you are in peril of losing your home to foreclosure - you need to click here to watch a video from the FTC about Foreclosure Rescue Scams.

I look forward to any comments about this post.

Due to the economic recession, the 2009 Georgia Assembly failed to appropriate funds for the HTRG.  The Grant will only be made available in the future if the state revenues grow at least 3%, plus the rate of inflation.

What this means to all Georgia homeowners who have filed for the homestead exemption is that you can expect at least a $200 hike in your property taxes for 2009.

One additional step you may want to take is to ensure you have your 2008 valuation handy when you receive your 2009 tax bill.  Compare the two - and if you have any concerns, contact the Tax Assessor for the county your home is in.  Keep in mind that any increase in your tax burden can be appealed. 

The Columbia County Tax Assessor's office actually posts what areas they intend to visit within the next 90 days to assess 2009 tax values.  you can find this list by clicking here.

If you are registered for the homestead exemption and pay your taxes via your mortgage lender's escrow account, remember to budget for the $200 shortfall when your lender pays your tax bill.

May total sales of Residential, Manufactured Homes, Condos, and Residential Attached (Townhomes) decreased over April figures for the first time since 1999.  May's total of 401 sales - although only a slight drop from April's final tally of 405 sales - is still a significant indicator that Augusta's economy is not the rosy picture often referenced by local media reports.

The 401 sales also mark the lowest May sales figure since 1999 (387 sales).

Current market conditions are off 17% on 2008's numbers. 

There are some bright points in the data - we started the first three months of 2009 down 20%, so the summer market is contributing to a slight decrease in the differential - so it sucks less than in March.

Townhome sales also rebounded with the typical spring coming and going of Medical students.  A market sector that had been down 43% over 2008 posted a meager 15% decrease over that year's figures.

Another good sign is an increase of average sales price of over $11,000.   May's average totalled $163,919, compared to April's $152,465.

The percentage of list-to-sale remains above 97%, indicating Buyers are still willing to pay near-list price for properties in our area.

The absorption rate - an indicator of how long it would take to sell all current inventory - rose slightly, to 10.6 months, but still represents a 5.5 month reduction on January's 16.1 month rate.

May sales have an average of 129 Days on the Market (DOM), an increase of 15 DOMs over April.

The bottom line is if you are a Buyer - there are homes to be had at great prices and great terms. 

If you are a Seller - hunker down, price the home right, and ensure IMMACULATE condition.  Offer closing costs up front and a home warranty.  Fix everything that's broken or an eyesore.  Good homes sell in any market, it just may take longer in the current conditions.

I believe the new HUD rules governing the use of the $8,000 Tax Creditwill evolve through June and into the late Summer as a means for First-Time Homebuyers to secure their downpayment.  This is especially important for VA Buyers who may wish to switch to FHA products to avoid a negative equity result from financing the VA funding fee.

Mortgagee letter 2009-15's Qualification guidelines are posted on HUD's website. 

I have mixed feelings about this - on the one hand it can be a great vessel for my VA buyer-clients to use another option and move in with more equity, but on the other it amounts to another down-payment assistance program - which have been proven to result in a higher percentage of foreclosures.

Unlike previous programs like Nehemiah - the use of the tax credit is not intended to be a vehicle for lower-income families to purchase homes.  Instead, it's purpose is primarily to free up frozen FHA credit lines by helping first-time home-buyers come up with the money for their 3.5% down-payment.

My mixed feelings come in whenever I see the government figuring out ways to give us a little money in order to borrow a lot of money.  The guidlines seem stricter, though, so I'm hoping the predators don't come back out of their holes to feast on the uneducated and uninformed. 

I would like to know your thoughts about this - I have a feeling the discussions on some of the great real estate forums will center on this issue for quite some time to come.

There are some restrictions - most notably the fact that buyers must purchase single family residences, but it is open to any resident who purchases a home between June 1st and November 30th of 2009.

Another important restriction is that the home purchased MUST have been available for sale on or prior to May 11th of 2009.  A primary intent of the bill is to reduce housing stocks, so I understand the motivation if not the execution.  There are some exceptions from what I understand - you can purchase a home that may not have been on the market providing it was in pre-foreclosure on the May 11th date.

Good news for Georgia buyers!  Another benefit?  This credit has no bearing on receipt of the Federal First Time Homebuyer Credit - so if you meet criteria for both, you get both.

This intrigues me in a couple of ways - most importantly the way it most affects my client base.

I thought of your typical VA homeowner and how they're really screwed in some markets because of financing the funding fee.  Now those same VA folks go to sell their homes in depressed markets only to find that by financing 103% of their home, they do not have the equity to sell and move on.

This FHA option seems excellent as an option for VA Buyers to convert to FHA Buyers and move in with 3.5% equity vs. -3% equity.  Three years later, they can sell the home (even if values have come down slightly - something my area has not done yet). 

This also saves them their VA entitlement down the road.

Imagine the scenario in this market where Sellers are more than happy to pay most (if not all) closing costs and our VA folks can truly reap a more measurable reward for their sacrifices?

The current VA structure, with the hefty funding fee (except for disabled vets), either needs to change, or perhaps undergo some modification to match up with what should no-doubt make a number of VA Buyers convert their applications to save what amounts to at least a 6% swing.

I'm speaking - of course - from an Augusta GA  Home Market perspective where $8,000 down-payment will buy you a very, very nice home indeed.....

The alarm I refer to in my opening statement has to do with the high volume of foreclosures that resulted from down-payment assistance programs nation-wide.  I hope this isn't just feeding the beast and waiting for more turmoil 3-4 years down the road.

Pending and Contingency properties as of this writing also appear to point to a robust May, with 719 properties revealed in a quick-sort of Pending sales.  A good number of these will either not close until June or July, and some may just be clerical errors, but I would still suspect we'll get close to - if not exceed - 500 sales for the month of May.

Late postings and other adjustments continue to drive the April sales figures beyond my expectations.  As of this afternoon, there were 400 closed residential (all types) listings in the MLS for April - a number that is sure to go up slightly before the reports are generated on about the 10th.   This exceeds the March sales figure of 389 properties - a good sign since the Masters Golf Tournament (always the first full week of April) usually puts the kebosh on a full week's worth of Buyer traffic in the area. 

The $8,000 Tax Credit, low mortgage rates, and extensive Seller offered-incentives will hopefully help us begin a moderate summer selling season, as we head in to a projected recovery in early 2010.

Well, it’s time to take a good hard look at how the 1^st quarter numbers of 2009 stack up, so here goes:

- Overall sales are down 17% on 2008 figures for the first three months of the year.  March sales rebounded to 11% down on March 2008, much better than January (down 24%) and February (16%) – so that 17% figure may go lower as we enter the better home sales months.

-  Expect April figures to decline slightly.  A full week of out-of-town guests for the Masters Golf tournament always puts a damper on the April sales figures – and I expect that trend to continue.  Since 2003, only one year saw an increase in residential says in April over March – 2006.  Every other year in that period has shown decreased sales activity for April over March.

- The average sales price for March of 2009 was $157,959 – almost $4,500 higher than the same period last year.

- Richmond and Columbia County continue to pace sales in the CSRA – with the west Augusta and south Augusta regions posting slightly higher totals than the Martinez/Evans/Grovetown (North of I-20) corridor of Columbia County.  Harlem and Appling continue to post weak sales figures – reflecting the smaller population of those areas of the county.

- As of this writing, 30 year conventional mortgage rates in the Augusta area are hovering close to the 4.65% mark, with VA and FHA rates also well below 5% - continuing the historical lows we’ve seen for the last several months.  There will probably never be a time period in my lifetime when homes are this affordable.  

THE BOTTOM LINE:  If you are selling – get your home on the market sooner than you planned.  We continue to weather the mortgage crisis storm and inventory is still high.  This is hand-in-hand with Gary Keller’s Vision Speech from the Keller Williams Family Reunion.  I’m paraphrasing, but he said in February that “the next six months will probably be the worst economic times you will ever see in your lifetime.”   With over 400,000 ARMs adjusting in 2009, there will continue to be foreclosures at record levels.  Expect things to bottom out by August, with the housing market posting a mild turnaround by the early 2010 months.   

If you’re buying, you probably won’t see this level of choice again for quite some time, and the concessions offered by Sellers in this market are phenomenal.   Interest rates are still historically low – how long that will last is anyone’s guess.   I certainly see rates continuing below 6% through at least November if not longer.

At the end of the day, good homes sell in any market.  If you are a First Time Homebuyer or have not purchased or a primary residence in the last three years, this is a perfect time for you - the $8,000 Tax Credit is an outstanding incentive.

The 2008 residential sales figures were down 22% over 2007's sales, but 2007 was the second best year ever in the Central Savannah River Area (CSRA).   All in all, 5,011 homes sold in the Augusta area last year.

Townhome sales where a bright spot in a down year.   With 529 townhome sales in 2008 - it became the second best year ever for "residential attached" sales.   For comparison 2007 was the best year ever, with 532 total sales, while the third best year fell way short of both - 2006, with 393 sales.  Proof positive that what we're really going through is an affordability crisis rather than a mortgage crisis.

The "sweet spot" of the housing market was between $100,000 and $179,999.  That sector accounted for fully 46% of all sales.  

The luxury market suffered the most.  Homes with a list price over $350,000 accounted for 6% of all sales.

The best news of the year comes from inventory reduction.  The number of available homes dropped every month since June of 2008 at a high of 4,713.  The end of December number of 3,955 represented a drop of 758 properties or 17% - the steepest drop in available inventory in MLS history.  Since real estate is a supply and demand industry - this is a good sign we may be near the bottom of the trough of this Buyers Market cycle.

Despite all the gloom and doom, CSRA sellers still received - on average - 97% of the list price of their homes when they sold.  This edifies recent media reports of Augusta continuing to see mild appreciation in a nationwide trend of negative appreciation.  When you consider all the foreclosures that get lumped in with those statistics, it's probably more like 98-99% on a regular Seller-Occupant to Buyer-Occupant transaction.

I'll keep more market news in here as things evolve - please feel free to let me know what you think.  I can also send you the reports that back up my data - just drop me a line and I'll get them to you.

All in all Augusta numbers were down, it is tougher to sell your home, and you need to have agressive pricing and excellent terms to offer Buyers if you intend to sell.