Buying? Credit Check!

Now that the current market has shifted to the buyers, today’s buyer’s are in the drivers seat and sellers are much more likely to offer incentives, such as paying for the buyer’s closing costs. But in order to seize in the opportunity, buyers must qualify for the mortgage, thus do some homework on polishing their credit score.

Here is some useful information in regards to the FICO credit score:

1. The Players
   • Equifax
   • Transunion
   • Experian
2. Main reason for FICO Scores is to predict our chances of default on a specific loan
   • Score ranges from 30-850
   • Scores below 620 are considered high credit risk
   • Scores over 660 are below average risk
3. Hoe are the scores weighted
   • 35% is established from your payment history, collections, and public records
   • 30% is established from outstanding balances being carried on your accounts
   • 15% is based on your length of credit history. It is better to have credit for longer timeframes, so that a history is built up on your record
   • 10% is established around the type of credit you have
   • 10% is established around your request for credit, your scores are impacted within certain FICO rules. You can, however, apply for as many mortgages and car loans as you want, as long as they are in a 14-day window. FICO allows this because they are big-ticket item

Party On..

The housing market in the United States is composed of thousands of individual markets, each having its own characteristics and each (usually) marching to a different drummer. So, as the snow melts and housing activity slows, we can see these differences and there will be different paths for different markets
There will be a few selected metropolitan areas where the economy is so good and housing so under-built that the boom will continue, albeit at a slower pace. The Washington-Baltimore metropolitan area is such a market. Already a full beneficiary of the boom, Washington will continue to grow as Federal spending continues to increase.

Housing Downswing Expected to Bottom Out and Go Up !!

The current real estate market slow down is temporary according to RIS Media, a leading Real Estate Informational tool. The market is expected to reverse back to growth in mid-2008. This is a fantastic opportunity for buyers to seize this day! The following is taken from recent RIS Media release:

RISMEDIA, September 14, 2006—The National Association of Home Builders (NAHB) told Congress that the current downswing in home sales and housing production following the record housing boom of 2004-2005 is expected to bottom out around the middle of next year and gradually move back up toward trend by late 2008.

Testifying before the Senate Economic Policy and Housing and Transportation Subcommittees, NAHB chief economist David Seiders said that while the housing downswing still has some distance to go, "various economic and financial market fundamentals figure to be supportive of housing demand for the foreseeable future."

These fundamentals include the following:

• Payroll employment is proceeding at a decent and sustainable pace.
• Household income growth is strengthening as the economic expansion proceeds.
• The interest rate structure is favorable, mortgage credit is readily available and monetary policy has stabilized following a long run of upward rate adjustments.
• Energy prices have receded from record highs earlier this year.

And while the current downswing in home sales and housing production will continue to detract from overall economic growth through mid-2007, Seiders said that much of this negative impact should be offset by strengthening activity in other sectors of the U.S. economy (spending on capital equipment and software, nonresidential structures and exports).

Be in your Home for the Holidays....

Real Estate Markets fluctuate between buyer’s markets and seller’s markets. Right now is the great time to get into a brand new home just in time for the holidays and here’s why. These are the latest details from the Metropolitan Regional Information System that convey that the trend towards a buyer’s market has indeed arrived. Today’s buyer’s are in the drivers seat and sellers are much more likely to offer incentives, such as paying for the buyer’s closing costs.

The average days properties stayed active on the market (or “DOM”) in Fairfax, Alexandria & Arlington Counties has more than doubled from October 2005 to October 2006. In 2005, the average DOM was 34 days compared to this year at 83 days. At the same time, the total Sold Dollar Volume in these counties has gone down 25%. Average home prices, as expected with this downturn, have gone down 5%

The average days on market has sky rocketed to 102 from last years 35 days (that’s a 190% change) in Prince William County. At the same time, total sold volume has gone down 50% and the average price has fallen 6%.

Northern Virginia real estate market watch..

Here are today's MLS Listings statistics from MRIS (Metro Regional Information System, Inc).

Fairfax County, VA

• Active Listings: 6,796
• Active with Contingency: 617
• Pending: 794
• Sold: 1,006 (Last 30 Days)

Loudoun, County, VA

• Active Listings: 3,388
• Active with Contingency: 187
• Pending: 261
• Sold: 349 (Last 30 Days)

Prince William County, VA

• Active Listings: 4,301
• Active with Contingency: 167
• Pending: 341
• Sold: 391 (Last 30 Days)