Doug Francis | Realtor

  • Our Business
  • About Me
  • Home Sellers
  • Contact

Is the economy really feeble?

October 20, 2009 By Doug Francis

ashburn villageI was in Ashburn Village over the weekend showing some homes when my clients asked what a home would have sold for just a couple of years ago? In my opinion it would have been close to $775,000 two or three years ago, but the home sellers were asking $575,000 on that cold Sunday in October.

Now that’s huge. But it is an honest result of a feeble economy. It’s times like these when we are all panicky that Mr. Potter would be buying, picking up some bargains…

I chose the word “feeble” because it is pretty accurate right now, and also because it was bantered around on CNBC’s “Fast Money” which I listened to over XM radio on the way home. They can get addicted to a word on those shows for at least for 30 to 90 seconds.

It is essential to understand that residential real estate is a true barometer when trying to observe economic activity. The formula is easy, especially when you are on the ground floor like I am.

Here are some key elements that impact real estate economics:

  • Job security
  • Mortgage interest rates
  • Mortgage Backed Securities
  • Personal wealth
  • Price of gasoline
  • Price of real estate

Job Security: In the past few months I have had a handful of clients pull back the reins on real estate decisions because of job insecurity. The fear of layoffs is a huge influencer when deciding to buy or sell a home, or to commit to a new mortgage.

Mortgage Interest Rates: Since January 2009, the mortgage rates are down over 20% going from the low 6.25% range to 5%. If they pop up to 6% then consumer buying power drops like a rock. Resets in conforming loan amounts are also in the mix. Again, another important influencer.

Mortgage Backed Securities: I sat in on a presentation with Dr. Michael Fratantoni of the Mortgage Bankers Association on September 23rd at George Mason University. Take a look at the slide show and you will see the chart that shows how the Fed and the Treasury were the majority MBS buyers most of 2009, and the program is planned to cease in March 2010. There will be a huge void in this market.

Dr. Fratantoni – NVAR Annual Economic Summit
View more presentations from NVAR .com.

Personal Wealth: The severe drop in the world stock markets was a sobering wake-up call to everyone with a retirement portfolio, stock investments or stock options. And if you were looking at selling your home then your equity stake may have been cut dramatically. I have a number of clients who have stock options that are virtually worthless.

Price of gasoline: Yes, it is about $2.59 at the pump but the price per barrel has been creeping up recently and that will trickle down to all drivers. I firmly believe that $4.00 gas pushed many people over the financial edge in 2008, and was one last nail in the coffin for many.

Price of real estate: We currently have an excellent buyer’s market. Prices have dropped significantly, mortgage interest rates are around 5% for 30 year, fixed rate mortgages, and in the case of that home in Ashburn Village… well, those sellers were offering a bargain to a buyer (in my book, this home was a 10). And still, at that great new price it has sat on the market for 75 days. To me, this lack of buyers really defines a feeble economy.

Now, if you are secure in your job and were savvy enough to buy into the stock market in March when  things looked really grim (Dow 6,500 and sinking) so you have a nest egg, then this is an amazing time to buy the home of your dreams. These homes are “on sale”. Hello Mr. Potter!

Take a look at some of the recent stats on market activity… yes, buyers are in the driver’s seat. But buyers like this are far and few between which perpetuates the feebleness of the economy.

George Bailey said it in “It’s a Wonderful Life”,

Can’t you understand what’s happening here? Don’t you see what’s happening? Potter isn’t selling. Potter’s buying! And why? Because we’re panicky and he’s not. That’s why. He’s pickin’ up some bargains. Now, we can get through this thing all right. We’ve, we’ve got to stick together, though.


Share this with a friend...Share on FacebookTweet about this on TwitterShare on LinkedInPin on PinterestEmail this to someone

Filed Under: Blog Tagged With: economy, virginia

About Doug Francis

A Realtor specializing in unique and new homes around Vienna, Virginia, Doug started writing a first-hand blog about his everyday real estate experiences a decade ago. In depth, helpful and fun has always been the objective. Outside real estate, he "starred" in a tech commercial for Verisign's "Where the World Clicks" campaign, and was quoted in Money Magazine's Best Places to Live article on Vienna. He's a Boston University graduate who feels morning coffee is non-negotiable.

Being able to guide my clients through many real estate sales, either moving out, moving in, or just across town, has been a rewarding experience that helps when discussing a plan with a future client.

Being able to help them focus and understand our proven sales plan always eases their anxiety of this looming personal task. And, putting it into bite-sized steps always helps them get where they really want to be.

My background… I’ve been an active licensed agent in Virginia for 25 years, work at TTR Sotheby’s International Realty in McLean, and sell homes in all price ranges. I donate to the town tree replacement fund, participate in a neighborhood citizens association, and try my best to stay in shape.

Questions? Email doug@dougfrancis.com or call me at (703) 304-6827 to discuss your plans. Cheers!

Thinking of Moving?

Let me know if you want to talk about your house and getting it ready for the market. Let me know if it's a second opinion, it's okay. Start here and let's talk.
  • This field is for validation purposes and should be left unchanged.

Have a question?

Homeowners: Add a level of privacy

name withheld by request

Privacy: Remove your name

Looking for testimonials?

Read through a collection of client comments originally posted on Zillow, Google and Trulia. See what my clients say...

Looking for a Custom Home?

Insights into New Homes in Vienna VA
Home project during pandemic

It’s Okay! Pretend like you’re Getting Ready to Sell

Right now, having a do-able home project may be just what you need to reduce your stress levels. Really, it’s okay to pretend a little while improving your home and current lifestyle. Putting together plans to help my clients prepare their homes to appeal to the Vienna real estate market is always fun, but, these […]

“Doug nailed it! Within days, we had three offers, one of which not only met, but far exceeded all of our goals.”
– R. Pollard

“He truly was a partner integrating us unto the community and made it easy for us to take advantage of all Vienna has to offer.”
– A. D’Eredita

“We are so thankful we found Doug to guide us through the complex home selling and buying processes!”
– Scott and Jennie

About Doug Francis

I am a Realtor with TTR Sotheby's International Realty® just outside Washington D.C. in Northern Virginia. I have been a full-time Realtor licensed in Virginia since 1991, and cover a big territory specializing in the Vienna real estate market and custom homes for sale.

I have unique knowledge of digital real estate marketing ~ and my marketing starts here. My elite clientele has been attracted to my results-oriented strategy for years, and I am accepting new clients now.

Thanks for reading... and feel free to contact me at 703-304-6827 or send me an email at doug@dougfrancis.com anytime!

Search for a subject

Contact

Doug: (703) 304-6827

TTR Sotheby's International Realty
6723 Whittier Avenue McLean, VA 22101

Office: 703-319-3344
Why do people hire me?

Search for homes in Vienna

Vienna Real Estate Guide

Logo for Washingtonian Best 2020
This material can only be used with written permission from Doug Francis, Realtor. Copyright 2020

Equal Housing Opportunity

 

Copyright © 2021 · Minimum Pro Theme on Genesis Framework · WordPress · Log in

Deciding where you should start is often the most complex decision when planning a move.

I help my clients achieve their real estate goals starting with a plan.

Let’s talk, and give your dream a deadline.


Please know that we don’t share your phone number, email or any other information you provide.