The Franklin News-Post|
P. O. Box 250
310 Main Street, SW
Rocky Mount, Virginia 24151
By CHARLES BOOTHE - Staff Writer
The real estate market has been slow the last few years not only here but across the country.
But sales trends show that may be changing.
Statistics for the region show a positive trend in the housing market, according to the Roanoke Valley Association of Realtors.
For example, in January 2013, the average price of a home sold was $159,461, that's up from $155,955 in 2012.
In 2011, the average price of a home sold in January was $166,369, and that price had been on the decline for several years.
The number of units sold has gradually been increasing.
In January 2011, 187 units sold in the region, compared to 208 in January 2012, and 238 in January 2013.
The total volume cost has been on the rise as well, going from $31.1 million in January 2011 to $37.9 million in January 2013.
Betty Kingery, owner of Mountain to Lake Realty in Rocky Mount and president of the Roanoke Valley Association of Realtors, said the trend is positive.
"I think we have hit the bottom in this region and in Franklin County," she said. "I think we have leveled off and are now heading back up."
Kingery said inquiries have picked up.
"Realtors have been very busy with activities," she said. "We will stabilize. It may not be blue skies yet, but the skies are clearing."
Part of the reason for the positive trend, she said, is that this continues to be a historically good time to purchase a home with very low interest rates.
Last year, saw the housing affordability index at a record high. That index is based on buying power, which includes the median home price and mortgage interest rates.
Although mortgage interest rates have seen slight increases, it's still a buyers' market, she said.
"Interest rates have not gone up too much to take advantage of that buying power," she said.
That may be one of the reasons January 2013 was a good month in the real estate market in the region.
"We had the highest number of pending sales in January since January 2007," she said, "and we had the highest number of homes sold in January since January 2008. We are definitely going back up."
Another positive trend, she said, is that the number of houses sold under foreclosure in the region is also dropping, from about 30 percent of homes sold to 26 percent.
However, she said, there are still obstacles to overcome and the Dodd-Frank Act, which was signed into law in 2010 as way to avoid another housing crisis, has had many "unintended consequences" that can make purchasing a home cumbersome.
"It is more challenging to get a loan with Dodd-Frank," she said. "There are so many documents that are required. They are looking for anything."
That's not the local lenders' fault, she said, it's just that the stricter regulations have created a lot of steps to take and those steps change often.
But with patience, the process does work.
Kingery said having a good credit score is crucial for obtaining a mortgage loan, as well as a lower interest rate. Credit scores should be at least 710 to 720, she said, and loans may require a 20-percent down payment.
The best thing to do for anyone considering purchasing a house is to see a lender first, she said. Lenders should be seen as partners, and they can take potential buyers through the process.
"Find your lender first," Kingery said. "Follow their path. Keep records. Each person is different and has different needs."
Financial planners can be of help as well.
"With some advice from an expert, people who may not be ready to buy now can be ready in four to six months," she said.
Solid advice usually includes not taking on any new debt, avoiding applying for or closing any accounts, and trying to set aside some cash.
Qualifying for a loan usually depends on the price of a house, the interest rate and family income, she said.
For those seeking a Federal Housing Administration (FHA) loan, Kingery said acting soon will pay off.
"The major thing is your mortgage insurance will be for the life of the FHA loan (starting April 1), rather than the loan value when it goes to the 80 percent mark."
That basically means, she said, the cost of mortgage insurance will double, possibly adding another $100 a month to the mortgage.
But with all of the turmoil in the housing market, Kingery said it remains a buyers' market.
"I think that when we look back at housing affordability, 2013 will be a good year," she said. "We are still going through historic mortgage interest rate lows and, with a good credit score, it's really a great time to buy."
In her position as president of the association, Kingery has met Realtors from around the state and country.
"We see the positive trends everywhere," she said. "We're seeing multiple offers and a lower inventory in other areas and other states. It all trickles down."
Selling a house is often all about pricing, and the average time it now takes to sell a house is nine months, Kingery added.