Richmond, The Perfect Time to Buy a Home.

Is it a good time to buy a home? Is the value of my house going to drop 10, 15, 25 or even 40%? Should I sell my house and move into a rental before the housing market collapses? Are we in a recession? Are mortgage rates going to continue to drop?
These are a few of the questions asked of me on a daily basis these days.

The omnipresent negative media hype has even had me start to wonder about these questions. There is validity to theory that the media has created a self-fulfilling prophecy of declining home values throughout the nation. While other loan officers were fearful for their jobs in the late summer, while the credit crunch was unfolding, I was experiencing very positive feelings, my phone was ringing with calls of concern from past customers and referral sources, truly concerned about my personal situation, this made me realize that what I do and the advise I give does make a positive difference in the lives of those I serve.

The calls are continuing but the subject matter includes request for advice on whether to buy, refinance, and sell, move-up…. I am fortunate to be a mortgage planner practicing in the Richmond market and not in Ft. Lauderdale, San Diego, Detroit, Las Vegas or Fairfax County. The fundamentals of the Richmond area housing market remain strong. Sure homes aren’t selling at the hyper-pace of three years ago, they are selling at a more normalized pace, or as we prefer in Richmond a more civilized pace. Richmond's 2007 unemployment rate averaged out monthly was shy of 3.2%, well below the national average of over 4.5% (when I took macro-economics in college I was taught that a 5% unemployment was equivalent to full employment, due to normal transitions). This is important, when people have jobs and expect continued employment they buy houses. Demonstration of the strength of the Richmond housing market is in most instances anyone who purchased a home two years ago could sell their home for a sizable profit today. Yes there are a few pocket of exceptions, most of which are in neighborhoods where builders have standing unsold inventory of homes and developed building sites.

It is a great time to buy a home. It may not be the best time for someone who has owned a home for less than a year to sell and get out of the market. The media hype and a slower calmer pace of sales provides an outstanding opportunity to buy. Whether buying a first home, investment (rental) property or moving up to a more expensive house, it is time to take action. Mortgage rates remain very low. Sellers are making sales concessions, such as paying all purchaser's closing costs or paying for upgrades and cosmetic changes to homes. The long-term outlook for the Richmond economy is very positive. The current deals often mean it is wise to use bridge financing, to bridge the gap between the sale of a current home to close on a purchase of a new one.

Fannie Mae and Freddie Mac, the private Federally chartered entities that guarantee the majority of mortgage debt in the US have not nor at this point intend to classify the Richmond market as one with declining home values, making great loan options including 100% financing still available to many home buyers

Conversations of people discussing moving and making offers to purchase a new home are now being overheard all over the Richmond area. Recent actions by the Fed have translated to people looking at refinancing and in many cases this has resulted in folks deciding not to refinance but to move-up to a more expensive home. If this activity continues the days of attractive seller concessions will disappear. Builders have slowed down new home starts and are finally clearing out inventories. All this means that Richmond home prices are going to start rising at a faster pace and now is a good time to buy.

How does a seller make sure a home sells quickly? Time and time again hind site shows that a quick sale (not a fire sale) is better for a seller than a long dragged out marketing and listing period. The first piece of advice is to seek expert advice, talk to an experienced reputable Realtor® and loan officer. Do not go into the market pricing your home high and then plan to cut the price a few weeks if the property goes unsold, this looks desperate and typically will not attract additional quality prospects. Talk to both your Realtor® and mortgage lender to see what sales price will still make the numbers work for you on that new purchase. Put some effort in making sure the house is in tiptop shape. Enhance the curb appeal with landscaping; power washing and fresh paint on widows, doors and shutters, De-clutter the interior of the house, especially floors in closets and other surface area. Make sure everything is clean. Additionally it is always a good idea to have a per-sale home inspection and appraisal done; this shows good value and eliminates uncertainties for prospective buyers. Make sure your real estate agent has a good sound marketing plan, extending beyond putting your home in MLS (Multiple Listing Service).

A home is more than a financial investment. While owning almost always makes the best financial sense, the American Dream of home ownership also provides a sense of being a part of a community, pride, stability and security.

In summary it is an ideal time to buy a home in the Richmond market. To maximize the opportunities this market has to offer it is important to seek the expertise of good reliable real estate agent and mortgage professional.

About the author: Paul Cantor is President of TrustMor Mortgage Company in Geln Allen, VA. He is a frequent speaker at local real estate financing forums. He may be reached at (804) 433-1510 or on the web at www.PaulCantor.com.