Despite the report that home mortgage applications were down 11 percent last month nationally, the housing market in and around Falls Church is now in boom mode, a veteran Falls Church-based real estate agent and her now-active real estate business partner told the News-Press in an interview this week.
With “pent-up demand” leading to prospective home buyers bidding against one another to drive offers above asked-for prices, these realtors think the outlook is bright for a widespread rebound of residential real estate values in Falls Church. That would be music to the ears of City officials who are laboring under the recent years’ steep decline in values and the resultant tax revenue losses.
Even more poignant are the observations of Falls Church-based agent ReMax-affiliated Leslie Hutchison, who has been in the business for 25 years, and Stacy Hennessey is the degree to which prospective home buyers are expressing a passion for locating within the Falls Church City limits, because of the reputation of the school system.
“I met with one couple moving here from Indonesia, and they made it clear they wanted their sons to go to (Falls Church’s) George Mason High School,” Hennessey said. But that is far from the only case the two have encountered.
“Falls Church has the special appeal of combining the reputation of the schools with its ‘Mayberry’ atmosphere while being only 10 minutes from Washington, D.C.,” Hutchison remarked.
She said the current eight percent first-time home buyer federal tax credit has a lot to do with the current buying frenzy, especially for homes priced under $600,000. That tax credit is due to expire by April 30, but she doesn’t think that will slow demand.
“It’s all about a pent-up market,” she said. “Homes are no longer being sold below their market value or asking price.”
While it is a “boom” for homes priced below $600,000, it has returned to a normal market for the pricier homes, as well, she said. The phenomenon is occurring throughout the Northern Virginia region.
But in addition to the tax credit, there are plenty of good deals encouraging home sales now. While good credit is much more of a factor than during the sub-prime run-up, mortgage interest rates remain under five percent and many mortgages are up to 90 percent of value, meaning they require only a ten percent down payment.
In addition, mortgages qualified by the Federal Housing Administration (FHA) require only a 3.5 percent down payment, and those qualified by the Veterans Administration (VA) are zero percent down.
On top of this is the lesser-known fact that the federal government also offers a 6.5 percent tax credit for home buyers who are trading in their existing home for a new one. That tax credit, and the first time buyers credit, will apply only to deals that come under contract before April 30, and closed within three months after that.
Hennessey also noted that the prospect of higher interest rates down the road is also driving a boom in the market now, and added that the rental market in the area is completely sold out. She said that the expiration of the federal tax credits program should not slow the frenzied level of home buying activity that is now underway.
“There’s a lot of arm wrestling now going on among prospective buyers bidding up the value of the homes they want,” Hutchison said, adding that real estate speculators began picking up bargains on the market months ago.