Warren County and Front Royal generally follow closely to the trends in Prince William County concerning the housing market. October was one of the worst months overall in many months for the real estate markets. There were several factors contributing to this, not the least was the impending mid-term congressional elections. October 2009 showed insignificant change from October 2008, but the numbers for October 2010 were way down from last year. What is causing the decline in sales now? Some buyers believe that the prices have not hit bottom yet and will continue to drop. Statistics show that they may be correct. Total revenue was down 29% from last October and more than 40% from September of this year. The average sales price has dropped by 19% but the days on the market also dropped by 36%. What this points out is that investors are seeking out properties at discount prices to fix up and flip. The listing inventory is up from 483 active listings a year ago to 520 this year. New contracts were down slightly this year leaving more inventory available on the market.
New Listings 93
Closed Sales 33
Average sales price $151,909
Average DOM 113
Total Inventory 520
Another factor keeping purchasers from making that buying decision is the pending discussion in Congress regarding eliminating the mortgage interest deduction. While this would be detrimental in many regards, those of you that remember the Tax Reform Act of 1986 recall that interest deduction for automobiles was eliminated. Later the interest deduction for credit card debt was eliminated. Many thought it would ruin the auto industry and have negative impact on credit spending. Look how that has played out nearly 25 years later. The winter months will probably continue to be sluggish but our region is actually recovering better than most areas of the country. Unemployment rates are much lower here and housing growth rate is #1 in the country nearly 50% better than the second best. Interest rates have started to climb up. Now really is the time to be thinking about a real estate investment. The market always improves and it certainly will again.
Market data and commentary provided by Charlie Carroll, Managing Broker, Avery-Hess, Realtors.
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