One Brick Short

The headline asks a good question: have we a buyer’s market?

Sure. Right now is a great time to buy a house. There are many houses—2,600—up for sale in Central Virginia, about 100 more than last May, and 1,400 more than the market’s peak in May 2005. Sales have dropped 35 percent in a year and median sale prices—the same number above as below—is $275,000. That’s about a dozen grand less than last year.

So we’ve got more houses and they’re cheaper, that’s truly a buyer’s market if, as the car dealers say when touting 0-percent financing, you’re a “well-qualified” buyer. See, that’s what got the housing boom going in the first place, was that the banks were willing to write 30-year, fixed-rate mortgages to folks with less than 10 percent down (a median down payment in today’s market of about $27,000). Banks were eager to write a mortgage and sell the paper not once, not twice but three times.

Got a few bucks? Got a job? Need a house? Everybody owns!

Betcha that’s not the case, now. Betcha some poor sucker with a series of cross-country moves and a divorce to deplete all of his savings who sells his Harley and works 28-days straight for five months in a row and has to borrow cash from his 401-K couldn’t get a paper.

Let’s turn it around. Charlottesville Realtor Jim Duncan, who crunched the numbers as part of his monthly analysis of market trends, said houses will continue to sell if they are priced appropriately. Mr. Duncan writes a blog at http://www.realcentralva.com. and seems to know what he’s talking about. He’ll even tell you that “price appropriately” could mean selling the house for less than the mortgage that’s already on it.

Yes, that great real estate investment you made four years ago may force you into bankruptcy if you keep or if you sell it.

Dave Phillips, who heads up the Charlottesville Area Association of Realtors, said it will take up to a year for the supply of houses to come down to a level at which the number of people buying and selling is balanced. Realtors, by their nature, are positive spinning people. As a reporter, I tend to spin backward and think he’s being extremely optimistic, but he’s the professional, not me.

Phillips said buyers are afraid of being stuck with a house and no way to sell it. Sounds like a good fear to me. He also said that now’s a great time for first-time buyers who don’t need to sell a house, to buy a house.

That’s true, if you’re confident of your job security, have some money in the bank and a good credit rating and don’t expect to have to sell it and move in a couple of years.

Will both of you who fit that description please raise your hands? There’s some folks who want to talk to you about a house.