Message To Our Clients

November 16, 2005

Friends and clients,
This is the first of periodic market updates that we will provide you in this time of market uncertainty.

Attached are market statistics for Fairfax (fx), Loudoun (lo) and Prince William (pw) Counties. You probably heard us talk about the sluggishness as well as reading about it in the local news. It's real. There are more listings available to buyers than any time in recent history. If you don't follow the frequent articles in our blog, you should. We probably do more market research than anyone else and give our opinions in a straightforward, unbiased manner.

What this means:

• Be realistic. Buyers are now buying the best for their money. Either show better for the price or reduce the price. Investing in paint, new carpet and staging when necessary yields a big return on investment. Also, Location, Location, Location are always the top 3 real estate priorities.
• Be flexible. Buyers are being more selective and expect more from sellers in price negotiations and perhaps subsidies for closing costs.
• Be logical: This is market dynamics. What your neighbor sold for last spring or last year has nothing to do with market value today.
• Be professional: Generally, work on your home done by a professional will be worth more in the long run. Buyers will be picky.
• Be patient. We can't know what the future may bring but we do know this:
  • The Washington Metro area economy is among the strongest in the nation. Jobs are being created at a rapid pace.
  • People moving to the area for jobs will need housing.
  • The market was over heated the last few years and it is now moderating to "normal", whatever normal is.
  • First time and "move up" buyers are looking further away from the Beltway because prices tend to be lower and quality of life better.
  • 25% of the homes sold in the last two years were by "investors" buying and flipping. Those that didn't flip soon enough are now stuck. That inventory needs to dissipate.
  • And, all the "real estate bubble" talk is feeding on itself.

Anecdotal evidence:

• Public open houses are drawing few attendees (discussions with other agents).
• A nice property in Waterford priced below appraised value has had 3 showings in 6 weeks (a good friend of ours also in the business).
• According to our broker, town homes have been hit the hardest. These are typically sold to first time buyers who are hesitant to buy into uncertainty.
• A reliable and objective appraiser we know bought a new construction, "to be built" home in an upscale community in and around Leesburg, VA several months ago that the builder is now selling the for tens of thousands less. He can't get out now and he wishes he could.
• Builders and sellers are offering more incentives to buyers and "bonuses" to buyer agents for contracts. Builders are negotiating again after several years of naming their own terms. (By the way, we do NOT advocate agent bonuses. It creates a potential conflict of interest. If we recommend incentives, it is always to the buyer.)

Our marketing:

• Our internet marketing is second to none. We showcase all listings on realtor.com, homesdatabase.com, Yahoo, MSN, washingtonpost.com among others.
• Every property has a VisualTour (75% of buyers look at homes with Visual Tours or those with more than 1 picture first.) Our VisualTours are among the best in the industry. We average over 300 total views per week for all our listed properties. Our properties get exposure.
• Our website and blog get over 1000 unique visitors per month and is growing rapidly.
• If you do a Google Blog search for Virginia Real Estate or Northern Virginia Real Estate, we come up at the very top of the first page. This means exposure for your property.
• Our properties are posted to "craigslist" and soon on Google Base (beta in test now) as well as Google and Yahoo maps.
• We employ more technology than 99.9% of all other agents. To make us more efficient and to get our clients the maximum property exposure.
• We advertise for our own self promotion and at our own expense, primarily in Leesburg Today, Loudoun Business and Elan magazine.
• Our ads stand out above all others in professionalism, size and white (or blank) space.
• Not every property is advertised every week.
• We advertise primarily to drive buyers and prospective clients to our Websites and to your properties.
• When we get buyer calls, they are almost always from something they see on the internet as opposed to print (there are a few exceptions, we have received a few calls from our ads in Elan).
• We will also run ads on specialty Websites when appropriate.
• All of our materials are created toward the discriminating eye of the buyer and their agent.
• We rarely do public open houses. The return on investment is minuscule. That is why we can offer our services at a more reasonable rate than anyone else. You don't have to pay for activity that does not work.

In summary, the heady times are no longer with us. Normal used to be a few days to a couple of weeks on the market to get a ratified contract. Normal is now an average of 45 to 60 days. More for some properties. Pam and I never quit talking and brainstorming on strategies that will help you sell.

We hope this has been helpful. We need to temper our expectations to the reality of the marketplace. We will send the attached reports as they are available. Please call or email if you have questions. Looking forward to the market "upside".

Our very best regards,
Merv and Pam

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