HARDING REPORT – AUGUST 2005

*** News from Jefferson County WV Property Market ***

Each month the Harding Report includes the latest news and information from the Jefferson County, West Virginia property market. This is a free service compiled by Thomas Harding, a licensed real estate agent with Greg Didden Associates in Shepherdstown, West Virginia. 

 For additional local information or any other property enquiry contact:

Thomas Harding

www.tharding.com

Thomas@THarding.com

304 671 7292 (cell-phone)

304 876 6400 (office)

 

 

 

 

CONTENTS

 

  1. The Here and Now
  2. Jefferson and Berkeley County Market News
  3. Laundry Room Goes Upstairs
  4. Ten Things You Need to  Know About Mold
  5. Planning News
  6. Mr Housing Bubble T-Shirt  Indicates Market Confusion
  7. Upcoming Events

 

 

HARDING REPORT – AUGUST 2005

 

1.      The Here and Now

 

The market is slowing down. At least for now (see Market News below).  

 

Of course it is summer time, and of course the living is easy, and that seems to have impacted the crazy wild run we have been on for some time. Maybe the wild ride will start back up again in the autumn.  Perhaps when buyers come back from their sunny vacations and schools starts once again in earnest, things will warm up.  But with interest rates back where they were in 2001 when this housing boom started in full force, the market may well indeed begin to flatten out…and there again it may not! Quien sabe as they say.

 

 

2.      Jefferson County Market News – The score for July 2005 is 6 out of 10

 

Whoa… things are slowing down folks.  This month’s growth month on month compared to 2004 is considerably reduced from last month’s heady heights of 87% to this month’s growth of 10%. Properties are selling fairly quickly, they last on average only 44 days on the market before a contract is agreed. Equally important, properties are selling for over 97% of the listing price on average.

 

However, the big news, is that the average sale price in July 2005 ($292,689) was LOWER than the average sale price in June 2005 (301,736). Could this be the beginning of the BIG SLOW DOWN everyone has predicted….?

 

 

  2005

  2004

  % Change

Total Sold Dollar Volume:

$ 30,439,699

$ 28,590,200

6.47 %

Average Sold Price:

$ 292,689

$ 264,724

10.56 %

Median Sold Price:

$ 269,450

$ 232,900

15.69 %

Total Units Sold:

104

108

-3.70 %

Average Days on Market:

44

56

-21.43 %

Average List Price for Solds:

$ 299,776

$ 273,601

9.57 %

Avg Sale Price as a percentage of Avg List Price:

97.64 %

96.76 %

 

 

 

So is this the first sign that the property market bubble has burst? I don’t think so. Why? Because the numbers don’t prove anything yet. For all you amateur statisticians,  I’ve put together a graph that maps the trends in average sold price over the past 24 months. It makes for interesting reading. The graph shows you well how far we come over the past two years. It also shows that even though there is a general trend upwards, there can be temporary dips along the way. In other words, the bubble may well not have burst yet!

 

 

 

 

 

For those also interested in Berkeley County, we can see we have a different trend taking place. Rapid growth is still going on, though slower than last month, and purchase price as a percentage of list price is an incredible 99%. Berkeley County is currently a hotter market than Jefferson County.  

 

 

  2005

  2004

  % Change

Total Sold Dollar Volume:

$ 44,858,942

$ 29,895,783

50.05 %

Average Sold Price:

$ 225,422

$ 183,410

22.91 %

Median Sold Price:

$ 197,000

$ 165,000

19.39 %

Total Units Sold:

199

163

22.09 %

Average Days on Market:

40

50

-20.00 %

Average List Price for Solds:

$ 227,297

$ 187,006

21.55 %

Avg Sale Price as a percentage of Avg List Price:

99.18 %

98.08 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.   Laundry Rooms Grow, Go Upstairs

In another revelation about how home owners want to better manage the space in their home, 95 percent of those surveyed in a National Association of Homebuilders (NAHB) consumer preference survey said they desired a separate laundry room in their home.

That's a laundry "room" -- not just some cramped corner in the basement or nook off the kitchen.

Homeowners want an expanded, multi-functional work area for more than just washing clothes. Built-in ironing boards and solid-surface counter spaces for folding and sewing are popular, as are built-in storage cabinets or closets. These are used to both store detergent and other cleaning supplies as well as to conceal appliances and even temporarily store washed and dried items.

Among the trend is the desire for a more convenient upstairs laundry room. Home Magazine says 61 percent of laundry rooms are being built on upper levels rather than first floors or basements.

"The older the person the more likely they are looking for something like the old service porch (on the same level where they spend most of their time), but more and more laundries are upstairs so you don't have to lug the laundry downstairs," said Dena Mentis, new home expert from Novato, CA and co-author of the "Homebuyer's Kit" (Dearborn Trade, $15.95).

"The laundry area is similar to kitchens in the use of solid surface counter tops, high-end fixtures, strong lighting and lots of cabinets, some of which hide washers and dryers, and other built-ins," said Harold Carter of J.H. Carter Builder Inc. in Raleigh, NC.

The laundry room's rejuvenation is all part of a growing trend among households to have more control over their lives by tailoring spaces to fit human forms and habits. That's especially necessary in the smaller urban, higher-density homes that don't sprawl as much as suburban abodes.

Finally, laundry rooms remain relatively smaller than other rooms where you spend more time. That means you can release your inner interior designer and go all out with colors, textures and decor elements typically held back in larger rooms.

[Realty Times August 12, 2005]

 

4.      Ten Things You Should Know About Mold

  1. Potential health effects and symptoms associated with mold exposures include allergic reactions, asthma, and other respiratory complaints.
  2. There is no practical way to eliminate all mold and mold spores in the indoor environment; the way to control indoor mold growth is to control moisture.
  3. If mold is a problem in your home or school, you must clean up the mold and eliminate sources of moisture.
  4. Fix the source of the water problem or leak to prevent mold growth.
  5. Reduce indoor humidity (to 30-60%) to decrease mold growth by:
    1. venting bathrooms, dryers, and other moisture-generating sources to the outside;
    2. using air conditioners and de-humidifiers;
    3. increasing ventilation;
    4. and using exhaust fans whenever cooking, dishwashing, and cleaning.
  1. Clean and dry any damp or wet building materials and furnishings within 24-48 hours to prevent mold growth.
  2. Clean mold off hard surfaces with water and detergent, and dry completely. Absorbent materials such as ceiling tiles, that are moldy, may need to be replaced.
  3. Prevent condensation: Reduce the potential for condensation on cold surfaces (i.e., windows, piping, exterior walls, roof, or floors) by adding insulation.
  4. In areas where there is a perpetual moisture problem, do not install carpeting (i.e., by drinking fountains, by classroom sinks, or on concrete floors with leaks or frequent condensation).
  5. Molds can be found almost anywhere; they can grow on virtually any substance, providing moisture is present. There are molds that can grow on wood, paper, carpet, and foods.

 

[Cesar Montelongo, National Association of Certified Home Inspectors]

 

 

5. Planning News

 

  • Planning Commissioners Bob Butler and Gary Poling were called upon to resign from their seats on the Berkeley County Planning Commission by Whiting’s Neck residents this month. The residents said that the two commissioners were members of the Eastern Panhandle Homebuilders Association of West Virginia, and thereby creates a conflict of interest. The residents also pointed out that Bob Butler working for Spring Hill LLC and Gary Poling for GAP Builders LLC, both firms are local building companies. This demand comes after a member of the Jefferson County Planning Commission was forced to resign after a similar conflict of interest was pointed out.  Butler said he has no intention of leaving “I’m there. I’m going to stay until something happens to make me leave” Butler said “I’m not going to leave just to make them happy.”

 

  • Shepherdstown has hired Ann Morgan,  former head of planning for Berkeley County to rewrite Shepherdstown’s sub-division rules.  These new rules are to be present to town council August 29th at 7pm at the Entler Hotel. According to observers, these new rules are being written in response to the request to sub-divide the 20 acres of land on E German Street opposite the day care center into sixty plus houses

 

  • About 125 people have organized under the name PASSE to protest the $12.7 million sewer extension project near Berkley Springs. “These people are agitated and emotional and they are strongly resisting the project” said Christopher Luttrell, the group’s lawyer based in Shepherdstown

 

[Martinsburg Journal, 11&12 August 2005]

 

 

6. Mr Housing Bubble T-Shirt indicates market confusion

Constant talk about a housing bubble could single-handedly cause housing prices to moderate or dip, as the financial press attempts to worry the nation into shifting its money from real estate back into stocks.

The news media is frothy with bubble stories. Using "housing bubble" as the search, Google returns over 918,000 stories, many of which hype a coming crash in real estate prices. One story suggested that the government needs to rein in the housing market by overturning the Taxpayer Relief Act of 1997, which favors homeowners into keeping millions in capital gains which could be applied to reduce the huge government deficit.

Yet the media fails to notice inconsistencies. In February 2004 speech, Fed Chief Alan Greenspan suggested that fixed-rate mortgages were expensive, and that homebuyers should consider adjustable rate mortgages to reduce housing costs.

"Recent research within the Federal Reserve suggests that many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade, though this would not have been the case, of course, had interest rates trended sharply upward," said Greenspan. "American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage. To the degree that households are driven by fears of payment shocks but are willing to manage their own interest rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home."

What made this advice so strange at the time is that fixed rate mortgages were at near 30-year lows, too near in yield spread of adjustable rate mortgages to be worth the risk to all but a few of the most overzealous homebuyers. The economy was poised to turn upward, which would take interest rates up with it, putting homebuyers who took Greenspan's suggestion at risk of paying more for their mortgages than they might have if they'd gotten a fixed rate to begin with.

In his July 2005 testimony before Congress, Greenspan has apparently forgotten his earlier observation that fixed-rate mortgages are a tad expensive. "The apparent froth in housing markets appears to have interacted with evolving practices in mortgage markets," he says. "The increase in the prevalence of interest-only loans and the introduction of more-exotic forms of adjustable-rate mortgages are developments of particular concern."

Should we really be surprised? These products of concern expand the yield spread between fixed rate and adjustable rate loans enough to make it worth the risk to ride out rising rates.

If people can grab some real estate, make more money than they ever dreamed of in the stock market with less risk, is it any wonder housing has been on an 8-year streak? And why would consumers who are having home-buying made so easy for them assume that they are making a mistake?

Luckily for them, there are plenty of pundits out there who are trying to slow what Greenspan and company didn't accomplish -- a housing market that has absorbed one-third of the nation's investment wealth.

The housing bubble is so pervasive that new products released by T-ShirtHumor.com make fun of the phrase. More ominous, T-ShirtHumor.com believes it is doing a public service with its "funny but serious warning to investors on the future of the real estate market."

The "Mr. Hou$ing Bubble" shirts, mugs, caps and other products feature a parody of the popular bath powder with a "FREE Balloon Mortgage Inside!" while Mr. Bubble himself warns, "If I pop, you're screwed." The disclaimer at the bottom of the box reads, "Not affiliated with Mr. Internet Bubble."

"America is financing and refinancing their homes with all kinds of funky new mortgage products while real estate prices go through the roof," said John Baynham, T-ShirtHumor.com founding partner and the artist behind all the site's designs. "If and when this bubble pops, a lot of people are going to take a bath and they're going to need an affordable shirt to put on afterwards."

Mr. Hou$ing Bubble may get a lot of washings before it wears out.

 

 

7. Upcoming Events

August

  • August 19-21, 13th Annual African American Cultural & Heritage Festival, Sponsored by Jefferson County NAACP. For information call (304) 725-9610.
  • August 21-27, 53rd Annual Jefferson County Fair, Jefferson County Fairgrounds. For more information call (304) 724-1411.

 

September

  • September 9-11, Upper Potomac Fall Dulcimer Festival, Shepherd University Frank Center. For information call (304) 263-2531.
  • September 10, Dulcimer Festival Showcase Concert, Shepherd University Frank Center. For information call (304) 263-2531.
  • September 17, Murder Mystery Party, Hilltop House Hotel, Harpers Ferry. For information call (304) 535-2132.
  • September 18, Octoberfest, Bavarian Inn, Shepherdstown. For more information call (304) 876-2551.
  • September 23-25, 30th Annual Fall Mountain Heritage Arts & Crafts Festival, Sponsored by Jefferson County Chamber of Commerce. For more information call (304) 725-2055 or (800) 624-0577.
  • Sept. 24-25, Spirit of America over Martinsburg Airshow, Martinsburg. For more information visit www.martinsburgairshow.com
  • September 24-25, WERA National Motorcycle Roadracing, Summit Point Raceway. For more information call (304) 725-8444

 [www.jeffersoncounty.com]

 

 

 

 

 

 

 

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