Category Archives: Market Conditions

Why does my attorney not want a Cashiers Check?

We’ve had a recent situation which has brought this to our attention:

 Have you noticed, or been told, that attorneys are less likely to accept cashiers checks, or require that they be delivered 24 to 48 hours in advance of closing? In essence, it has to do with fraud.

 As you know, we are seeing a lot of fraudulent occurrences in real estate these days. Apparently there is the opportunity for a person to withdraw a cashiers check within a certain period of time once it has been issued. In documented cases, people are showing up to settlement with a cashiers check, going through closing, and then withdrawing the check before it can be deposited and approved for payment.

 As a result, attorneys are being advised that they should avoid this type of payment, or require it in advance of settlement, in order to avoid these possible situations. I was also not aware of this change in precedent, but this is what is taking place at the moment. Note that all office policies may be the same.

 Our business is extremely susceptible to fraud because of the high dollar value being transferred. The people committing fraud are exceptionally skilled at it. It is reassuring to know that our attorneys are on top of the latest trends, keeping all of us safer from this abuse.

 Please consider sharing this with your buyer-client early in the contract process.  I trust this will help them understand the situation and be a little more patient with current trends. These are difficult times for all of us; fortunately our attorneys are being cautious in order to protect everyone involved. Something we can all appreciate.

 Please contact me with any questions


Low Inventory and Price Increases

Regarding Inventory and increasing home prices, RISMedia reported today:

“Home Prices Charge Upward, Stoked by Strong Sales Pace
RISMEDIA, Tuesday, May 16, 2017— Home prices continue to escalate, charging upward 6.9 percent in the first quarter of 2017, according to the latest quarterly report by the National Association of REALTORS® (NAR). The increase, stoked by the strongest quarterly sales pace in a decade, marks three straight quarters of growth.

“Prospective buyers poured into the market to start the year, and while their increased presence led to a boost in sales, new listings failed to keep up and hovered around record lows all quarter,” says Lawrence Yun, chief economist at NAR. “Those able to successfully buy most likely had to outbid others—especially for those in the starter home market—which, in turn, quickened price growth to the fastest quarterly pace in almost two years.””

There are consumer concerns about housing affordability and a quickening of sales prices reminiscent of the market prior to the crash in ’08. The biggest difference to note in the most desirable areas of RVA is that in multiple bid situations, cash and no appraisals are winning the day. Even if you are a qualified purchaser, and are willing to go well over sales price, it will be tough to compete in order to get the home you seek. At least in certain areas of town.

Should we be concerned that this situation will lead to another crash? Probably not; our current situation has two things working in our favor. There is a sever lack of inventory, and those buyers who may be overpaying for these homes are paying cash. There is no financial exposure for the lending institutions.

“Yun says, “High demand is poised to continue heading into the summer as long as job gains continue; however, many metro areas need to see a significant rise in new and existing inventory to meet this demand and cool down price growth.””

It is going to take a little time before home inventory catches up with demand. While this condition will likely continue to inflate sales prices, making competition stiff, it may quite possibly retard the market in the mid-range move up buyers. They may be less likely to sell because they don’t know where they will be going. These buyers may have to adjust their expectations if they are forced to move due to job relocation. They may be forced to do a two stage move, with a rental in the interim.

This is an unusual market, but not unanticipated. It’s going to be exciting to watch it unfold in the coming months.

Is Zillow finally being called on the carpet?

There is an interesting article in the Richmond Times Dispatch Metro Section today (5/15/17), “Zillow under scrutiny for ‘Zestimate’ system”, by Kenneth R. Harney. He notes a law suit filed in an Illinois court that claims Zillow’s Zestimate system has seriously undervalued a woman’s home, preventing her from selling it for what it’s worth. The article suggests that Zillow is not only responsible for stigmatizing her property, but furthermore begs the question of how can Zillow perform appraisals without a license? They are also making the value available to the public without owner consent.

Well, “it’s about time they got called on it”, said Pat Turner, a Richmond real estate appraiser quoted in the article. If, as the article mentions, Zillow’s information meets the definition of an “appraisal”, then why shouldn’t they be licensed to perform such tasks? Why shouldn’t they be held to the same high standards as the rest of those who are licensed professionals when performing these works? Why shouldn’t they be held accountable for their representation of a property’s value in the same stringent manner as are all licensed real estate appraisers? The penalty for providing inaccurate information and property value for a licensed appraiser is severe – Why shouldn’t Zillow have the same level of responsibility and accountability when posting information that the public so willingly seems to rely on when self-evaluating a home?

Is it because the information provided by Zillow is quick, easy, and free? Well then, one should not be surprised to get that they pay for. In the mean time, home owners who have a property for sale, like this woman in the article, may not be pleased to know that they, in many instances, may be penalized for the inaccurate information that Zillow is offering to consumers. Zillow is notoriously off-the-mark when it comes to appraised value, or the market value that can be offered by a licensed Realtor, and they freely admit it.

Zillow makes an incredible amount of money, hundreds of millions of dollars per year, by offering questionable housing valuations to the public via their “Zestimates”. Somehow, the consumer doesn’t seem to mind; at least until now. It will be worth watching to see if the courts take this action seriously. By all accounts, it seems to me as an educated consumer, that they should. The financial stakes are simply too high to be ignored. But beware; there are other AVM systems out there that will then also be under scrutiny, including those used by the government. It may be too late to put this animal back in its box!

Consumer Confidence in September

Home family sold

Another Optimistic Month

Consumer Confidence in September: Another Optimistic Month
By Jing Fu
RISMEDIA, Tuesday, October 04, 2016— The Consumer Confidence Index, reported by the Conference Board, rose in September. Compared with last month, consumers were more optimistic about both the current situation and the near-term outlook.

The Consumer Confidence Index rose to 104.1, from 101.8 in August. The present situation index rose to 128.5, from 125.3, and the expectations index increased to 87.8, from 86.1.

Consumers’ assessments of current business conditions were mixed. Assessments shifted from both “good” and “bad” to “normal.” The share of respondents rating business conditions “normal” rose by 4.9 percentage points from 51.5 percent to 56.4 percent. A net decline of 2.9 percentage points in assessments of “good” combined with a 2.0 percentage point net decline in assessments of “bad” for the total.

Similar to consumers’ assessments of current business conditions, expectations of business conditions over the next six months were mixed. The share of respondents expecting future business conditions to be the same rose from 71.0 percent to 73.3 percent. About half of the increase was the result of a net decline in respondents expecting future business conditions to be worse—an upgrade—while the rest was the result of a net decline in respondents expecting future business conditions to be better—a downgrade.

Consumers’ assessments of current employment conditions improved. The share of respondents reporting that jobs were “hard to get” dropped to 21.6 percent, from 22.8 percent. Most of the 1.2 percentage point decline (1.1 percentage point) upgraded to “jobs plentiful.” Also, consumers’ expectations of employment over the next six months were more upbeat than in August. The share of respondents expecting “more jobs” rose to 15.1 percent, from 14.4 percent. Most of the 0.7 percentage point increase (0.5 percentage point) shifted from “fewer jobs,” while the rest shifted from “same jobs.”

The Conference Board also reports the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home declined to 5.1 percent, from 6.9 percent. The share of respondents planning to buy a newly constructed home and an existing home were 0.6 percent and 3.5 percent, respectively; the share of respondents who were “uncertain” whether they would buy a newly constructed or an existing home was 1.0 percent.

Despite the monthly volatility, the trend in the share of respondents planning to buy a home within six months has been steadily upward since the end of the recession.

This post was originally published on the National Association of Home Builders’ (NAHB) blog, Eye on Housing.

Rates Hold Steady for Now

Rates Hold Steady for Now, Fed Action Points to Possible Hike in December  – not much of a surprise with elections coming up in November. Hang on, however, change is a-coming!

Rates Hold Steady for Now, Fed Action Points to Possible Hike in December
By Suzanne De Vita
RISMEDIA, Thursday, September 22, 2016— The Federal Reserve kept the benchmark rate unchanged on Wednesday, in a divided vote that alludes to the possibility of a hike before the end of the year.

“The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives,” the Federal Open Market Committee (FOMC) released in statement. “The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.”

“Our decision does not reflect a lack of confidence in the economy,” Fed Chair Janet Yellen said in a press conference, later adding, “We’re generally pleased with how the U.S. economy is doing.”

Today’s action was largely expected by analysts as policymakers stood fast this summer, despite initially forecasting four hikes this year. The federal funds rate informs the trajectory of mortgage rates, which remain at historic lows.

Chances of a hike improved after Yellen made note of the economy’s supportive environment during a speech in August, but softening indicators proved otherwise: the U.S. Bureau of Labor Statistics reported modest employment data this month, and housing starts came in less than anticipated in August, among other factors. Still, household wealth grew over $1 trillion in the second quarter of this year (with owner equity at its highest in a decade), and household spending has picked up significantly.

TransUnion researchers recently found some nine million credit-active consumers would experience “payment shock” if the federal funds rate rose 0.25 percent—the majority of all credit-active consumers, however, would see monthly payments increase a paltry $6.45.

The Fed last raised the key rate in December.

RISMedia welcomes your questions and comments. Send your e-mail to:

Latest HOME Survey

Affordability Concerns, Uncertainty about Down Payment Requirements Ensnaring Renters, Latest HOME Survey Shows

Affordability Concerns, Uncertainty about Down Payment Requirements Ensnaring Renters, Latest HOME Survey Shows
RISMEDIA, Friday, September 16, 2016— Lofty home-price growth and tight supply are leading to softening confidence among renters about whether it’s a good time to buy a home, according to the latest installment of the National Association of REALTORS® Housing Opportunities and Market Experience (HOME) survey. The survey also found that a misconception about how much of a down payment is needed to buy could be unnecessarily delaying some qualified young adults from entering the market.

In NAR’s third quarter HOME consumer survey, respondents were asked about their confidence in the U.S. economy and various questions about their housing expectations, including a series of questions related to down payments and the amount of money they believe they need to purchase a home.

Heading into the autumn months, the share of homeowners and renters who believe now is a good time to buy remains at a solid majority but has crept downward since the beginning of this year. Seventy-eight percent of homeowners (80 percent in June; 82 percent in March) and 60 percent of renters (62 percent in the previous two quarters) said it’s a good time to buy. In the inaugural HOME survey in December 2015, 68 percent of renters said it was a good time to buy.

Lawrence Yun, NAR chief economist, says it’s clear the ongoing run-up in home prices and severe inventory shortages in a large portion of the country are hitting consumer psyche – especially among renters. “This summer’s historically low mortgage rates injected some additional demand into the market, but the dearth of homes for sale continues to keep a lid on sales but not prices,” he said. “Given the stiff competition and limited homes available at the lower end of the market, it’s not surprising at all that those under the age of 34 and in the West are the least confident about it being a good time to buy.”

Adds Yun, “Very affordable mortgage rates and strong job gains among young adults should be translating to a higher rate of homeownership. It’s not, and as a result, sales to first-time buyers remain stuck below a third of all sales2.”

This quarter’s HOME survey also found that awareness of low-down-payment mortgage options was scarce across all ages, income brackets and education levels. Fewer than 20 percent in each group indicated that they need 10 percent or less to finance their home purchase. Those ages 65 and older (43 percent) and under the age of 35 (37 percent) were the most likely to believe that they need more than 20 percent.

“It’s possible some of the hesitation about buying right now among young adults is from them not realizing there  are mortgage financing options available that do not require a 20 percent down payment, which would be north of $100,000 in some expensive areas in the country,” says Yun. “In fact, most first-time buyers put down much less. In the 35 year history of NAR’s Profile of Home Buyers and Sellers – the longest-running survey series of national housing data – the average median down payment has been 5 percent for first-time buyers.”

With home prices and rents continuing to climb and make it difficult for many to save for a home purchase, one avenue for about a fifth (19 percent) of current homeowners was receiving down payment assistance from a parent or relative. Homeowners ages 34 and under were the most likely to say they received help from a parent or relative (34 percent), along with those living in the Northeast and in urban areas.

When it comes to giving aid to prospective buyers, 16 percent said they have helped a child or relative with their down payment. It’s no surprise that the older the respondent, the more likely they were to assist.

“Creditworthy prospective buyers should know that many lenders now offer safe, sustainable loans with as little as 3 percent down, and obtaining a mortgage isn’t as difficult as it was in the immediate years after the downturn,” says NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. “Every buyer is different. Before deciding how much to use on a down payment, buyers should carefully review their financial situation and make sure they still have enough money set aside after the home purchase for unexpected expenses and emergencies. A Realtor® will walk through what to consider based on what a buyer can comfortably afford.”

Feelings About Direction of U.S. Economy, Personal Financial Outlook Remain Unchanged

Following the same trend line since the inaugural HOME survey in December 2015, a little less than half of all households in the survey believe the economy is improving (48 percent). The younger the household the more optimistic they were about the economy’s future prospects. Meanwhile, nearly two-thirds of those living in rural areas (63 percent) and 61 percent of those over the age of 65 don’t believe the economy is improving.

The HOME survey’s monthly Personal Financial Outlook Index,3 showing respondents’ confidence that their financial situation will be better in six months, ticked up very slightly (to 58.6 in September) since June (57.7), but is up much more since last September, when stock market losses at the time temporarily caused more consumer angst (53.0).

Most Expect Prices to Hold Steady or Increase, Slightly More Think It’s a Good Time to Sell

More current homeowners (63 percent) believe it is a good time to sell compared to the second quarter of this year (61 percent). Respondents in the West continue to be the most likely to think now is a good time to sell, while also being the least likely to think now is a good time to buy.

Consistent with last quarter (93 percent), almost all of those surveyed (91 percent) believe that prices will stay the same or rise in their community in the next six months. Renters, respondents living in urban areas and those from the West are most likely to believe prices will go up in their communities.

For more information, visit

RISMedia welcomes your questions and comments. Send your e-mail to:

Inflation and Expectations

Consumers’ Inflation and Expectations Rise

Consumers’ Inflation and Expectations Rise
RISMEDIA, Tuesday, September 13, 2016— The August 2016 Survey of Consumer Expectations shows an increase in both short-term and medium-term inflation expectations. In particular, the median year-ahead inflation expectations reached its highest level of the year. Median expected household income growth also increased (for the third month in a row) to its highest level since May of 2015. Labor market expectations were mixed: Expectations about finding a job and earnings growth both improved, but the perceived probability of losing a job and expectations about the unemployment rate both increased slightly.

Median year-ahead inflation expectations rebounded from 2.5 percent in July to 2.8 percent in August, the highest measure of the year. Median inflation expectations at the three-year ahead horizon also increased, from 2.5 percent in July to 2.7 percent in August. This increase in both time-horizons was consistent across age, education and income groups.

Median one-year home price expectations remained steady at 3.3 percent. Median year-ahead gasoline price change expectations declined from 4.9 percent in July to 4.6 percent in August, their lowest level since January of this year. Expectations for changes in the price of food and rent both increased by 0.2 percentage points, to 4.8 percent and 5.7 percent respectively. The median expected change in the cost of medical care increased slightly by 0.1 percentage point to 9.3 percent. Expectations about changes in the price of a college education rose from 6.8 percent in July to 7.3 percent in August, the highest level since November of 2015.

Median year-ahead expected earnings growth rebounded in August, increasing to 2.4 percent from 2.2 percent in July. The increase was driven mostly by higher income and middle-aged (40 to 60) respondents. Median uncertainty about year-ahead earnings growth increased slightly, to a level not seen since January 2015.

The mean perceived probability of losing one’s job in the next 12 months increased slightly from 15.0 percent in July to 15.2 percent in August. The mean probability of leaving one’s job voluntarily in the next 12 months rose from 21.0 percent to 23.4 percent. Both increases were led by respondents older than 40 years, but the increase in leaving one’s job voluntarily was especially notable among lower-income respondents.

The mean perceived probability of finding a job (if one’s current job were lost) increased 0.2 percentage points from last month to 53.5 percent, approaching the average value observed over the past year.

The mean perceived probability that the unemployment rate will be higher one year from now increased from 37.5 percent to 39.5 percent, its highest value since March 2014.

Median expected household income growth continued to increase for the third month in a row, rising to 2.9 percent, up from 2.8 percent in July and 2.4 percent in May. This is the highest level recorded since May of 2015. The increase was driven by younger (under 40) and lower income and education respondents.

Median household spending growth expectations decreased to 3.3 percent from 3.8 percent in July, breaking the upward movement observed since March 2016. This decline was driven by respondents older than 40 and those with lower income.

Respondents were slightly more pessimistic about perceived (over the past 12 months) and expected (over the coming 12 months) credit availability. The average perceived probability of missing a minimum debt payment over the next three months decreased slightly to 13.9 percent from 14.1 percent in July, but remaining well above average 2015 and 2016 levels.

The mean perceived probability of a higher average year-ahead interest rate on savings accounts decreased 0.1 percentage points in August to 28.7 percent, continuing the downward trend that started in December 2015.

Respondents felt worse about their current household financial situation in August compared to July, but they were slightly more optimistic about their year-ahead prospects. The proportion of respondents who feel to be financially worse off (compared to year ago) increased by 1.6 percentage points to 23.9 percent, while the proportion of respondents who expect to be financially better off in a year (compared to today) increased by 1.3 percentage points to 37.4 percent.

For more information, visit

RISMedia welcomes your questions and comments. Send your e-mail to:

US Households’ Income Change

US households’ income shows biggest jump since recession, no change in income inequality

“(Bloomberg) – Fresh yearly data from the U.S. Census Bureau showed median, inflation-adjusted household income rose 5.2 percent to $56,516 in 2015, the highest level since $57,423 in 2007, when the recession began. Gains were spread across the income spectrum and by race, while women’s earnings inched closer to men’s.”
Positive changes in projected household incomes, and increases in consumer confidence will influence the Federal Reserve when they meet again to consider increases in the interest rate.
The Presidential election will likely influence when interest rates change, but rest assured, change is coming. This is important to those of us in real estate because rate changes influence a buyer’s affordability. One mortgage rate point is equivalent to approximately 10% change in affordability or purchasing power. This impacts both buyers and sellers.
Please contact us if we can assist you in understanding market variations and current housing trends.
Yours truly, Ann & John

Have things really changed since I last bought or sold a home

Dice buy sell

The answer is, most likely, YES.  The average time a home owner stays in their current home ranges from 5-9 years according to the National Association of Realtors (up from 3-5 years during the years prior to 2008). If you have not been in the housing market recently you will experience notable differences with this process. Your Realtor can provide a complete guide to the process of buying or selling a home today.

You will also find market conditions are continually changing. There are certain areas where transactions are fast and furious. Yet there are other locations where housing seems to move more slowly, still catching up with the most recent marketplace nuances, or competing with new construction increases. The good news is that we are experiencing positive changes that will continue to support strong home sales.

Don’t forget, it is still important to have the property looking as good as you can in order to generate interest. Most buyers, not investors, are looking for a turn-key product; a home that doesn’t require a lot of work before of after the move. It is important to remain compelling with your price. Know the value of your house and price it near where you think it is going to sell. Buyers should feel like they will be missing an opportunity if they fail to act.

As always, to better understand changes in the real estate market, start with your most trusted advisor. Or call us for more detailed information regarding your personal housing needs.

News from our Prosperity Home Mortgage Lender

Let’s Review Your Mortgage for Savings Opportunities;

This is a follow up to the email I sent you last week.  As you may or may not  know, mortgage rates have yet again, hit a new low.   Based upon the terms of the 30 Year Jumbo loan we completed in February of 2015, this may be a perfect time to review your loan program to determine if we can save you money. Even if you have already refinanced or closed on a new loan recently, you still may be able to benefit.  I’d be happy to provide a complimentary review at your convenience.

How much could you save?  The table below shows the principal and interest payments on your loan compared to other loan products on February 9, 2016. Rates fluctuate every day, so these options may only be available for a short time.


Loan Program Rate APR Monthly
Your Current 30 Year Jumbo Loan 3.875% $ 2,144
Your loan at our
30 Year Jumbo rate
4.000% 4.018% $ 2,177 $ -33
Your loan at our
5&5 Advantage ARM rate
N/A $ 0 $ 0

By refinancing your current loan, total finance charges may be higher over the life of the loan.
These mortgage rates apply only in certain conditions. Your loan’s final rate will depend on the specific characteristics of the loan transaction and your credit profile up to the time of closing. The displayed APRs include total points and additional prepaid finance charges but do not include other closing costs. On adjustable rate loans, rates are subject to increase over the life of the loan. Rates available as of date of printing and subject to change without notice. ** Total Est. Initial Housing Payment amounts includes principal and interest for both Primary and Secondary Financing as well as tax, insurance, homeowner dues. Payment amounts include mortgage insurance if the down payment is less than 20% or the loan product is FHA. Down payment amount excludes any secondary financing.

The scenarios shown above illustrate just a few of the many loan options you have at Prosperity Home Mortgage, LLC. These options might allow you to consolidate loans, make home improvements or simply cash out on some of the equity in your home.

Prosperity Home Mortgage, LLC appreciates your business and I thank you for placing your trust in me. Please contact me at 804-855-4590 or to review your loan for savings opportunities or if you have any questions about your mortgage.


Alicia O’Brien
Senior Mortgage Consultant
Prosperity Home Mortgage, LLC
NMLSR ID # 260889
Company NMLS ID #75164