Despite mixed signals, local Realtors are encouraged

In January 2011, Chuck Cornwell’s real estate agency put contracts on 45 homes.

A year later, RE/MAX Regency of Warrenton nearly doubled that number with 80 homes under contract.

“It’s looking good,” Cornwell said of the local residential home sales market. “We’re getting a really big push.”

Long & Foster’s Gloria Beahm also sounds upbeat about the market.

“It has been a very positive two months,” said Beahm, citing as evidence six contracts on properties listed for more than 90 days.

Charles Ebbets, her colleague in the firm’s Warrenton office, believes the market will bounce back, although not to pre-recession heights.

“I’m pretty confident it will come back,” said Ebbets, who earned his real estate license in 1971. “It won’t be as good as 2003 or 2005 or the early part of 2006, which was crazy and didn’t make sense. But it’s definitely picking up.”

Phones are ringing and people want to visit homes, he said. “I look for us to have a good spring and a good summer,” Ebbets said.

In interviews, Realtors said several factors give them reason for optimism.

Interest rates at 3.5 to 4 percent have never been consistently better, good prices have created a strong buyers’ market and monthly mortgage payments, depending on the property and purchase terms, can be lower than the cost of renting.

Joe Allen of Allen Real Estate Co. Ltd. of Warrenton said he tells potential buyers, especially young people, that they should take advantage of these favorable circumstances before they disappear.

“In my career, 8 percent [interest] was a very good rate,” said Allen, a Realtor for 39 years. “Now it’s 3.5 to 3.75 percent. That’s pretty doggone good. If they sit around much longer, they’re going to see prices, [mortgage] payments and interest rates going up.”

Despite favorable conditions, certain market impediments trouble Realtors.

“The inventory is a problem,” said Cornwell, a Realtor for 27 years. “There’s not enough houses to sell. We need more houses to sell under $500,000.”

When homes priced at $200,000 go on the market, they move quickly, said Beahm, who began selling real estate in Fauquier 32 years ago.

But “inventory is down and there aren’t a lot of homes on the market,” she said.

In time, Realtors hope the market eventually will sort itself out and stability will return.

For that to occur, they believe foreclosure and short-sale issues, among other things, must be resolved.

In January, the county went for a month without a recorded foreclosure, the first time that’s occurred in a long while.

Short sales, in which an owner sells a home for less than he or she owes on it, cut both ways.

On the one hand, such sales put more homes on the market at bargain prices. But they also contribute to declining values for neighboring homes, stifling the resale activity among owners who want the most for their property.

More new home construction would help expand the u n d e r- $ 5 0 0 , 0 0 0 home market, said Cornwell, who co-owns RE/MAX Regency with his wife Helen.

In fiscal 2011, Fauquier County issued 125 new home construction permits. In fiscal 2010 and 2011, it granted 106 and 91 such permits, respectively, according to county records.

But Cornwell’s quick to note that the new home construction market faces problems of its own because relatively high land prices make it cheaper for some to buy an existing home rather than build a new one. In the end, nobody can say with certainty where the residential real estate market’s headed or whether it has “legs,” as Allen put it.

Even the recent burst of interest and activity remains inexplicable to him.

“It’s out-of-the-blue,” Allen said. “The job market hasn’t improved. It’s sort of an enigma at this point. It’s too early. We’ll know more about what this means by the end of April.”