Pieces of Home by Virginia REALTORS®

V I R G I N I A A S S O C I AT I O N O F R E A LTO R S 速

Home Pieces of

2012 Virginia Housing Market

Report

V I R G I N I A A S S O C I AT I O N O F R E A LTO R S 速

A LO OK AT

THE YEAR IN HOUSING

Thanks for taking a look at Pieces of Home, the Virginia Association of Realtors®’ look at the past year in housing. Here you’ll find plenty of charts, graphs, and numbers, but those are only the framework for the real story. Housing turned a corner in 2012, and signs of recovery were evident, not only in the numbers but in consumer sentiment. It was a year of improved household balance sheets and increased business investment; it was a year we saw home values rise and foreclosures fall. Houses were selling again — a good sign. Yet: • Credit availability remained tight as lenders awaited the uncertain effects of new regulation, making it more difficult for many buyers to get a loan; • The inventory of homes for sale in Virginia dropped to the lowest levels in years, the result in part of many “underwater” borrowers who were choosing not to sell their homes if that meant taking a loss; • O ngoing uncertainty over our country’s finances, and the effect any deficit reduction deal would have on homeownership tax incentives, kept some buyers on the sidelines. In short, there’s good news from 2012 — better news than we’ve seen in five years — but there’s also concern for the future of this emerging recovery. So check out the numbers here and be hopeful, but also know that this recovery is still fragile, and its sustainability will depend largely on how our federal government deals with the fiscal and regulatory issues it now faces.

Numbers and stories In this report you’ll find both numbers — the statistics from 2012 — and stories. Pay attention to both. How should you tie them together? What does an increase in sales mean for you? How does fewer days on market affect home buyers and sellers? How does a foreclosure in your neighborhood affect your home’s value? And which numbers are important to better understand the market? Legislators digest our data to better inform their decisions, votes, arguments — and our laws. The media explain our data to their readers, viewers, and listeners in a concise and digestible way. Consumers take in our information and apply it to their family, their investments, and their stories. Virginia Realtors® connect the dots. We work with lawmakers, journalists, and most of all consumers to help everyone understand the markets — and what it may mean for our economic future. So read the numbers, consider the charts, and enjoy the articles. Pieces of Home is but one resource to help you understand what is a central part of Virginia’s economy: housing.

Mary Dykstra ABR, CRS President, Virginia Association of Realtors®

R. Scott Brunner CAE CEO, Virginia Association of Realtors®

TABLE OF CONTENTS 03 07 08 09 11 12

residential home sales

annualized 2009-2012 quarter-to-quarter let’s keep a good thing going virginia vs. united states changes in foreclosures regional changes in foreclosures

13 15 17 18 19 20

governor’s letter

the banking and mortgage lending environments zipcars, student loans and “generation rent” federal reserve bank of richmond speaks real estate

21 23 24 25

regional snapshots housing virginia

3, 5, 7, 0: the advantage “just below” pricing vhda

mortgage interest rates 30 year commercial real estate in virginia 2012

V I R G I N I A A S S O C I AT I O N O F R E A LTO R S ®

VIRGINIA MONTH-TO-MONTH SALES TRENDS

S I N G L E FA M I LY H O M ES , TOW N H O M ES , C O N D O S

2009

2010

2011

2012

12,000

10,000

8,000

sales

6,000

number of

4,000

2,000

CHANGE IN HOME SALES 2011 VS 2012

2011 TOTAL SALES = 84,108

2012 TOTAL SALES = 90,443

10,000 5,000

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

Scott Rogers Analyst/Consultant, Virginia Association of Realtors®

2012 Month-to-Month VA Home Sales // 2009 – 2012 If 2011 was a year of transition for Virginia home sales, 2012 was a year of strength in the residential housing market. Nearly every month during 2012 the residential home sales market experienced higher sales levels as compared to the same month during 2011. Many of these buyers committed to a home purchase because of increasing job stability and

certainty, others purchased because of the historically low interest rates, and still others sensed that the bottom of the housing market had arrived, or even passed them by. While each of Virginia’s home buyers during 2012 may have purchased for their own individual reasons, collectively they helped surpass 2010 and 2011 home sales.

+8% Change of Home Sales // 2011 VS 2012 Looking closer at 2011 and 2012 we note that only March and December showed stronger sales figures in 2011, with all other months in 2012 outperforming their counterparts during 2011.

NOV

DEC

REGIONAL C HANGES

IN HOME SALES // 2011 VS 2012

Scott Rogers Analyst/Consultant, Virginia Association of Realtors® As is typical, each region of the Commonwealth experienced slightly different trends in buyer activity over the past year. The Central Virginia and Northern Virginia regions led the way with 11% and 9% growth respectively, though the Central Valley (+8%) and Roanoke / Lynchburg / Blacksburg (+7%) weren’t far behind. Two of the smaller regions of the Commonwealth (Southside Virginia and Southwest Virginia) experienced modest declines (-3%, -1%) in buyer activity during 2012.

R EG I O N A L C H A N G ES I N H O M E SA L ES // 2 01 1 VS 2 01 2

CENTRAL +7.55% NORTHERN +8.57% CENTRAL +11.05% HAMPTON ROADS +5.09% CHESAPEAKE BAY VALLEY VIRGINIA VIRGINIA

2011 2012 2011 2012 2011 2012 2011 2012 4,7 18

ROAONOKE LY N C H B U R G BLACKSBURG

5,074

3 7,8 4 6

4 1 ,0 8 9

1 2 ,7 8 8

14, 2 0 1

+6.70%

SOUTHSIDE VIRGINIA

2011 2012 6, 24 2

SOUTHWEST VIRGINIA

2 0,7 0 2

-2.96%

2011 2012

6,6 6 0

1 ,6 23

-.89%

2011 2012 1,127

1 9,7 0 0

1,575

NORTHERN VIRGINIA

1 , 1 17

CENTRAL VALLEY

CENTRAL VIRGINIA ROANOKE/LYNCHBURG/BLACKSBURG SOUTHWEST VIRGINIA SOUTHSIDE VIRGINIA

HAMPTON ROADS/ CHESAPEAKE BAY 4

IN VIRGINIA

H O M E PR I CES

Scott Rogers Analyst/Consultant, Virginia Association of Realtors速 Strong buyer turnout during 2012 helped buoy the median sales prices seen in the Commonwealth over the past 12 months. As supply and demand goes, it is no surprise that higher buyer demand helped sellers obtain higher median prices during 2012, though it is important to note that some regions (i.e.Northern Virginia) experienced much more of an increase in median sales prices (+8%) than some of the smaller, southern regions of the Commonwealth. Overall, the median sales price increased 7% between 2011 and 2012, from $225,000 to $240,000. In 2011, several regions experienced a decline in median sales prices, but in 2012 every region held steady, or experienced increases in median sales prices.

R EG I O N A L C H A N G ES IN M E D IAN SAL E P R I C ES / / 2 01 1 VS 2 01 2

+.50% NORTHERN VIRGINIA +7.94%

CENTRAL VALLEY

$240,000

HAMPTON ROADS +2.56% CHESAPEAKE BAY

2011 2012 2011 2012 2011 2012 $ 19 9,0 0 0

$ 2 0 0,0 0 0

$ 3 1 5,0 0 0

$ 3 4 0,0 0 0

$ 1 9 5,0 0 0

+0.67% CENTRAL VIRGINIA +1.12%

ROAONOKE LY N C H B U R G BLACKSBURG

SOUTHSIDE VIRGINIA

$ 2 0 0,0 0 0

2012

+0.06%

2011 2012 2011 2012 2011 2012 $ 149,0 0 0

$ 15 0,0 0 0

$ 17 8,0 0 0

$ 18 0,0 0 0

$7 9, 9 5 0

VI RGI NI A M E DI AN SALE PRI CE

$ 8 0,0 0 0

0.00%

SOUTHWEST VIRGINIA

2011 2012 $ 1 10,0 0 0

M E D IA N

$ 1 10,0 0 0

SALE PRICE

2012 MONTH-TO-MONTH $ 204 5

900

$210

$225

$ 239

$ 249

$256

$255

$ 247

$240

$235

$ 245

$240

JA N

FEB

M AR

APR

MAY

JUN

JUL

AU G

S EP

O CT

NOV

DEC

000

950

000

190

000

V I RG I N I A

PRICE DISTRIBUTION IN HOME SALES // 2011 VS 2012

2 01 1

2 01 2

CHANGE % +35.14%

PRICE RANGES

+19.8% -1.43% +9.55% 7,295 8,703

+19.3%

6,497 7,685

+18.29% 11,435 13,404

+17.22% 18,841 20,510

+8.86% 24,747 24,776

+0.12%

00 25 ,0

24 ,0 00

0 23 ,0 0

22 ,0 00

21 ,0 00

20 ,0 00

0 19 ,0 0

00 18 ,0

17 ,0 00

00 16 ,0

15 ,0 00

-2.71% 14 ,0 00

13 ,0 00

0 12 ,0 0

00 11 ,0

10 ,0 0

9, 00

0 8, 00

00 7, 0

00 6, 0

12,102 11,774

5, 0

4, 00 0

3, 00 0

2, 00 0

1,0 00

111 $2 M+ 150 $1 . 5M- $2M 197236 $1 M- $1 . 5M 819990 $7 50K- $1M 2,2,215022 $500K-$750K $400K-$500K $300K - 400K $200K - 300K $100K - $200K $0-$ 100 K

Scott Rogers Analyst/Consultant, Virginia Association of Realtors速 As further proof of improving housing markets across Virginia, nearly every price range experienced an increase in buyer activity during 2012. The only exception to this is the lowest price range (0 -$100K) which declined 3%, though this type of trend

is common in the lowest price range as a market recovers. The strongest increases in buyer activity were experienced in the $1M+ price ranges, as well as in the $300K-$750K price ranges. There was very little change in the $100K-$200K price range, again likely

a result of some such properties moving upwards into the next price bracket as local markets improved.

V I R G I N I A A S S O C I AT I O N O F R E A LTO R S 速

V I R G I N A DAY S O N M AR K E T / / 2 01 2 M O N T H -TO - M O N T H

100

number of

days

106

104

102

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

60 50

V I R G I N IA AN N UA L IZ E D 2 0 0 9 - 2 01 2 // Q UA RT E R -TO - Q UA RT E R 100,000

number of

sales

90,000

80,000

70,000

60,000

89,640 88,127 87,843 91,051 90,703 93,279 87,921 83,630 84,194 81,363 83,560 84,108 85,078 86,694 88,403 90,443 2009 Q1

2009 Q2

2009 Q3

2009 Q4

2010 Q1

2010 Q2

2010 Q3

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

2012 Q1

2012 Q2

2012 Q3

2012 Q4

Scott Rogers Analyst/Consultant, Virginia Association of RealtorsÂŽ Annualized 2009-2012 // Quarter-to-Quarter Long-term trends provide the best and most reliable indicators of overall market performance, especially when analyzing data from the past four+ years in Virginiaâ&#x20AC;&#x2122;s overall housing market. After an overall market decline through 2009, the housing market

showed some moderate improvement during 2009/2010, largely due to the federal home buyer tax credit. Then, after that tax credit opportunity expired, buyer activity cooled yet again through mid-to-late 2011. Over the past 18+ months, however, Virginia has experienced consistent growth in buyer activity as shown in the

accompanying annualized sales trend data. This sustained, long-term growth in buyer activity is a clear indicator of an ever-improving housing market in the Commonwealth.

50,000

TODAY ’S H OUS ING Laura Lafayette

LET’S KEEP A GOOD THING GOING

CEO, Richmond Association of Realtors®

No doubt about it, no need to whisper the good news with fingers crossed: The Virginia housing market is in recovery. Officially, the recovery began in 2011; in 2012, it actually felt like a recovery. For instance, for the first time in seven years, the Richmond metropolitan region experienced positive price appreciation. The average sale price for a single family home in 2012 was 2.5% better than the previous year. Now, an increase of 2.5 % may not seem like much. It’s not close to the year over year price appreciation we witnessed from 2003 to 2007. But given the pain of the economic hangover that comes with a crash from such heady highs, do any of us really want to return to those days? A steady, sustainable uptick in housing activity is what we experienced in 2012 and it is what we can expect in 2013, as long as we are able to beat back the threats to this nascent, fragile recovery. While local and state regulatory policies can dramatically affect housing costs and thus access to affordable housing opportunities, ongoing policy discussions at the federal level have the potential to affect dramatically not only the housing industry but the nation’s overall economic health. Any talk of a Qualified Residential Mortgage or drastic reforms at Fannie Mae and Freddie Mac that would effectively eliminate middle-class access to thirty-year, fixed-rate mortgages is completely irresponsible. But the policy decision that could cast a damaging chill over a gradually warming housing market is the modification or elimination of the Mortgage Interest Deduction (MID). The MID has been a vital part of the federal tax code for 100 years. It is one of the givens that home buyers count on when making a purchase decision. The primary beneficiaries of this tax break are middle-class Americans.

Sixty-five percent of families who claim the MID earn less than $100,000; 91% of all those who claim the benefit earn less than $200,000 a year. No one can argue that the mortgage interest deduction is a tax break for the wealthy. In reality, the MID is a benefit for hard-working families who pay their mortgages every month. Preserving affordable home ownership opportunities should be reason enough to take this deduction of the MID off the table during tax reform discussions. But if that isn’t a sufficient rationale, consider the dire consequences for the national economy if housing slows once again. With the exception of the last recession, a strong housing market mitigated the severity of previous economic downturns. In the Great Recession from which we are now slowly recovering, an anemic housing market exacerbated both the depth and duration of the downturn. A thriving housing market is the essential catalyst upon which our local, state, and national economies rest. From real estate tax revenue to all of the jobs created in the home construction, buying, and selling processes — so goes housing, so goes our collective economic health. Preserving the MID isn’t about protecting special interests; it’s about protecting all of our interests. If the MID is preserved and if federal regulatory reform is balanced and not burdensome, then the outlook for 2013 is strong. Interest rates will remain low for the foreseeable future. Virginia’s high employment numbers are giving rise to increasing consumer confidence. Young adults and growing families who have delayed home purchases in recent years are contributing to pent-up demand that can be satisfied in the coming year. Add to this mix the fact that Virginia is blessed with excellent geography, a diverse economy, top-notch schools, and a talented workforce — we in Virginia should continue to enjoy sustained economic recovery. Let’s make sure housing serves as the foundation for our forward momentum.

V I R G I N I A A S S O C I AT I O N O F R E A LTO R S ®

V I R G I N IA V S U N I TE D STAT ES / / M O NT HLY HOME SA L ES 2 012*

VI RGI N I A VS UN I T E D STAT ES / / ME DI AN PRI CE 2 01 2 * *

10K

$250K

$240K

$230K

$220K

6K 5K

50 73

57 86

72 16

77 03

90 68

97 47

86 07

89 55

71 42

71 85

73 05

66 56

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

$210K $200K

450K

$200K

400K

$190K

350K

$180K

300K

$170K

250K 200K

260 287 360 400 448 463 430 476 372 401 387 000 000 000 000 000 000 000 000 000 000 000

TBD

JAN

DEC

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

$160K $150K

204 210 225 239 900 000 000 000

249 950

256 255 000 190

247 240 235 245 240 000 000 000 000 000

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

154 600

155 600

164 800

173 700

180 300

188 187 800 800

184 900

178 300

176 900

180 600

TBD

JAN

FEB

MAR

APR

MAY

JUN

AUG

SEP

OCT

NOV

DEC

JUL

Scott Rogers Analyst/Consultant, Virginia Association of Realtors® * Virginia continues to experience very similar trends in sales pace as compared to the overall U.S. home sales tracjectory. As shown, the overall U.S. housing market showed somewhat stronger performance in several key months (April, August, October) but overall, Virginia’s housing market stayed in line with national trends.

** J ust as with the pace of home sales, Virginia’s median sales price has tracked closely with the overall median sales price trends for the United States during 2012. Both trends show moderate declines during the winter, and peak in the summer months.

V I RG IN I A V S U N IT E D STAT ES / / U NEM PLOYMEN T 2 009 – 2 012 // Y E A R-TO -Y E A R

20 09

6.2% 6.7% 6.7% 6.4% 6.9% 7.2% 7.0% 7.0% 6.9% 6.8% 6.8% 7.0% 7.8% 8.2% 8.6% 8.9% 9.4% 9.5% 9.5% 9.7% 9.8% 10.1% 9.9% 9.9%

20 10

7.8% 7.7% 7.4% 6.7% 6.8% 7.0% 6.9% 6.9% 6.5% 6.4% 6.5% 6.4% 9.7% 9.7% 9.7% 9.8% 9.6% 9.5% 9.5% 9.6% 9.6% 9.7% 9.8% 9.4%

20 11

6.9% 6.6% 6.3% 61% 6.0% 6.0% 6.1% 6.3% 6.5% 6.4% 6.2% 6.1% 9.1% 9.0% 8.9% 9.0% 9.0% 9.1% 9.1% 9.1% 9.0% 8.9% 8.7% 8.5%

20 12

5.8% 5.7% 5.6% 5.6% 5.6% 5.7% 5.9% 5.9% 5.9% 5.7% 5.6% TBD 8.3% 8.3% 8.2% 8.1% 8.2% 8.2% 8.2% 8.1% 7.8% 7.9% 7.8% 7.8% JAN

FEB

VIR G IN I A ECO N O M I CS

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

Chris Chmura President and Chief Economist, Chmura Economics and Analytics

In the third quarter of 2012, GDP grew an annualized 3.1% — the fastest pace of growth since the fourth quarter of 2011 — after increasing 1.3% in the second quarter of 2012. Although businesses continue to expand payrolls cautiously, non-farm private payroll growth for the third quarter accelerated after lackluster job growth in the second quarter. The national unemployment rate has declined considerably since peaking at 10% in October 2009, but remains uncomfortably high and is likely to remain above 7% through 2013. Through the end of the third quarter of 2012, home sales started to rise — though

were still depressed by historical standards. Mounting evidence shows home prices have bottomed out and are finally starting to recover. After being a significant drag on the economic recovery, the housing sector was a positive contributor to GDP growth in each of the first three quarters of 2012. The U.S. stock market rose over the third quarter as central bankers, both at home and abroad, took aggressive actions to stimulate growth. Our most likely forecast assumptions reflect a moderately improving economy with continued tepid job market

improvement as sequestration cuts are avoided by Congress. The results are modest GDP and employment growth. Although the labor market continues to heal, job growth will likely remain somewhat slow in 2013. The unemployment rate is likely to average 7.6% in 2013 according to this scenario. The Federal Open Market Committee (FOMC) keeps the federal funds rate target near zero through the second quarter of 2015 under this most likely scenario.

R EG I O N A L C H A N G ES IN FO R EC LO S U R ES / / 2 01 2 Q UA RT E R -TO - Q UA RT E R *

CENTRAL VALLEY Q1 Q2 Q3 Q4

Q1 Q2 Q3 Q4

99 92 94 73

CENTRAL VIRGINIA Q1 Q2 Q3 Q4

435 408 412 357

SOUTHSIDE VIRGINIA Q1 Q2 Q3 Q4

NORTHERN VIRGINIA

53 55 63 45

*Data provided by RealtyTrac速

SOUTHWEST VIRGINIA 1159 974 818

776

ROANOKE/LYNCHBURG/BLACKSBURG Q1 Q2 Q3 Q4

107 157 172 94

Q1 Q2 Q3 Q4

21 32 30 35

HAMPTON ROADS/CHESAPEAKE BAY Q1 Q2 Q3 Q4

582 551 521 516

STATE OF VIRGINIA Q1 Q2 Q3 Q4

2,456 2,269 2,110 1,896

R EGI ON A L

CHANGES IN FORECLOSURES 2012

C. Theodore Koebel, Ph.D. Professor, Urban Affairs and Planning and Senior Associate, Center for Housing Research, Virginia Tech For Virginia’s housing market, distress indicators are down and recovery indicators are up again this past year. The multi-family market has boomed; rents have increased; the stock market has boomed; interest rates remain low; and foreclosures went down. Unemployment has remained stubbornly high—but Northern Virginia is in the best metropolitan employment market in the country and the state as a whole is doing better than most other states. Vacancy rates based on units for sale or for rent are relatively low, particularly for the owner-occupancy market where prospective buyers aren’t likely to find a lot of houses among which to choose. So after a prolonged trough, why hasn’t the owner-occupancy market rebounded more sharply? Are we looking at a new normal, with a tepid recovery of only anemic growth, or should we expect a recovery sometime soon to be made stronger by the long time waiting?

as improved sales volumes and prices draw more units onto the market, stalling or even reversing improvements in prices. Before the market starts to approach a normal recovery, the sales volume has to increase significantly above the 2012 level of 90,000 units in order to absorb excess inventory. Unfortunately, federal policy makers continue to ignore or misjudge the housing market, particularly the need to establish a postGreat Recession mortgage market with adequate underwriting criteria and capital flow to support demand. If we finally get to a real housing recovery with adequate capital flow, pent-up demand and low interest rates could create a housing boom. Otherwise, the long time coming might just become the new normal.

And how much of this long time waiting is due to excess inventory? Even though foreclosures are down, this only means that the flow of units into the excess inventory has slowed. Based on my estimate of the normal number of vacant units held off the market, there were an additional 60,000 excess vacant units statewide in 2011 held off the market. Plus there were 30,000 single-family detached or attached units that could shift from temporary rental to the for-sale market. This excess inventory continues to create a drag on the recovery in the sales market,

V I R G I N I A A S S O C I AT I O N O F R E A LTO R S ®

EVERY VIRGINIAN SHOULD BE PLEASED Every Virginian should be pleased with what we have

Virginia is consistently recognized for our business friendly

accomplished together in the past few years. We have

climate and is often rated at the top of national rankings.

weathered the financial storm and led the nation’s recovery.

In addition, Virginia communities consistently rank

We have worked together to create a solid, prosperous, and

among the top 10 best places to live, work and raise a family.

multifaceted economy — a rising tide that, as the country

Virginians have access to some of the best educational

slowly emerges from the worst financial crisis most of us have

institutions and medical care in the country.

known, has raised Virginia well above much of the country. We have set the example for the rest of the nation and we are outperforming our neighboring states in many ways. Today, our unemployment rate is 5.5 percent — the lowest in the Southeast, the second lowest east of the Mississippi, and more than two points below the country as a whole. And we continue to create thousands of new, private-sector jobs in defense, health care, technology, and manufacturing. Virginia has worked hard to expand our economy — to create a business climate for future growth, create good jobs, and build a “Commonwealth of Opportunity.” Our hard work has paid off.

“Our hard work has paid off.”

In short, Virginia works. So when the housing crisis came, we responded.

And as demand for homes grew, so did their values. In

We set priorities and cut spending for the state and for

2012, not a single region of the state saw sales prices drop

ourselves. We worked hard to improve our household

— and most saw prices rise. Best of all, these are economic

finances and live in a more fiscally responsible manner. We

improvements that have shown themselves to be both steady

passed laws that helped individuals succeed while making it

and long lasting.

easier for businesses to prosper. While there are still challenges ahead, we will work Our fiscal responsibility — on a personal and a state level

together to face those challenges and develop common

— has borne results. While we aren’t out of the woods

sense solutions for a sound economic future for our

completely, in 2012 the housing recovery could be seen

Commonwealth. No matter what our ideology or our

across the Commonwealth.

background, our education or our politics, we share a common commitment to excellence, to prosperity, and to

Virginians took advantage of our strong job market and low

our fellow Virginians.

interest rates and felt secure enough to buy homes. Home sales in Virginia jumped eight percent overall in 2012, with almost every month showing more sales than in the previous year.

Bob McDonnell Governor of Virginia V I R G I N I A A S S O C I AT I O N O F R E A LTO R S ®

THE BANKING AND MORTGAGE LENDING ENVIRONMENTS Richard Owen Executive Director, Virginia Mortgage Lenders Association, & Bruce Whitehurst President & Chief Executive Officer, Virginia Bankers Association When we look at the regulations that have emerged as a result of the housingmarket crash and the Great Recession — notably the introduction of the Dodd-Frank Wall Street Reform and Consumer Protection Act — we fear that they’re creating major obstacles for the banking and mortgage finance industries. As the lending community prepares for this emerging new lending world, all of us have questions surrounding exactly what to expect and when. While we don’t have all the answers, the picture is becoming clearer. Dodd-Frank imposes what we see as an unprecedented level of new requirements regarding the business activities of lending institutions. That means the cost, process, and availability of mortgage solutions will change significantly. Recently, the Consumer Financial Protection Bureau released its “ability-torepay” rule as well as its definition of a “qualified mortgage” (QM). In an effort to prevent predatory lending, the new rules set standards such as minimum debt-to income ratios for most borrowers, a limit to points and fees that can be charged to borrowers, and it bars certain features of non-traditional mortgages such as negative amortization or interest-only payments. One of the biggest issues throughout the rule-making process was what protections lenders would have for loans that met these QM requirements. The good news for lenders is that the rule includes a legal safe harbor for those who make “prime” QM loans. On the other hand, it also allows for “sub-prime” QM loans that carry less legal protection for lenders if borrowers default. The resulting risk to lenders of these sub-prime loans will make them less desirable for lenders to make, something we see as impacting both the cost and availability of credit.

Other new regulations should be announced by the end of 2013: rules for so-called “higher-cost” mortgages, new loan servicing guidelines, loan officer compensation rules, and a final risk-retention proposal for Qualified Residential Mortgages. Also coming in 2013 will be a new combined RESPA/Truth in Lending Act rule. At 1,099 pages, the proposed rule could cause significant change to the mortgage lending process and impact all parties involved in a real estate transaction. It is designed to simplify the paperwork borrowers complete when applying for a loan, while hopefully clarifying the process; these new forms will be seen and used by every person in the country who borrows money to buy a new home. These represent just a few examples of a multitude of emerging regulations that will impact mortgage lending in 2013 and beyond. While both the Virginia Mortgage Lenders Association and the Virginia Bankers Association support effective regulation and transparency in the lending process, these rules carry some unintended consequences that will likely lead to adverse impacts on the cost and availability of credit. It is important that legislators and regulators take into account the cumulative impact of these changes on the banking and mortgage lending industries — and by extension, on consumers — especially during this time of an already fragile economy. No one is disputing that banks and lenders need to be properly regulated, but going too far can significantly harm communities and consumers.

DODD-FRANK RULE-MAKING PROGRESS BY DUE DATE AS OF 12/3/12** Without question, the past few years have been difficult for mortgage lending and banking, but there are some very encouraging signs. Nationally, we’re seeing fewer failed institutions, and 90% of banks are profitable. Past-due loans (as a percentage of total loans) continued to decrease — we expect year-end numbers to show them to be at the lowest level since 2008. Multiple studies show that the foreclosure problem is tapering off and the housing market is healing both nationally and especially here in Virginia. Despite the changing regulatory environment, banks and mortgage companies have money to lend during a time when rates and home values remain relatively low and we believe that 2013 will still represent a great time to buy a home for many consumers. While not new for the banking industry, financial education has clearly become more important than ever in these recent challenging years. Lenders are increasingly focused on promoting financial literacy in a proactive manner. In addition to supporting recent legislation that led to financial literacy education requirements in high schools, banks in Virginia participate in hundreds of community and national events to further this important cause. Not only is it the right thing to do, it is also good business as lenders benefit when future borrowers are educated about their financial situations and follow-through to make good choices. While the challenges outlined above will certainly make lending more complex and difficult, we are confident that as all industries connected to housing work together on behalf of prospective home buyers and borrowers, we will be able to accomplish a more balanced regulatory landscape that will benefit everyone.

2010 Q3

2010 Q4

2011 Q1

2011 Q2

119

2011 Q3 37

2011 Q4 25

2012 Q1 2012 Q2 16

2012 Q3 2012 Q4

2013 Q1 2013 Q2 1

2013 Q3 2013 Q4

116

NOT SPECIFIED 2

ANNUAL

NATIONAL MORTGAGE FINANCE FORECAST ORIGINATIONS*

Refi

Purchase

20 Finalized

$503

2012

$703

2014 $0

$400

Missed Deadline: Proposed

60 Missed Deadline: Not Proposed

100 Future Deadline: Proposed

120

140

Future Deadline: Not Proposed

$1,247

$592

2013

* Source: Mortgage Bankers Association, 12/18/2012

$818

** Source: Davis, Polk, & Wardwell, LLP Rulemaking counts are based on estimates and require judgement. Number of Required Rulemakings (Joint rules are counted for each applicable agency.)

$358 $800

$1200

$1600

$2000

V I R G I N I A A S S O C I AT I O N O F R E A LTO R S ®

Z IPC A R S, ST UD E N T LOA NS

AND “GENERATION RENT”

Andrew Kantor Editor and Information Manager, Virginia Association of Realtors® James Madison University is getting Zipcars — cars you can rent by the day or by the hour. Need to get someplace? Pull out your phone, find the nearest Zipcar, and rent it. So what does it have to do with real estate? More than you might realize. Search on the phrase “Generation Rent.” Young people aren’t rushing to buy the things their parents did — cars, houses, even bicycles. They’re choosing the flexibility and mobility of renting instead, and the arrival of Zipcars at JMU is just another example. This trend is mostly by necessity, somewhat by choice. And it’s entirely worth keeping an eye on. The Necessity Try to picture a trillion bucks worth of student debt. That’s what American students are facing. About 59% of Virginia college graduates enter the workforce significantly in debt — an average of $24,717. (Contrast most European countries where post-secondary education is free — they consider it an investment.) It’s called “crushing debt” for a reason; it’s hard to get your sea legs when you start out 20 or 30 grand in the hole. Considering the dearth of good-paying jobs for recent grads, they’re looking at putting a significant portion of their incomes toward paying for school. Buying a house? Ha! Result: Rental vacancies are at their lowest level in a decade. As Kirsten Salyer wrote for Bloomberg, “Commitment phobia isn’t a fad. For most, it’s an economic reality. Renting isn’t a choice when you can’t afford to buy, or qualify for a loan, or count on being in the same job for more than a few months.”

The ripple effects are enormous. Those grads used to be the next in line to buy starter homes, allowing the previous cohort of owners to move up. These days, not so much. And it’s not just about the social issues of a more-mobile generation. It’s about the economic reality. Renting is easier, especially when your credit has a big, red “student loan” on it. Sociologist Katherine Newman told NPR, for example: “I’m hoping that the Millennial Generation doesn’t set its sights on homeownership as a benchmark of economic stability, because it’s going to be out of reach for so many of them that it will just be a recipe for frustration.” The Mentality of Change This is also a generation accustomed to things changing every year. These are the people willing to wait in line for hours for a new gadget that’s a tiny upgrade to the one they already own. Forget planned obsolescence. This is voluntary obsolescence. And forget about working at the same factory for 50 years and retiring with a pension; a new job every two or three years is becoming the norm. No more settling down in one spot for the rest of their lives; “the house I grew up in” is an anachronism. And with that expectation of change comes less of a desire to put down roots. The less you carry — figuratively and literally — the easier it is to change. Car ownership isn’t about making a statement anymore. Young folks tend to think of a car as a utility. Sure they’d love something newer/faster/slicker, but it’s not that important. If they define themselves by any property, it’s their consumer electronics — what phone/tablet/notebook they own. Hence, Zipcars.

It’s a huge issue, and it’s only getting larger as college costs rise. As people borrow more and more for school, years’ worth of house payments are displaced. And you can tout the economic value of home ownership all you want; it doesn’t mean much when you can’t get a loan.

Can we predict how things will change? Will the rental trend continue or will Generation Rent eventually become Generation Finally Settled Down? Can’t say. But what we can say is that right now home ownership is out of the question for many of the people who used to fuel the market. And that’s going to change the way the market works — how severe and for how long is anyone’s guess.

F E D E R AL R ESE RVE B A NK OF RIC HMOND

SPEAKS REAL ESTATE

Sonya Ravindranath Waddell and R. Andrew Bauer Regional Economists, Federal Reserve Bank of Richmond After years of bad news on Virginia housing markets, it was nice to get some good news in 2012. According to data from the Mortgage Bankers Association, the number of Virginia homes entering foreclosure in the third quarter of 2012 was the lowest it has been since the third quarter of 2007. Meanwhile, the CoreLogic house price index for Virginia grew on a year-overyear basis for most of the year, home sales picked up, and shadow inventories continued to decline, thanks to falling delinquency and foreclosure rates. Furthermore, residential construction started to show signs of life in 2012, with a modest increase in housing starts along with more stories from builders and developers about growing construction activity and lot development in residential real estate across the Fifth Federal Reserve District. (The Fifth District includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.) In addition, the labor market, which is so inextricably tied to outcomes in housing, continued to improve — albeit at a modest pace — in Virginia and in the nation.

Despite the improvement, conditions still cannot be characterized as strong. We have a ways to go until we have a full recovery in housing and labor markets. According to CoreLogic Information Solutions, house prices are at least 20% below where they were in 2006, and more than 20% of Virginia homeowners owe more on their mortgages than their houses are worth. We have more than three times as many homes in foreclosure than we had in the beginning of 2000, and more than seven times as many as in the first quarter of 2006. In addition, at 5.6% (in November 2012) the Virginia unemployment rate is well below its peak in 2010 but is still 2.3 percentage points higher than where it was prior to the recession. Of course, all housing is local. Therefore, in April 2012, the Federal Reserve Bank of Richmond teamed up with the Virginia Association of Realtors to survey Virginia Realtors. Altogether, 1,449 Realtors® from across the state answered 11 questions about the state of the housing market in their areas and how conditions had changed in the first quarter of 2012.

VIRGINIA REALTORS REPORTING THAT MARKET CONDITIONS ARE BETTER (SLIGHTLY OR SIGNIFICANTLY)

VIRGINIA REALTORS REPORTING ON IMPROVING MARKET CONDITIONS IN THEIR REGIONS. (SLIGHTLY TO SIGNIFICANTLY)

What did they tell us? Most respondents indicated slightly or significantly improved conditions, with the strongest results in Northern Virginia (63% reported improvement) and the weakest results in Eastern Virginia (north of Hampton Roads) and Southwest Virginia where 49% and 44%, respectively, reported improvement. Distressed home sales weighed on house prices to varying degrees, with more than half of respondents in the Eastern, Hampton Roads, and Central regions indicating that distressed homes were a big factor, but less than 25% in Southwest or Northern Virginia indicating that they were a big factor. Tighter underwriting standards and challenges obtaining mortgage financing also weighed on many markets. Importantly, many of the more positive reports came from Northern Virginia, which was once the epicenter of the housing crisis in Virginia. Residential real estate has been slow to rebound after the Great Recession. Instead of contributing to the recovery, as it has in previous recoveries, housing has been a drag on the economy. However, the bottom of the housing market appears to have been reached and as long as labor markets continue to improve, we can safely expect further improvement in residential real estate in 2013. Just do not expect it to come too quickly. The story of this housing rebound in Virginia is “slow and steady wins the race.”

VIRGINIA

PERCENT OF RESPONDENTS

NT OF RESPONDENTS 43.6

58.2

43.6

58.2

48.7

58.2

48.7

58.2

57.1

58.5

57.1

58.5

57.8

63.2

57.8

63.2

federal reserve bank of richmond virginia realtor survey

V I R G I N I A A S S O C I AT I O N O F R E A LTO R S ®

M O RTG AG E IN T E R EST R AT ES / / 2 0 0 9 - 2 01 2 ( 3 0 Y E A R) 6%

20 09

5.05%

5.13%

5.00%

4.81%

4.86%

5.42%

5.22%

5.19%

5.06%

4.95%

4.88%

4.93%

4% 3%

20 10

5.03%

4.99%

4.97%

5.10%

4.89%

4.74%

4.56%

4.43%

4.35%

4.23%

4.30%

4.71%

4% 3%

20 11

4.76%

4.95%

4.86%

4.78%

4.60%

4.51%

4.55%

4.22%

4.01%

4.10%

4.00%

3.95%

4% 3%

20 12

3.98%

3.95%

3.99%

3.88%

3.75%

3.66%

3.49%

3.59%

3.40%

3.41%

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

3.32% NOV

3.35% DEC

4% 3%

COMMERCIAL REAL ESTATE ACROSS VIRGINIA Valued around $11 trillion (give or take a few billion), commercial real estate is a significant part of the nation’s economy, and the commercial numbers give you a different kind of information than residential numbers do. A strong residential market can help push the economy by creating jobs (from Realtors® to movers to landscapers); in a way, residential real estate is a leading indicator. On the other hand, the commercial market is a trailing indicator. When it’s strong, it indicates a recovered — or at least recovering — economy.

That is, in fact, what we’re seeing. Most of the country’s major commercial real estate sectors show improving fundamentals — slowly improving, to be sure, but improving nonetheless. Some sectors, such as multifamily housing, are already close to fully recovered, according to the National Association of Realtors®. Others are, not surprisingly, recovering more slowly, but the bottom line is that the expected 2.5% economic growth in 2013 will help improve commercial markets across the board.

When a commercial market improves, it indicates that businesses are expecting to expand, possibly (and hopefully) as a result of what they view as a growing economy. It also tells us that credit is beginning to loosen thanks to lenders who also see improvements. An additional positive: An improving commercial market can also create a positive feedback loop. With new or expanded facilities comes a need for furniture, office equipment, and of course, employees. Commercial expansion can push economic expansion, which can then increase the need for more offices, factories, and stores.

Look for Quarterly Commercial Real Estate Reports from VAR coming this year in partnership with CoStar Group.

V I R G I N I A A S S O C I AT I O N O F R E A LTO R S ®

REGIONAL

SN A PSH OTS

NORTHERN VIRGINIA

CENTRAL VALLEY major industry driver

major industry driver

home sales total

GOV ER NMENT 41 ,08 9

5,074

median sales price

change in year-over-year office vacancy

unemployment %

$ 34 0,000 +1 . 3%

4. 2 6 %

CENTRAL VIRGINIA

$ 2 0 0,0 0 0 +1 .6%

5. 5 5 %

HAMPTON ROADS/CHESAPEAKE BAY major industry driver

major industry driver

home sales total

BUS I NES S 14 ,2 01

M I L I TARY/ TO U RI SM 2 0,70 2

median sales price

change in year-over-year office vacancy

unemployment %

$ 18 0,000 -0. 3%

AG RI C U LT U RE

6.06%

$ 2 0 0,0 0 0 -1 . 1 %

5.7 1%

SOUTHSIDE VIRGINIA

SOUTHWEST VIRGINIA major industry driver

FORT LEE MILITARY EXPANSION home sales total

1 ,57 5

major industry driver

NATURAL ENERGY RESOURCES home sales total

1 , 1 17

median sales price

change in year-over-year office vacancy

unemployment %

$ 8 0,000 +1 .7 %

7. 22%

ROANOKE/LYNCHBURG/BLACKSBURG major industry driver

UNIVERSITY/HIGHER EDUCATION home sales total

6,6 60

median sales price

$ 1 50,000

change in year-over-year office vacancy

+0.7 %

unemployment %

6.02%

*The health of Commercial Real Estate Statistic is based on the percentage of office vacancies for 2012.

$ 1 10,00 0 0.0. %

5. 9 1%

THERE’S MORE TO AFFORDABLE HOUSING THAN YOU MAY THINK With help from VAR, five local Virginia Realtor® associations, and the National Association of Realtors, we recently released our latest Web-based tool, Playbook: Find What Works to enthusiastic reviews from users.

This groundbreaking resource is available now for Northern Virginia, and on March 1, 2013, will provide a comprehensive statewide inventory of affordable housing policies and programs. With Playbook, users can locate programs where they live, and model new programs after successful ones that are already at work in Virginia. Playbook answers questions like: + Are there any Affordable Dwelling Unit programs near me that help first-time home buyers? + Who offers pre-purchase counseling or down-payment assistance programs in my area? + How can I find out more about foreclosure prevention and financial literacy classes?

Visit the Housing Virginia website at housingvirginia.org for more information about Playbook, and to access the latest news and information about housing topics, including Housing 2020, a multimedia information kit that shows trends affecting housing over the next decade, and Sourcebook, the most-recognized online resource measuring housing affordability in Virginia. Housing Virginia provides technical assistance and financial support to coalitions committed to expanding affordable housing through Virginia. We also provide educational opportunities through symposiums and local training programs. Contact us today at housingvirginia.org to learn more or schedule a speaking, education, or training session in your area. Housing Virginia wishes to thank the Virginia Association of Realtors for its generous support since 2004. * Housing Virginia thanks the Dulles Area Association of Realtors®, Fredericksburg Area Association of Realtors®, Greater Piedmont Area Association of Realtors®, Realtor® Association of Prince William and the Richmond Association of Realtors® for their support of Playbook through five NAR Housing Opportunity grants that were endorsed by VAR.

3, 5, 7, o r 0

THE ADVANTAGE “JUST BELOW” PRICING

Eli Beracha Assistant Professor, Finance and Real Estate, University of Wyoming College of Business Michael J. Seiler Founder and Director, Institute for Behavioral and Experimental Real Estate, Old Dominion University It has been argued that due to limited human processing capacity, potential home buyers often use the asking price on a home as a shortcut to estimate its value. So establishing a listing price that is expected to yield the highest settlement price (without prolonging the property’s time on the market) is vitally important. While determining the value of a home involves many subjective factors, there is no reason to expect that the number of homes with a true underlying value of $180,000 would be different from the number of homes with a true value of $181,000 or $180,347. Nevertheless, asking prices tend to be highly clustered. For example, an examination of asking prices quickly reveals that many more houses are listed for $180,000 compared with $181,000 — and practically no houses are listed for $180,347. It is not surprising that most sellers will choose not to bother with an asking price that is too precise, such as $180,347. The last three digits (347 in this example) are typically seen as less important. However, even when the third left-most digit is considered (the thousands digit in a typical six-digit price), many more sellers select an asking price that is associated with the figures 0 and 9 compared with 3 or 7; there are more homes priced at 189,000 than at $187,000. What effect does that have? We investigated how the thousands digit of the asking price is related to both the degree to which sellers overprice their homes, and the discount buyers negotiate on homes.

Particularly, we associate the 3rd left-most digit with three different pricing strategies and compare them to determine which is the most likely to yield the highest settlement price after controlling for the true underlying value of the home. Pricing strategy one: “Round pricing” where the third digit is 0 or 5 (e.g., $200,000); Pricing strategy two: “Just below round pricing,” where the third digit is 9 or 4 (e.g., $199,000) Pricing strategy three: “Precise pricing,” where the third digit is 1, 2, 3, 6, 7 or 8 (e.g., $196,743). What did we find? Sellers who employ the “just below” pricing strategy overprice their home by more than sellers who use a round or precise strategy to an economically (and statistically) significant extent. But buyers, we found, in fact tend to negotiate more on that “just below” pricing strategy. The net effect is that, despite the tendency to overprice a home, “just below” pricing yields the seller the highest price relative to the true underlying home value. Put another way, although buyers (using the “just below” strategy) tend to negotiate a greater discount on the price, that reduction is more than offset by the typically higher initial asking price associated with the “just below” pricing strategy. Therefore, our results are consistent with studies from other fields that advocate “just below” as the superior pricing strategy.

V I R G I N I A A S S O C I AT I O N O F R E A LTO R S ®

THANK YOU VHDA thanks the VAR for being part of our mission helping Virginians attain quality, affordable housing.

V IRG INIA HO U S ING DE V ELO PM ENT AU T HO RIT Y Affordable housing is the cornerstone of a strong economy. More than a quality-of-life issue, housing impacts everything from local school systems to our stateâ&#x20AC;&#x2122;s business climate. At VHDA, we reach out to those who need quality, affordable housing: low-to-moderate-income Virginians, seniors, people with disabilities, residents of high growth / high cost areas and a diversity of populations. We also help finance revitalization of older urban areas and preservation of small towns and communities. To date, VHDA has financed more than 177,500 homes, more than 139,500 rental units, and helped more than 132,000 Virginians prepare for homeownership through our free first-time home buyer classes. These accomplishments would not be possible without the partnership with others who share in our mission. Thank you, VAR, for all that you do to help us make quality, affordable housing a reality for so many Virginians.

VIRGINIA HOUSING DEVELOPMENT AUTHORITY 877-VHDA-123 // VHDA.COM

V I R G I N I A AS S O C I AT I O N O F R E ALTO R S ® L E A D E R S H I P T E A M President Mary Dykstra, ABR, CRS

MKB, REALTORS , Roanoke, VA ®

President-Elect Brad Boland

Keller Williams Realty, Reston, VA

Vice-President Deborah Baisden, GRI

Prudential Towne Realty, Virginia Beach, VA

Treasurer Bill White

Joyner Fine Properties, Richmond, VA

Immediate Past President Trish Szego, CRB, CRS

ERA-Elite Group, REALTORS®, Fairfax, VA

Chief Executive Officer R. Scott Brunner, CAE

Virginia Association of REALTORS®, Glen Allen, VA VAR thanks our Association Partners. Information sourced from multiple listing services across the state with data compiled by R E Stats Inc. All information is deemed reliable but is not guaranteed. Figures might not match those reported elsewhere.

P U B L I S H E D B Y T H E VI R G I N I A AS S O C IAT IO N O F RE A LTO RS ® The Virginia Association of Realtors® (VAR) is the business advocate for real estate professionals in Virginia. VAR represents more than 29,000 Realtors® active in all phases of real estate brokerage, management, development and appraisal. Our mission is to enhance our membership’s ability to achieve business success. All inquiries regarding this report should be directed to: Stacey Ricks, Director of Public Relations Virginia Association of Realtors® 10231 Telegraph Road, Glen Allen, VA 23059 (804) 249-5716 Stacey@VARealtor.com VARealtor.com/HomeSales Economic Regions CENTRAL VALLEY CENTRAL VIRGINIA HAMPTON ROADS/CHESAPEAKE BAY NORTHERN VIRGINIA ROANOKE/LYNCHBURG/BLACKSBURG SOUTHSIDE VIRGINIA SOUTHWEST VIRGINIA

Central Valley:

Albemarle, Augusta, Bath, Buena Vista City, Charlottesville City, Fluvanna, Greene, Harrisonburg City,Highland, Lexington City, Nelson, Rockbridge, Rockingham, Staunton City, Waynesboro City

Central Virginia:

Amelia, Buckingham, Charles City, Chestereld, Colonial Heights City, Cumberland, Dinwiddie, Goochland, Hanover, Henrico, Hopewell City, King and Queen, King William, Louisa, New Kent, Nottoway, Petersburg City, Powhatan,Prince Edward, Prince George, Richmond City, Sussex

Hampton Roads/Chesapeake Bay:

Accomack, Chesapeake City, Franklin City, Gloucester, Hampton City, Isle of Wight, James City, Lancaster, Mathews, Middlesex, Newport News City, Norfolk City, Northampton, Northumberland, Poquoson City, Portsmouth City, Southampton, Suffolk City, Surry, Virginia Beach City, Williamsburg City, York

Northern Virginia:

Alexandria City, Arlington, Caroline, Clarke, Culpeper, Essex, Fairfax, Fairfax City, Falls Church City, Fauquier, Frederick, Fredericksburg City, King George, Loudoun, Madison, Manassas City, Manassas Park City, Orange, Page, Prince William, Rappahannock, Richmond, Shenandoah, Spotsylvania, Stafford, Warren, Westmoreland, Winchester City

Roanoke/Lynchburg/Blacksburg:

Alleghany, Amherst, Appomattox, Bedford, Bedford City, Botetourt, Campbell, Covington City, Craig, Floyd, Franklin, Giles, Lynchburg City, Montgomery, Pulaski, Radford, Roanoke, Roanoke City, Salem City

Southside Virginia:

Brunswick, Charlotte, Danville City, Emporia City, Galax City, Greensville, Halifax, Henry, Lunenberg, Martinsville City, Mecklenburg, Norton City, Patrick, Pittsylvania

Southwest Virginia:

Bland, Bristol City, Buchanan, Carroll, Dickenson, Grayson, Lee, Russell, Scott, Smyth, Tazewell, Washington, Wise, Wythe

S O UR CES 2012 Month-to-Month Virginia Home Sales // 2009-2012 Scott Rogers, Analyst/Consultant, Virginia Association of Realtors®

Today’s Housing. Let’s Keep a Good Thing Going Laura Lafayette, CEO, Richmond Association of Realtors®

+8% Change of Home Sales // 2011 VS 2012 Scott Rogers, Analyst/Consultant, Virginia Association of Realtors®

Virginia Economics Chris Chmura President and Chief Economist, Chmura Economics and Analytics

Regional Changes Home Sales // 2011 VS 2012 Scott Rogers, Analyst/Consultant, Virginia Association of Realtors® Home Prices in Virginia Scott Rogers, Analyst/Consultant, Virginia Association of Realtors® Virginia Price Distribution in Home Sales // 2011 VS 2012 Scott Rogers, Analyst/Consultant, Virginia Association of Realtors® Annualized 2009-2012 // Quarter-to-Quarter Scott Rogers, Analyst/Consultant, Virginia Association of Realtors®

Regional Changes in Foreclosures // 2012 Quarter-to Quarter C. Theodore Koebel, Ph.D., Professor, Urban Affairs and Planning and Senior Associate, Center for Housing Research, Virginia Tech Governor’s Letter Robert F. McDonnell, 71st Governor of Virginia The Banking and Mortgage Lending Environments Richard Owen, Executive Director, Virginia Mortgage Lenders Association Bruce Whitehurst, President and Chief Executive Officer, Virginia Bankers Association

Zipcars, Student Loans and “Generation Rent” Andrew Kantor, Editor and Information Manager, Virginia Association of Realtors® Federal Reserve Bank of Richmond Speaks Real Estate Sonya Ravindranath Waddell, Regional Economist, Federal Reserve Bank of Richmond R. Andrew Bauer, Regional Economist, Federal Reserve Bank of Richmond The Advantage “Just Below” Pricing Eli Beracha, Ph.D., Assistant Professor, Finance and Real Estate, University of Wyoming College of Business Dr. Michael J. Seiler, Director, Institute for Behavioral and Experimental Real Estate, Old Dominion University

V I R G I N I A A S S O C I AT I O N O F R E A LTO R S ®

速

Thank you to our partners across Virginia who contributed to the Pieces of Home 2012 Virginia Housing Report:

VIRGINIA ASSOCIATION OF REALTORS 速 10231 TELEGRAPH ROAD GLEN ALLEN, VA 23059 TEL (804) 264-5033 // VAREALTOR.COM

V I R G I N I A A S S O C I AT I O N O F R E A LTO R S 速