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Easier Financing
“I know things are beginning to pick up because the mortgage brokers are coming to see me," Day said earlier this week.
When interest rates rose to 18 percent two years ago, the nation’s housing market nearly came to a dead stop. People stayed where they were because they couldn’t afford to move.
Day remembers it was easier in Rappahannock because “it has remained possible to buy because of owner financing and not having to depend on banks.” Yet the two year crunch still “slowed potential buyers who didn’t realize they could buy here without banks. ”
Most local mortgages go through banks in Warrenton, Manassas or Winchester, Day added. She says she sees “very little VA (Veteran’s Administration) or FHA (Federal Home Administration) in this county.”
Day explained FHA housing specifications would exclude many county homes. For instance, houses without indoor plumbing could not qualify for FHA loans, she noted.
VA loans assess “pooints” against the seller, Day added. Since there is such a demand for land in Rappahannock, owners would rather wait and sell to a buyer who will pick up all the points.
However, Day careftilly noted that the desirability of land in Rappahannock doesn’t mean investors can make a quick killing in real estate. Property “is still a great investment, but it’s a long term investment,” she said. There’s often a big difference between the asking price and selling price, she added. In fact, after reviewing all land transfers during the past six months, she noted that in nearly every case “the sales price is considerably less than the asking price.”
People can’t expect to make a profit in two years the way they did during the ’70s, she said.
One of the reasons is that there are “more educated buyers now.”
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