June 2022 Market Update

Lately, we’ve been having conversations with each other, our clients, and others in the industry both locally and around the country to better understand what is happening today in the real world and the Northern Virginia real estate market. Lots of questions are being asked. Do we have a housing bubble in Northern Virginia? Are prices going to crash? When are prices coming down? Should I wait for prices to drop before I buy? Why is it taking longer to sell a house? How high will rates go? Should I sell (or buy) now or wait? 

In my opinion, prices will not be escalating at the rate they were previously. Those dramatic price increases were not sustainable. There may be pockets where prices decline, but we still have high demand at most price points.

Additionally, our price increases were not as drastic as in other parts of the country. According to the FHFA Top 100 Metropolitan Markets Ranking, we rank 99 out of 100! Other parts of the country will see higher price drops, but our area should remain stable. We will not have a “housing crash” in Northern Virginia. 

Don’t wait to buy real estate – buy real estate and wait. Buy because of your lifestyle, needs, and wants – and not strictly because of prices. Buy for the long term, not the short-term gains. Yes, the market has slowed down. Buyers are not “rushing” into buying decisions like they were previously, but remember – that type of market cannot be sustained. It is still a seller’s market. It’s a good thing when a house is on the market 7-10 days.  

If you are thinking of selling soon, give me a call. Rates are going up on 30-year fixed mortgages, but you do have alternatives – most notably, adjustable-rate mortgages and buydowns. The adjustable-rate mortgages are a great option and not what they were when the real estate market crashed in the past. Buydowns give you another option, with lower than 30-year fixed rates. Let’s discuss why these are often viable options for buyers. If you are looking to sell or buy – now is a great time, so call me to learn more.

Enjoy the last few days of Spring before the summer heat kicks in!

May 2022 Market Update

There is one thing that the real estate market never fails to provide us with: change. The change can be gradual, or it can be swift. The change we are experiencing today was fast and unpredictable as it is not a broad-brush change in the market. There are pockets where we have recently gone from 75 to 100 showings in a weekend to fewer than eight, while other markets have 45 showings in two days and ten offers. There is no rhyme or reason for the disparity in the activity levels and the number of contracts. However, the one thing I do know is that price is critical in getting a home sold. If you are considering selling, bear in mind that the last several months of sales have already escalated your price to where you should not expect a huge jump in pricing.

Additionally, you should not overprice the house, as buyers are more discerning and conscious of pricing. This being said, we are still seeing prices go 10% over the list, but these occurrences are more the exception than the rule as it was just a month ago. Obviously, the rapid increase in interest rates has affected the market, but they have not caused a crash or bubble. What the increase has done is made people reconsider price points and payments. Therefore, the sudden rate increase is no reason for the slowdown in some areas. In my opinion, it is a combination of factors, as there is still high demand for housing. Another factor besides rising rates could be buyer fatigue; purchasers may be tired/frustrated with losing out multiple times on offers. Maybe it’s the lack of inventory in their price point or looking at overpriced houses and houses in poor condition. Or it could have been spring break and the holidays; only time will tell. Or perhaps it is just a lull like we saw last August to November before skyrocketing through April.

In a recent conversation with a lender, they said they wrote 80 pre-approval letters for one buyer. In most cases, lenders are writing between three and five letters for buyers before they end up successful or out of the market. All this being said, my experience, research, and due diligence can provide you with the right advice to make the best decisions when selling or buying a home. I am here to help, so give me a call.

Have a safe, fun, and Happy Memorial Day with friends and family to appreciate those who have sacrificed their lives so we can live ours.

April 2022 Market Update

How about this weather? Cold temps, blustery winds, snow, sleet, and sometimes sunshine and warm temperatures all on the same day. It’s so crazy; I can’t figure out what to wear today! These conditions remind me of the real estate market in Northern Virginia this last month. One house had 100 visitors and multiple contracts in two days; another had 15 visitors and one contract in four days – in the same neighborhood one week apart. We also have a house that has been on the market for more than two weeks with just a handful of showings and no ratified contract. As I always advise, you must have the house in pristine condition, priced right, and in a great location to get the most activity as well as contracts. If you think you can sell anything in this market, you are far from reality.

The real question of the month is, “when should I put my house on the market?” Interest rates have impacted the market as they continue to rise. We’ve had the most volatile few weeks of increases, with rates topping out at over 5%. This has some buyers looking to buy sooner rather than later (many believe rates will continue to rise), and they want to get in today. Another aspect to consider when I’m asked this question is the number of houses for sale – especially in your neighborhood. Overall, in Northern Virginia, inventory levels are down 29% from this same time last year – but inventory is rising. I also consider pricing when answering this question. Prices are up over 9% from last year, but with rising interest rates, inflation, and more homes for sale, price increases will not be as substantial as earlier this year. My answer is simple – get your house on the market sooner rather than later. Call me today if you are considering selling and want to see how this impacts you.

So how does all this impact buyers? If you are financially stable to buy a home, don’t wait – just go for it. Remember to buy for the right reasons – lifestyle, distance to work, and schools to name a few, just don’t forget what your why is. Don’t expect mortgage rates or home prices to come down because neither is going to happen for the foreseeable future. Waiting will cost you more. As the saying goes, ‘don’t wait to buy real estate; buy real estate and wait.’ If you are thinking about buying, call me, and we can discuss your situation in more detail.

In the meantime, have a great spring. Hopefully, the weather will begin to normalize soon!

March 2022 Market Update

For me, the word of the month is ‘strategize’…and that’s because the real estate market is moving fast and furiously. If you don’t have a strategy, you will not be adequately positioned as a seller or a buyer. If you are a seller, do you fix up your house or just list it in its current condition? Do you price it low and hope for multiple offers? Do you price it at market and expect a few offers – or maybe just one? Or do you price it high and hope a frustrated buyer is willing to pay any price?

If you are a buyer – do you use an escalation clause? Do you waive all contingencies? Do you offer a free Post Settlement Occupancy Agreement? Do you want to add an appraisal gap statement? Do you take it “as is”? So many questions need to be addressed; each situation is different and should be analyzed individually. The good news is that I have the answers for you, whether you are looking to sell or buy in today’s market, who you work with matters!

As you know, not every house will sell just because of the market. You still need to have the right strategy to get it sold. On the flip side, a strong offer can position you to win over multiple other contracts with the right strategy, so call me to discuss your situation in more detail. I am always here to help.

I am getting many real estate-related questions lately – will the rising interest rates hurt the market? Will the market be impacted by the Feds increasing their rates overnight? Will the Ukraine situation slow down the real estate market? Will rising gas prices impact real estate? How does rising inflation affect the real estate market? So many good questions. Here are the answers – at least the ones I have today. Mortgage interest rates remain at historic lows, and as a matter of fact, they are below where they were before the pandemic started. Mortgage rates would have to get to the 6% range before they began to impact the market, and the government won’t let this happen. Presently, rates are at 3.75% for conforming loans – a reasonable rate, in my opinion. The Fed rate increases do not directly impact mortgage rates, so this will not be a considerable influence. Rising gas prices may hinder a few first-time buyers from entering the market (they are budget-conscious overall), but this will not slow down home buying demand. Inflation may hinder some people from buying, but in the end, it won’t affect our market. We are receiving multiple offers across all price points, so we will still have a robust real estate market even if half the buyers drop out. Lastly, if it gets worse, the situation in Ukraine may impact housing. At this time, it is helping to bring rates down, but it hasn’t slowed demand or slowed price appreciation. Only time will tell, but all is good on our real estate front right now.

There are many scenarios and questions out there but know that I am here to help answer them. Just give me a call to discuss everything with you!

Happy St. Patrick’s Day!

February 2022 Market Update

Didn’t that feel like the fastest January ever? I blinked, and it is already February. It seems like we were just celebrating New Year’s Day yesterday. It must be the pace of the real estate market that makes time fly. This January’s housing market has been the hottest on record. Last month 45% of homes found a new homeowner within two weeks and 35% received a contract within one week. As demand remains strong, the question is – will we have enough inventory to keep up with this demand? Time will tell. If you have thoughts of selling or know someone who wants to sell, now is the time to act. Currently, we only have half a month’s supply of housing available. This means that if no new homes came on the market, everything would be sold in two weeks!

The National Association of Realtors says that a 6-month supply of homes is a balanced market. Do you know when the last time we had a 6-month supply of houses was in Northern Virginia? I have been keeping weekly records since March of 2005, and the most supply we have had per month is 4.3 – and that was in January of 2009. At that time, we had 10,129 houses for sale in Northern Virginia. Today we have only 1,069 resales available. Because inventory is so low, we see multiple contracts on virtually every listed home and have showings back-to-back all day long. I had more than 50 showings on the last home I sold. That means 49 buyers are still looking for a home in Haymarket in the $725,000 price range. If half of the buyers get buyer’s fatigue, there are still 25 people looking for a home.

Things didn’t even happen like this last year when the market was so frenetic. This market will take time to settle down. Since 1981, the average age range of a first-time buyer has been between 28 and 32; there are 23.5 Millennials in this age group today.

Even though the competition is stiff, we can still help if you are considering buying. We have developed strategies to help you “win” in multiple contract situations – just give me a call to learn more!

Happy Valentine’s Day!

January 2022 Market Update

Happy New Year to you and yours! We are kicking off the new year with a serious demand for housing in the Northern Virginia real estate market. The weekend before Christmas, I wrote a contract for clients on a house in South Riding – it was the only house for sale in all South Riding at the time. In three days, there were over 150 showings and 34 contracts submitted. The house was only 2,500 square feet, had an unfinished basement, and was priced at $750,000 – crazy! The Monday after Christmas, I put a home on the market in Virginia Run. The sellers positioned the house in great condition to maximize their price. In the end, we decided to price it at $800,000. It was one of only two homes in all of Virginia Run for sale at that time. In two days, we had over 30 showings and multiple contracts resulting in a sale in which the buyers waived all contingencies, paid way over the list price, and offered settlement in just two weeks.

I believe we are entering yet another frenzied market as we head into 2022. On New Year’s Eve, I ran the numbers for our market once again, and we are now at another all-time low for inventory of resale homes in Northern Virginia. In the counties of Fairfax, Arlington, Alexandria, Loudoun, Prince William, and Fauquier, there are only 1,119 properties for sale. People say, “oh, it is just that time of year; inventory is always low now.” Looking back over the last five years, we have averaged 2,901 houses for sale this week – a huge difference, especially with all of the demand. I believe we will be in for quite a ride in real estate in 2022.

Here are my predictions for 2022 in real estate:

· Inventory will remain low –  if you have nothing to buy, you won’t sell, so inventory will stay low

· Homeowners will continue to renovate/remodel as a result of low inventory

· Demand will remain strong – 45 million Millennials between the ages of 26 and 35, which are prime home-buying years

· New home sales will be flat as construction costs, and labor constraints will hold sales down

· Prices will increase once again – it was 9.5% in 2021; I think we will be in the 6% range in 2022

· Interest rates will increase but only slightly – 3.11% at year-end 2021; I think they will go to 3.75%, which is still below pre-pandemic levels

· iBuyers will continue to increase their market share in all areas of the country

· Inflation will remain high…I think in the 6-7% range in 2022 – hopefully no higher

· Demand for rentals will remain strong, and prices for rentals will continue to rise

· Covid will continue to be an issue as well as a threat and continue to impact supply chain, which will impact the overall US economy. This, in turn, will influence people’s home buying and selling decisions.

So, there you have it – let’s check back in January of 2023 to see how I did on my predictions.

Happy New Year!

December 2021 Market Update

It’s the Most Wonderful Time of the Year….

Wow, it is the holiday season already! This year has gone by so fast. I hope you had a great time with your family over Thanksgiving and continue to enjoy this month full of fun for the upcoming holidays and into the New Year.

As I run into family and friends at neighborhood events and gatherings, the conversation frequently turns to the real estate market. The most common question I am asked is, “how is the market today?” My latest response is a good one; from a historical perspective, it’s insane (in my opinion)! Inventory of homes for sale in our area has dropped to only 1,886 homes for sale for the first time during this time of year. Additionally, new sales contracts written the previous seven days were the second-highest ever; only 2020 had more contracts written.

Typically, approximately 415-460 contracts are written during Thanksgiving week; we had 653 this year! Demand continues to outpace the supply by a wide margin. So, this leads me to the next question I usually get asked, “should I sell my house during the holidays?” My answer remains; it depends. If you really need to sell, now is a great time as inventory levels are low and demand is high. Houses typically “look” festive this time of year which is an added staging bonus.

The important aspect to keep in mind is that pricing still needs to be on point for a house to sell, even in the environment we are currently experiencing. If you are looking to “cash-out” and take advantage of the market, now is not the best time to sell as buyers are still being very selective when choosing a home, and price is always high on the list along with condition. This is not the time of year to push prices. If you want people coming through during the holidays, it is 100% up to you. So, if you are considering a move now or in the future, please call me.  We can get you positioned for success.

Have a great holiday season with your family and friends!

November 2021 Market Update

Groundhog day in November?? It seems that way to me in the day-to-day operations of running a real estate business. What we continue to hear over and over is – “wow, the market sure has slowed down,” but I am here to tell you that it hasn’t. The number of sales is higher today than at any other time in Northern Virginia during this same time in previous years. The pace is not as frenetic as it was early in the year, but the numbers are still strong (versus any other year since I started keeping track of the numbers in 2005). Houses are staying on the market for an average of 18 days now versus 14 days previously. Does this mean the market is slow? Not at all.

In 2008, we had an 11-month supply of houses – nearly 330 days on market. That was a slow market; this one is not. It is important to keep everything in perspective and have the right expectations when selling your house. If the house is in the right condition and priced properly, your house will sell. It may not have double-digit contracts, it may only have one, and it may take a couple of weeks, but it will sell as we continue to have a high demand for housing. 

So, what does this mean from the buyer’s perspective? With low inventory levels, some buyers are still facing challenges. As I mentioned, we are not seeing many double-digit contracts on listings. However, we still see some homes receive multiple offers, so it is essential to put your best foot forward when making a strong offer. We can give you the right advice to make your offer stand out, so call me to discuss your plans for moving. 

Interest rates are creeping up, and prices are creeping up, so the cost of ownership is increasing. If you are considering a move, don’t delay. Instead of waiting a few months, buying now could make a few hundred-dollar difference in your mortgage payment. It’s time to get off the fence.

I hope you have a wonderful Thanksgiving and enjoy the start of this holiday season.

October 2021 Market Update

Wow, I blinked, and September has ended. Time seems to go by faster and faster these days; it is just crazy to me. As I mentioned last month, we are still busy helping buyers and sellers with their real estate needs. The market is still outperforming other recent, non-pandemic years as far as sales and prices are concerned by wide margins. Call me if you want to know the exact numbers. 

The overall pace of sales is very close to last year’s pace for this same timeframe.  However, the number of sales year-to-date in Northern Virginia is up over 24% versus 2020. In addition, sales prices are up over 11%. It is not as frenetic as earlier this year, but the numbers prove we still have a robust real estate market here locally. I recently read that the average Virginian has gained $50,000 in equity since last September. I am sure that number is higher here in Northern Virginia, as our prices far exceed the rest of the state. Real estate is truly a great way to build wealth, so spread the word if you know of anyone looking to become a homeowner – we can help.

More good news – we are not seeing evictions, foreclosures, or prices tumbling as had been predicted by many in the media. People are taking advantage of rental programs to stay in their homes.  The number of individuals in forbearance has dropped again – only 1.5 million people remain in the program. Loan modifications reached a 15-month high in September, which means people will stay in their homes after forbearance timelines end, and as I previously mentioned, prices are up.  Now, prices won’t skyrocket like they did earlier this year, but home prices will experience a more moderate escalation, as will home values. The reason is, although we have more inventory than last year, we still have historically very low levels of inventory. Couple this with strong demand, and we will see values increase; all good news and a more healthy market.  If you have any questions relating to buying or selling, please feel free to call me.

Have a great season and enjoy these comfortable Fall temperatures! Happy Halloween!

September 2021 Market Update

As is often the case with the media, the headlines they provide do more to terrify than clarify. What is the truth about the eviction moratorium ending and people actually getting evicted? What is the certainty about forbearance ending and foreclosures flooding the market? What is the reality about the pricing bubble popping? Are we in a normal market? Is the market really slowing? For my thoughts and a quick market update, please continue reading.

Headline #1: The end of the eviction moratorium will result in millions becoming homeless. My response, not true. People are paying rent, and they will continue to do so. Currently, 86% of renters pay their rent on time, meaning only 14% are behind. Once faced with eviction, most of these people will start paying rent to avoid becoming homeless.

Additionally, there are government-sponsored programs – $46 Billion – available to tenants to ensure they can stay in their homes; only $5 Billion has been utilized so far. Many people have returned to work, so making payments will not be an issue for most. In my opinion, there will not be a wave of evictions as predicted by the media.

Headline #2: When the forbearance period ends, there will be a foreclosure tsunami. My response, this also is not true. There are currently 1.78 million people in forbearance. Nearly 25% of people in forbearance continue to make their payments. Just over 28% have done loan modifications, and almost 8% have refinanced or sold their homes/paid off their loans, so people are doing what they can to remain in their homes. What is worrisome is the 15% of people who do not have a plan going forward. This means 267,000 people are at risk of foreclosure. At the height of the Great Recession, there were 3.8 million foreclosures – that is a tsunami. Right now, the delinquency rate on mortgages is at the lowest level it has been since before the pandemic. Couple this with the housing prices rising nearly 14% over the last year and only 2.4% of mortgaged homes having negative equity puts people in a good position related to equity in their homes. In my opinion, people will sell and take the equity in their homes versus lose it. 

Headline #3: We are in a housing bubble, and it is about to burst. My response, I’m afraid I have to disagree. Right now, our appreciation levels are below the national average – 11% versus 14%. Demand for houses remains strong, and inventory remains low, so the result is a basic economic formula of supply and demand equals rising prices. The escalating prices we saw earlier this year are tapering down, which was needed.

Additionally, if you compare us to the cities we compete with for jobs and corporate relocations, we are priced lower than them. These cities are Seattle, Boston, San Jose, San Francisco, and New York. Therefore, we are not in a housing bubble.

Here are the numbers that prove we are not slowing down, and in fact, we are in a robust housing market compared to “normal” years, and not the anomaly we experienced during the pandemic.

Inventory in NOVA: 
2021 – 3,545
2019 – 4,283
2018 – 6,143
2017 – 6,759

Sales previous 30 day:
2021 – 3,304
2019 – 2,648
2018 – 2,448
2017 – 2,752

Month’s supply of houses:
2021 – 1.1
2019 – 1.7
2018 – 2.5
2017 – 2.5

As you can see, we are outperforming the recent “normal” years. If you are thinking about selling or buying a home, please call me to discuss your situation in more detail. Happy Fall!!