As we near the end of July, I thought I would provide a little insight into our Northern Virginia real estate market. Inventory of resale properties has been very stable throughout the late spring and into mid-summer at 7,636 houses for sale. What has caught my attention is the number of properties that have gone under contract the previous 30 days. At the end of May, 3,500 homes had gone under contract the previous 30 days. Since then, that number has declined every week to where we just had 2,880 homes go under contract the last 30 days – a 17.7% decline. Does this cause us to panic? Probably not, we are in prime vacation season. We had the 4th of July holiday during this timeframe as well. Plus, sales are cyclical and summer is usually a slower time of year for us. Nonetheless, we will continue to see if this a more serious trend as we move forward into late summer and fall.
This decline in sales has resulted in a slightly larger month’s supply of homes. We currently have a 2.7 month’s supply of house up from the end of May’s 2.1 month’s supply. Again, no need to panic as it is still as seller’s market. We continue to see when sellers price their houses to sell, have it staged properly and are in the right condition they sell in a reasonable amount of time. In fact, we have experienced several situations where homes had received multiple contracts on them.
Distressed home sales continue to hover around the 15.5% of total inventory active and on the market for sale. In these numbers, we have seen a slight decline in short sales and a slight increase in foreclosures. What continues to baffle me is that distressed property sales make up 30.7% of the home sales the previous 30 days. This tells me that people want to say they bought a short sale or foreclosure because they believe it is a “deal” when often times they are not deals at all.
Our rental market continues to be strong for landlords. We currently have a 1 month’s supply of rentals available. Houses that used to take weeks to rent in the past are renting in just days. Additionally, these homes are, in most cases, renting for more money. The market continues to be prime for investors.
Builders in the area are still selling as well. Loudoun County along the Greenway is selling exceptionally well. What we are seeing in the new home sales arena is that houses that are priced right – just like resales – are selling. Overpriced builders whom have not responded to the market are languishing on the market just like the resale properties. As mentioned in previous blogs, we are in a very price sensitive market today.
Let’s review the national real estate news, housing starts rose to a 5 month high – up 15% from May. The FTC won’t enforce the MARS rule against Realtors who help consumers obtain short sales – this is good news as the paperwork was unnecessary and didn’t apply to Realtors. And the Helping Responsible Homeowners Act is gaining additional support. This Act will eliminate barriers blocking millions of non-delinquent home owners from refinancing their mortgages at today’s incredibly low interest rates. This will help stabilize neighborhoods by keeping people in their homes.
As long as interest rates remain low, foreclosures and short sales remain a low percentage of our market, we will continue to have a steady real estate market in Northern Virginia. Get it? Got it? Good!
Now, go sell something!