Motivate & Inform! Everything you ever wanted to know about the NOVA Real Estate Market
Author: Scott MacDonald
Scott MacDonaldhttp://scottymacsblog.comScott MacDonald is a real estate investor, real estate broker and owner of RE/MAX Gateway with four office locations to serve Northern Virginia and the DC Metro areas, headquartered in Chantilly, Virginia, with additional full-service offices strategically located in Fairfax, Gainesville, and Lorton. Scott specializes in residential real estate.
Scott began his career in 1988 with Shannon and Luchs, a regional company, which at the time was the third oldest real estate firm in the country. He left there to work with Prime Properties based out of Fair Lakes in Fairfax, Virginia. It was a company tied to one of the most renowned developers in the area, The Peterson Companies. There he learned about land development, new home sales, and developed his skills as a Broker. In 2001, he embarked on a new course, joined the RE/MAX network, as an owner of RE/MAX Gateway. He has built his business on providing excellent customer service, enabling clients to achieve their goals and thus feel confident in referring others to RE/MAX Gateway. This same level of commitment to his clients has carried over to how he treats his agents and helps them to succeed in today’s ever-changing market. Through Scott’s extensive knowledge and experience, RE/MAX Gateway is able to provide the tools, systems, and training to make the agents thrive under any market conditions. RE/MAX Gateway is an award-winning organization that has grown to 5 offices and is highly regarded in the industry as a leader in the Northern Virginia real estate market. We are the premier agent and business development real estate company in Northern Virginia. Bringing balance to your Real Estate business to take your life to the next level.
Throughout his career, Scott has received numerous accolades including a nomination for REALTOR of the Year and induction into the RE/MAX Hall of Fame. With over 30 years of experience, Scott is highly regarded for his real estate expertise, as the RE/MAX International Convention Speaker in both 2002 and 2007, a panelist for a National Association of Realtors focus group on RPAC, has served on the Northern Virginia Association of Realtors’ Board of Directors and has been selected as a RE/MAX R4 2014 convention panelist on the how-to of “Maximizing Office Profits”. Most recently, Scott was recognized as one of the 2019 Top Real Estate Newsmakers by RIS Media and he received the Outstanding Leadership Award from NOVA Real Producers Magazine.
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Real estate continues to be the shining light in the current economic recovery. Buyer demand, housing prices, and new and existing home sales continue to be strong – not only in Northern Virginia but also across the country. Our issue continues to be low inventory levels for the demand that we are presently experiencing. As of today, we have 30% less inventory of homes for sale versus this same time last year. The median days a house stayed on the market in August was just six days, so as you can see, demand is there.
Additionally, prices are up year to date 7.95% over last year’s pricing. The pandemic pushed the housing market back about three months, so what would typically be a slower time of the year is one of our strongest. If you are considering selling, now is an ideal time as we couple all this data with the fact that we have the lowest interest rates in the history of tracking. Contact me to discuss your situation in more detail if you are considering selling.
So, where is the market headed into the future? There is talk of another foreclosure crisis that could lead us into a Great Recession… will this happen? There is a housing bubble, and prices are going to crash… will this happen? My answer is no to both. First, we have low inventory levels and high demand. In October 2006, we had just under 23,000 houses for sale; today, we have 3,014. If properties are foreclosed on by banks and released to the market, they would sell quickly and not put us into a housing crisis. Again, back then, we had a 10-month supply of houses, today we have a .8-month supply of houses – a considerable difference. Back then, people “walked away” from their homes because of price drops and lending practices; this is not going to happen now. Today’s loan products, loan qualifications, and lending guidelines are nowhere like what they were prior to the Great Recession.
Back then, we had exotic loan programs, 100% financing programs, teaser rate loan products, and just bad underwriting guidelines. Homeowners today are more financially stable, which will result in fewer foreclosures. If there is an area that may be in jeopardy, it would be in the Mom and Pop landlord arena. Basically, people who have one or two investment properties may not be able to “carry” the houses if their tenants are unemployed. This is a small segment, so I don’t see it significantly impacting our market.
Additionally, prices are rising, but not at the rate they were in 2004 – 22% year over year increases, 2005 – 24% price increase year over year and in 2006 it was 23%. As I mentioned, we are at a reasonable pace of 7.95% today; therefore, I do not foresee a crash in prices like we saw in the past. We will see a decline in housing price increases, but not a decline in prices… big difference. Our market is stable and will continue to be so for some time, in my opinion. If you would like to discuss this further, please feel free to call me.
Enjoy the weather! Have a safe and Happy Halloween!
In this motivational series, I’ll highlight how to become a Peak Performer. Today’s question – how are you demonstrating your value? What are you doing to add value to others lives Learn why I feel this is SO important in my latest Peak Performer Series message.
The Global Pandemic has not slowed down the real estate market here in Northern Virginia. Low inventory levels continue to be the main issue as there are many buyers in the market and not enough homes to purchase. Couple this with historically low-interest rates, and we have a solid seller’s market, which also means we have an extremely challenging buyer’s market. Today, the median days on the market are just six days, and the average days on market are only 19. Now, of course, there are some properties in specific locations and price points that are staying on the market longer, but generally speaking, most houses are selling quickly. Buyers need to make decisions swiftly and make solid offers if they want to be in the running as the next owner of their home of choice.
In today’s market, we do have some additional challenges, not just the shortage of homes for sale. A remarkably close second challenge we are experiencing involves the lending process if the buyer does not select the right lender. For example, we are encountering long lead times for appraisals, lack of urgency to close loans on time (they treat the purchase transactions like a refinance and the loan is in the order it was received,) numerous appraisals coming in low as buyers are escalating prices above market price and response time frames from the loan officer as they are overwhelmed with refinances. As a side note, it is extremely important to select the right lender when you are accepting a contract on your listing or when you are buying your home. The highest offer is not always the best offer.
Additionally, we have a lot of stress in the market. Buyers are losing out on multiple homes, which causes frustration. Sellers not receiving offers as high as they believe they should make them anxious. Agents can be rude, arrogant, unresponsive, and unprofessional, which causes everyone to stress out. It is so important today to hire the right agent to guide you through the home selling or home buying process, an agent that knows how to navigate with you for a smooth and seamless process. So, if you are looking to sell or buy a house today, call me – I have helped many others successfully buy and sell properties in today’s unbalanced market.
In this motivational series, I’ll highlight how to become a Peak Performer. Mindset reminder – are you in a growth mindset or a fixed mindset? Learn why I feel this is important in my latest Peak Performer Series message.
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