Author: Scott MacDonald

Scott MacDonald http://scottymacsblog.com Scott MacDonald is a real estate investor, real estate broker and owner of RE/MAX Gateway with five office locations to serve Northern Virginia and the DC Metro areas, headquartered in Chantilly, Virginia, with additional full-service offices strategically located in Fairfax, Alexandria, Haymarket and Warrenton. 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 and new home sales and developed his skills as a Broker. In 2001, he embarked on a new course and 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 four 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.

February 2025 Market Update

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The Northern Virginia real estate market continues to be full of surprises. Looking back at 2023, home sales in our region outpaced expectations, despite the challenges posed by higher interest rates. Many predicted rates would decrease, leading to increased sales. However, as rates remained elevated, the market didn’t slow down in Northern Virginia the way it did in other parts of the country.

Nationally, 2024 started with home sales dipping below 4 million — the lowest since 1995 and even lower than in 2023. However, projections indicate a modest rebound of about 2% this year, pushing sales back above the 4 million mark. Mortgage rates, which spent much of the past year above 7%, have recently settled in the mid-6% range. While some forecasts suggest rates may decrease, they are expected to remain between 6-7% for the foreseeable future.

Beyond interest rates, other factors could impact our housing market. Changes in administration policies, trade negotiations with Canada and Mexico, and potential tariffs could influence the cost of new construction of new homes, particularly as they relate to lumber and building materials. In addition, how will recent resignations impact the Northern Virginia real estate market? While widespread resignations don’t seem likely in many cases, the push for employees to return to the office could influence housing decisions. Some may choose to move closer to their workplace, while others might seek new job opportunities elsewhere, leading to shifts in housing demand across the region. These discussions and corporate restructuring may further shape the market, as professionals weigh the benefits of relocating for career stability or exploring opportunities in different areas.

With so many moving pieces in today’s market, having the right guidance is more important than ever. While the market has been challenging over the past two years, we’re seeing growing confidence among buyers and sellers. Many are adjusting to today’s interest rates, recognizing that real estate remains a solid long-term investment. The key to success in this market is understanding the trends, staying informed, and working with an experienced real estate professional who can help you navigate the complexities with confidence.

If you’d like to discuss your real estate goals, have any questions or want to discuss how these market changes might affect your plans, don’t hesitate to reach out. We’d love to help — give me a call anytime!

January 2025 Market Update | Another Year in the Books – Reflecting on 2024 and Looking Ahead to 2025

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Another year has come and gone, and what a year it was! So much happened—and some things didn’t happen as predicted—that it was a whirlwind for the real estate industry. The most significant changes came with updates to our industry practices, particularly regarding commissions.

One major shift was that commissions are no longer allowed to be published in MLS systems or websites connected to them. Additionally, buyers and agents are now required to sign an Exclusive Right to Represent Buyer Agreement before viewing homes. While this has been the law in Virginia since 2012, it’s now more crucial than ever to determine how an agent’s commission will be paid if it isn’t negotiated within the contract. On the bright side, these changes have brought greater transparency to how real estate professionals are compensated.

What Didn’t Change in 2024?

Despite widespread predictions, interest rates did not fall as expected. Many anticipated rates would dip into the mid-5% range, but they stayed elevated throughout the year, even reaching the mid-7% range. This kept many homeowners from selling, resulting in continued low inventory instead of the expected rise in homes for sale.

As a result, sales remained flat compared to 2023 and may even show a slight decrease when final numbers come in. Similarly, while some forecasted a drop—or even a “crash”—in home prices, the opposite occurred. Prices increased, which added to the wealth of homeowners. However, rising prices and rates made affordability a significant challenge, especially for first-time buyers.

Another area where expectations fell short was regarding Federal Reserve rate cuts. While many predicted six cuts in 2024, there were only three. I felt six was ambitious, so I predicted three, which turned out to be correct.

What’s Ahead in 2025?

Here are my predictions for the coming year:

  • Mortgage rates will remain volatile but slightly lower by year-end, likely in the high 5% to low 6% range.
  • Inventory levels will remain low but improve slightly as more baby boomers age in place and homeowners stay “rate locked” in their current mortgages.
  • Home prices will continue to rise due to low inventory and strong demand.
  • Affordability will remain a significant challenge, especially for first-time buyers.
  • The Fed will cut rates three times, fewer than predicted earlier.
  • Fewer agents will remain in the business due to declining transactions and commission compression.
  • Homeowner’s insurance rates will rise due to the impact of natural disasters, making insurance harder to secure in some areas.
  • Unemployment will increase slightly but remain below 5%, leading to a softer labor market.
  • Inflation should stay manageable, in the range of 2.5–3%, supported by Fed actions and economic conditions.
  • Now more than ever, having a Realtor® represent you is critical to navigating the evolving real estate landscape.

As we step into 2025, it’s clear that the real estate market will continue to present its challenges, but with the right guidance, opportunities abound. Whether you’re looking to buy, sell, or simply understand how these changes affect you, I’m here to help. Together, we can navigate this ever-changing market with confidence.

Here’s to a prosperous and fulfilling 2025 — Happy New Year!

December 2024 Market Update

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And just like that, the holiday season is here! Another year is almost in the books — it’s amazing how quickly time flies. So, what’s happening now in the real estate market, and what might we expect in the months ahead? Let’s dive in.

Currently, the demand for housing remains strong. Even during Thanksgiving weekend, buyers were actively attending open houses and scheduling showings across the area. Interest rates have stabilized, and buyers seem to be adapting, even as prices remain at record highs. Why are prices climbing despite higher interest rates? It all comes down to inventory — or the lack of it. While lower inventory is typical during this time of year, we’re seeing even fewer homes available than in many recent years, excluding last year. This scarcity is putting upward pressure on prices.

Looking ahead, the real estate market will largely be shaped by interest rates and potential shifts in policy as we approach 2025. If rates decrease, demand could increase, driving prices higher and creating a more competitive market. Conversely, higher rates could lead to reduced demand, longer listing times, and potentially stable or lower prices. Adding to the mix, a new administration on the horizon brings the possibility of impactful policy changes. Historically, new leadership has often introduced initiatives to stimulate the housing market, such as programs to boost inventory, encourage homeownership, or make financing more accessible. While specifics remain uncertain, both interest rates and policy shifts will play key roles in shaping a potentially exciting and favorable environment for buyers and sellers alike.

On another note, you might wonder if now is a good time to sell your home. The answer depends on your situation. If you need to move soon, now is a great time. Buyer demand is high, and those looking during the holidays are typically serious buyers, not just browsers. Additionally, homes often look their best when decorated for the season, which can help make a strong impression. However, if you simply want to sell, waiting until after the holidays could be beneficial, as the buyer pool isn’t likely to disappear unless rates climb significantly. Either way, I’m happy to discuss your options and help you decide the best path forward.

As we wrap up the year, I wish you and your loved ones a joyful holiday season filled with warmth, laughter, and cherished memories. Happy Holidays! 

November 2024 Market Update

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With so much conflicting information about today’s real estate market, I’d like to share my perspective to clarify where we truly stand. Many buyers are holding off until after the election to make a move, but this may not be in their best interest. Historically, home prices tend to rise by around 5% in the year following an election, while interest rates often decrease, inviting more buyers into the market. This increased demand can drive up competition, especially with the limited inventory available. Waiting could ultimately mean higher prices and more competition. The savvy buyer would benefit from acting now rather than later.

Contrary to some beliefs, a significant drop in home prices is unlikely. For prices to decline, we’d need a large influx of inventory—something we’re not seeing. Homeowners are staying put longer, often tied to favorable interest rates, and most are only selling for significant life changes. Additionally, distressed properties, which historically have lower prices, are nearly absent. With 40% of homeowners owning their homes outright and 50% of mortgage holders having over 50% equity, the market remains stable. Since 1942, prices have only declined in six years, five of which were during the Great Recession. Outside of that, price drops have been rare and minimal.

For sellers, while the market may have slowed compared to the recent frenetic years, it remains active. The average days on the market have increased slightly—by only two days over last year. Meanwhile, sales increased by 14% compared to the same period last year, reflecting a steady buyer interest. Although rates have edged up recently, experts anticipate they’ll settle in the 6% to 6.5% range by early next year, potentially dipping into the high 5s by the end of the year.

As we approach the holiday season, remember that this time of year brings unique opportunities for buyers and sellers alike. Many choose to wait until the new year to make a move, but those who take action now may benefit from less competition and more favorable conditions. Whether you’re looking to buy or sell, having accurate, up-to-date information is essential. Please reach out if you or someone you know is considering a move – we’d be glad to help you navigate today’s market with confidence.

Wishing you and yours a very Happy Thanksgiving!

October 2024 Market Update | Why Fall 2024 is Perfect for Buying or Selling Your Home

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I often get asked whether now is a good time to buy or sell a home, so let’s look at each scenario and break it down.

If you’re thinking about selling, consider the reasons behind your move. Is it for a job relocation? Are you retiring or needing more (or less) space? Maybe a life change, like marriage or a family transition, has prompted you to think about selling. If you’re motivated by one of these reasons, now is a great time to sell.

Why? Because inventory levels are low, which means less competition for you as a seller. Plus, interest rates are currently at their lowest point in two years, so buyers are out there looking! If your home is priced well and in good condition, you’re in a strong position to sell. And with fall in full swing, buyers are eager to make a move before the holidays. It’s a time when people are focused on settling in before winter, which can make for motivated and serious buyers. If you’re ready, this season offers a perfect window of opportunity to sell your home.

Fall is often considered a sweet spot in real estate. The weather is cooler, making it more comfortable for buyers to view homes, and the natural beauty of fall can showcase your home in its best light. The changing leaves, cozy atmosphere, and crisp air help buyers picture themselves settling into a new space before the holiday season kicks off. Plus, homes tend to look even more inviting with festive fall décor, making them easier to envision as a place for family gatherings and celebrations. Selling in the fall allows you to tap into buyers’ desire to find a home and get settled before the hustle and bustle of the holidays.

For buyers, fall is also a fantastic time to make your move. Interest rates have dropped, and there are homes available in a variety of price ranges and locations. The demand is strong, and if rates dip further, it could lead to even more competition, making it harder to find the right home. Prices are still rising, though at a slower pace, so waiting could mean paying more down the road. Fall also offers a cozy, beautiful backdrop for house hunting—imagine finding your dream home before Thanksgiving or the first frost! If you find a home that fits your needs, is in the right location, and works with your budget, now is the time to act! Remember, if rates fall, you can always refinance later. As the saying goes, “Don’t wait to buy real estate; buy real estate and wait.”

If you have any questions or want to discuss your situation further, feel free to reach out today. Let’s make this fall season the perfect time for you to achieve your real estate goals!

September 2024 Market Update

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As we step into the beginning of fall with cooler temperatures and apple-picking season in full swing, the Northern Virginia real estate market is also experiencing some noticeable changes. While mortgage rates have dipped by nearly 1% since June, this hasn’t yet brought a rush of eager buyers back into the market as we initially expected.

Instead, we’re noticing a trend: homes are staying on the market longer than they used to, and the flurry of multiple offers is becoming a thing of the past. Homes that once sparked bidding wars are now sitting on the market a bit longer, prompting sellers to reconsider their pricing strategies and expectations. To set the right price, it’s important to closely watch local trends — such as the number of competing properties, recent foot traffic, and how long homes are staying on the market.

One reason for the slower pace is the uncertainty around the upcoming election. As we enter an election year, many potential buyers are taking a “wait-and-see” approach. Economic policies proposed by key political figures, such as Vice President Kamala Harris’s suggested $25,000 credit for homebuyers, add another layer of complexity to the decision-making process. Additionally, there is some confusion around buyer agent compensation due to a recent commission lawsuit. Many buyers mistakenly think they need to cover down payments, closing costs, and their agent’s fees, which is rarely the case.

There’s also a belief that mortgage rates might drop further in the months ahead. If rates do continue on a downward trend, it might act as a double-edged sword. While lower rates could spur demand, they could also cause potential buyers to hesitate, hoping for even better rates. Waiting too long to buy, however, could mean facing higher prices if demand increases against our current low inventory.

For sellers, this evolving market means adjusting your strategy is key. With multiple contracts becoming less common, proper pricing, timing, staging, and marketing are essential to making your home stand out. Overpricing in this market can result in a longer time on the market and missed opportunities. If you’re thinking about selling, call me to learn how we’re helping our clients our sellers maximize their pricing and time on the market.   

While the market is showing signs of a slight slowdown, there are still opportunities for strategic sellers who stay informed and adaptable. The coming months will reveal more as we see how the election, the economy, employment trends, mortgage rates, and consumer confidence shape our real estate landscape.

Stay tuned for more updates, and enjoy the beginning of this beautiful fall season!

August 2024 Market Update

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As we enter August, the real estate market isn’t as hot as the weather we’ve been experiencing this year. Despite this, it remains a strong seller’s market, though the intensity has cooled slightly compared to earlier in the year. You may recall from previous newsletters that we saw sight-unseen offers significantly above the list price and multiple offers waiving all contingencies. While sight-unseen offers have become less common, we still see multiple offers, though it may now be only two or three rather than five to ten. Additionally, buyers are now able to negotiate contingencies, which I believe is a positive development.

With kids heading back to school soon, families might consider moves aligning with school district boundaries. This time of year often prompts discussions about relocating to be closer to schools or settling into a new area before the academic year kicks off. Whether you’re contemplating a move or thinking about selling, this seasonal transition can influence housing decisions for many families.

Looking ahead, there are several factors that might influence the market this August. First, Joe Biden’s withdrawal from the presidential race and Kamala Harris, now the Democratic nominee to run against Donald Trump could affect buyers’ decisions. We’ll have to watch how this impacts sales trends compared to previous years. Despite inflation dropping to 3%, Federal Reserve Chair Jerome Powell has opted not to lower the Fed rate, which could have future implications. There is speculation about a potential rate cut in September, followed by additional cuts in November and December. While this seems aggressive, we will see how it unfolds. Mortgage rates did decrease steadily in July, now standing in the high 6% range, but this didn’t result in a surge of sales, which was unexpected. It might be attributed to the seasonal slowdown we typically see in the summer months, especially now that we are past the pandemic period.

I will provide updates on August’s sales next month, so stay tuned for more information. Additionally, mid-August brings changes in how buyer agent compensation is advertised, which could impact sales, buyer representation, and seller decisions regarding compensating buyer agents. These are indeed interesting times, and I will keep you informed about these developments.

As always, I am here as a resource for you, whether you are considering selling or buying. Feel free to reach out to discuss your situation in more detail. Additionally, if you purchased a home in the last year, now might be a good time to refinance your loan! Contact me to discuss your interest rate options. Stay cool!

July 2024 Market Update

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As we reach the halfway point of the year, it’s remarkable to see how quickly time has flown by. Looking ahead to the second half of the year, one major event stands out: the Presidential Election in November. How might this impact the housing market?

Historically, home sales typically decline by about 10% in October and November. However, during election years since 1963, this drop has been more pronounced, averaging around 15%. As a result, we can expect to see fewer home sales this year. The silver lining is that the year following an election generally sees an increase in both home sales and home prices. This trend creates opportunities for sellers, though it may pose challenges for buyers due to higher prices impacting affordability.

Another factor to consider is the potential decision of the Federal Reserve to lower the Fed Rate. Many economists are predicting this move due to easing inflation and a softening job market. While this won’t have a direct impact on mortgage rates, it could indirectly benefit them. It’s worth noting that the Fed has made rate adjustments in every election year since 1980, except for 2008 when rates were at 0% due to the aftermath of the Great Recession.

Interest rates have been declining over the past few weeks, ranging between 6.5% and 6.75%. Lower rates continue to spur demand, as evidenced by the high turnout at open houses and the multiple offers on homes, particularly those priced at $650,000 and below. This trend is likely to persist through the end of the year.

It’s been an eventful year for real estate, and significant changes are on the horizon, especially with new regulations stemming from the Missouri lawsuit. It’s crucial to stay informed and navigate this journey together. As always, I’m here to assist you in any market, whether you’re buying or selling real estate. Stay cool during these hot summer days ahead.

June 2024 Market Update

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What do you think the real estate market will be like this summer? Will buyers be experiencing the summertime blues with a lack of inventory, interest rates in the 7% range, increasing prices, and strong demand from other buyers, keeping it a tight seller’s market? Will sellers do the right things to sell their homes by properly pricing their house, staging so it is ready for market, and be able to choose from multiple buyers, making it difficult for some people to become homeowners?

Will interest rates come down with the spread between 10-year yield and 30-year fixed interest rates coming closer together? If this happens, will more people put their homes on the market because they won’t have as much mortgage rate lock-in effect? Will inventory increase because the only thing people like about their house is their interest rate, and they are ready to move? Will buyers stay put if rates don’t come down because of affordability issues?

The most consistent theme in these questions is interest rates, right? Yes, but also inventory. These are the major factors that dictate the real estate market and, of course, pricing. If we see fewer houses on the market coupled with lower rates, we will see more buyers and higher prices. If we see higher rates, we will have fewer buyers and, hence, more inventory, so prices will moderate and, in some cases, may come down.

Nationally, we are seeing more houses for sale, but locally, we have only slightly more inventory than last year, which is way below the 5-year average for active homes for sale. Again, demand remains high in our area, insulating us from broader market trends and news headlines about the real estate market around the country. That’s why having a knowledgeable agent is crucial to understand local market conditions and trends. If you or someone you know is looking to buy or sell a home, I am here to help.

Please feel free to reach out to discuss my answers to the questions above. Enjoy the long days and warm temperatures!

May 2024 Market Update

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The Spring housing market is starting to warm up here in Northern Virginia. Inventory of homes for sale is finally on the rise, as are sales. This April marked the first time we have had more inventory of homes for sale than we did the same month last year. The last time this happened was when there were more houses for sale in 2015 than in 2014 in April.  That is 9 years of month-over-month declines in active houses for sale year over year – it’s pretty amazing to me. In 2014, we had 6,145 homes for sale in Northern Virginia and in 2015 we had 8,247. Since then, the inventory of houses for sale every week and every month dropped when comparing the previous year. We ended April with just 1,676 houses available to home buyers, and last year we ended April with 1,529.  

The good news is that with more inventory, we have more sales. Buyer demand is not being deterred by higher rates, at least not yet. We continue to see more than 50 people through houses on the first weekend they are for sale, and we have had as many as 75 people through open houses.  Multiple contracts continue to be the norm more than the exception. On another nerdy number note, during the previous three weeks, we had more than 700 contracts written in the previous 7 days. This was the first time this has happened since July of 2022.  If rates were lower, this number would be substantially higher as more buyers would be coming out of the woodwork to become homeowners.

I previously mentioned buyers are not deterred by higher rates.  Regarding this statement, everyone should be prepared for rates to stay in this range for the foreseeable future.  The economy is doing well, jobs are being created and inflation is now moving higher than expected so the Fed is not inclined to reduce their rates.  As such, mortgage rates are and will stay elevated.  If you recall, generally when the Fed raises the federal funds rate, it can put upward pressure on longer-term interest rates, including the yield on the 10-year Treasury bond, as investors anticipate higher borrowing costs and adjust their expectations for future inflation and economic growth accordingly.  Mortgage rates are tied to the 10-year treasury so with this information we should expect mortgage rates to stay higher than expected.  If you have any questions about this, feel free to reach out to me.

Have a great rest of your spring, and as always feel free to call me to discuss your situation in more detail if you are looking to sell or buy in this competitive market!