September 2020 Market Update

Here Comes Fall (and all things pumpkin spice)

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.

I hope you have a great Labor Day!

May 2020 Market Update

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Hopefully, you and your loved ones are staying safe and healthy during these unprecedented times. As previously mentioned, real estate is considered an essential business and as such, we have adapted to new ways of conducting business. Yes, homes are being purchased, sold, and leased – people need shelter. We are lucky as we can help those in need of our services. Due to the different lockdown restrictions, many of my friends across the country and around the world cannot help people with their housing needs. It is strange to me how in some areas, lenders, title companies, home inspectors, appraisers, and other professionals are considered essential, but REALTORS are not.  Not to being political here but how can REALTORS not be deemed essential and the others can be? How can they conduct their business without a REALTOR selling the house prior to needing their services?  Odd to me.

Locally, we are practicing all real estate services albeit on a more limited basis and in a different way.  We are doing virtual showings for buyers who do not want to go out to see homes in person. We are conducting virtual open houses and scheduling appointment only showings during the virtual open houses. Settlements are outside or even drive up style – many with no REALTORS present.  We are also seeing e-closings with no one present in the same room. We are wearing masks, gloves, and booties during showings and bringing disinfectant wipes and hand sanitizer – for everyone’s health and safety. If you are considering buying, selling, or leasing a house, it is still possible and I am willing and able to help, so let’s discuss how this all works in more detail.

Now, let’s talk numbers. Inventory levels remain low – 34% below this same time last year. We currently have only 2,974 houses for sale in all of Northern Virginia. Contracts written the previous 30 days are down 31% versus the same week last year. Lastly, closings the previous 30 days are down 20% from the same time last year. Now, the good news is sales have gone up each of the last four weeks and when houses do come on the market, they sell quickly when priced right and they are in the right condition.  We continue to see multiple contracts in many homes throughout the area as well. We have had many buyers move to the sidelines during the pandemic and some sellers have decided to wait or have pulled their homes off the market until “the coast is clear”. One thing is for certain, we will have a lot of pent up demand for housing when we return to a new normal as we have more buyers on the sidelines than sellers. I envision an even more competitive housing market in the future.

Be safe, make wise decisions when going out in public so you and your family remain healthy.

February 2020 Market Update

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Unusual February Weather

The weather in February is heating up just like the Northern Virginia real estate market.  The Spring Market is in full swing and should continue because Punxsutawney Phil didn’t see his shadow and therefore, I think this market will continue to stay on fire.

All jokes aside, we are still experiencing unusually low inventory levels, tons of buyers in the marketplace and in many cases, multiple offers on properties. This situation leads to frustration on many levels as some buyers are missing out several times on homes.  The reasons vary, but many are because of their loan qualification levels, shortage of homes for sale in their price point (so there is increased competition), their cash availability and in some instances, not wanting to waive contingencies. Sellers get frustrated because they hear of these types of situations and they are not receiving multiple contracts, or they don’t believe prices have escalated high enough. The other possibility is that they are not receiving contracts at all. Unfortunately, these circumstances happen often as sellers may not have been educated by their agents as to what to expect of the market in their price point and location – many times they do not lend themselves to be in these situations. Other times, they have started their price too high and discerning buyers realize the escalated price is already “built-in” to the sellers original sales price.

Additionally, many houses are already overpriced, and buyers are not willing to even make an offer. As I always say and today it is still evident, you need to be in the right condition and priced right to sell. A high price is always a deal killer. If you are thinking about selling, I can walk you through the market you can expect to be in now and potentially in the future.

Lastly, agents can be frustrated – like me – because other agents don’t educate their clients about the market. Inventory is 30% below where it was this time last year. There are only 1,881 total houses for sale in all Northern Virginia. Lower price points have the highest number of buyers and therefore the highest potential of multiple offers. Agents are showing clients houses priced at $450,000 when the buyer only qualifies for $425,000 and needs closing cost assistance. Guess what?  It’s not going to happen in today’s market. Same for a buyer who has a top end of $450,000. Don’t waste their time it’s not going to happen. Lately, the lower price point properties have been receiving upwards of 25 contracts and are escalating thousands to tens of thousands above list price. Buyers need a knowledgeable agent to educate and set proper expectations when buying in today’s competitive market. You can win, but you need the right agent. Call me if you or anyone you know is looking to buy or sell a home.

I hope you are all taking advantage of these great February temps! Get out there and have fun!

December 2019 Market Update

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Wow, did November fly by or what?  It seems like I just sent my November newsletter and here we are in December already – crazy to me for sure. November brought a few substantial changes in our industry. First is the way we must now market our listings. The ability to pre-market homes as we know it has gone by the wayside. Previously, we could use signs, online marketing on social media sites, real estate websites, networking events and/or email campaigns to get the word out about future listings either days, weeks or months in advance. Now, we must put the home in MLS within one business day as active or in “Coming Soon” status once the property is marketed to the public in the aforementioned ways. It is more consumer-friendly as it opens up all houses to the buyers and it also gives sellers maximum exposure to all buyers by sharing the properties with all agents. Before this new rule, there were agents who would privately market homes to the detriment of the seller and potential buyers. This change will also provide accurate data in MLS for sales information, so we all know what sales prices and concessions are and inform us if the sale was an arm’s length transactions or not.  This is helpful for pricing houses for both buyers and sellers as well as appraisers. To learn how this can affect you when deciding to sell your house, give me a call, I’m happy to share more details.

The second area is financing houses and loan amounts. Here is a brief history of what FHFA has done since 2016 with conventional loans: back in 2016, the FHFA increased the conforming loan limits from $417,000 to $424,100. Then, the next year, the FHFA raised the loan limits from $424,100 to $453,100 for 2018. And in 2018, the FHFA increased the loan limit from $453,100 to $484,350 for 2019. Lastly, just last week, the new loan limits will be $510,000 for 2020. Jumbo loans will now go up to $765,600 in our area. Jumbo loans typically have higher interest rates. Please call to learn more about how this can help you when buying or selling a house.

Also, VA loans no longer have a limit, but they do have liability issues which can affect the amount of your loan going forward. If you are a veteran, your eligibility will drive your maximum loan amount. In addition, the funding fee for zero-down loans will be 2.3% of the loan amount in 2020, up from 2.15% for regular military in 2019. The fee for subsequent use loans will be 3.6% of the loan amount, up from the current 3.3%. You can pay the fee upfront or roll the cost into the loan. These go into effect for any loan that closes after January 1, 2020. Again, if you have any questions at all, please call me.

I hope you have a safe, fun and festive holiday season with all of your family and friends!

November 2019 Market Update

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Happy Fall!

The change in the weather has not changed the real estate market here in Northern Virginia. We still have a limited supply of houses for sale with lots of demand. Houses are selling quickly when priced right, are in the right condition and in a desirable location.  In all of Northern Virginia (Arlington, Fairfax, Loudoun, Prince William, and Fauquier Counties plus all of the cities in between – Alexandria, Fairfax, Falls Church, Manassas, etc.) the median days on market are just 14. As you can see, properties are selling quickly! The important thing to note however is prices are not drastically increasing with this supply and demand issue and when prices do get “pushed” we are having appraisal issues. It is important to price your house properly so if you are considering selling, please call me to discuss the right pricing strategy for you as each market is different.

During this time of year, people always ask, is now a good time to sell? My answer is – yes – if you need to sell. If there is a situation in your life that dictates the need to sell, list your house now. As I mentioned, we have a strong demand for houses. There is only a 1.5 month’s supply of housing right now. Also, we know that inventory levels are very low, only 3,855 resale houses are for sale today, so we know what the competition is for you. Who knows who will be selling in the spring and how this will affect pricing? We also know that rates, although they increased slightly this week, they are still great.  At this time, a buyer can get a 30-year fixed-rate at under 4% which is phenomenal.

Additionally, houses that are decorated for the holiday season often show better and, in some cases, give the buyer ideas on how they can enjoy the holidays in the house as well. A nice staging technique that can go a long way.  So, again, if you are thinking about selling and want to know if you should wait or list today, please call me.

I hope you have a festive Thanksgiving with your family and friends!

October 2019 Mid Month Market Update

Here’s your latest real estate market update for Northern Virginia. Inventory is low, it’s a seller’s market! And with interest rates still at an all-time low, not is a great time to buy!

What do you think? How is the market in your area?

Thinking of buying or selling? I’m happy to provide you with a free market analysis if your home. Give me a call to talk about your specific situation and needs. Call me at 703-652-5777 or email at scottmacdonald@remax.net

September Market Update

My whole career I have been asked, “So, how’s the market?” Well, this year and more specifically, in the last few months, I have been asked this even more. It is a loaded question because it depends on whether you are a buyer, a seller, or if you are looking to rent and most importantly where you are looking to do any of these types of transactions.  After we clarify what they want to know, I find it is a lot of curiosity because people love to talk about real estate. It also is of interest to them because in our discussions I hear things like, “I don’t see any for sale signs in my neighborhood”, “when houses go up for sale in my area, they sell right away”, “my friend is looking for a house and they are losing out on multiple contracts” and many other similar comments so there is a genuine interest in “How’s the market”.

Overall, in Northern Virginia, the inventory on active resale homes is down over 31% from last year and units sold are virtually the same which means it is extremely competitive to be a buyer and if you price your house correctly, you can be a very happy seller. As always it is a hyper-local market so let’s take a deeper dive into the counties.

  • Arlington County – the Amazon Effect is keeping inventory low, median days on the market extremely low but interestingly enough, prices are not as high as you would think considering the supply and demand in that area. Closed sales are down as inventory is down and prices are up just 4%. Houses sell quickly – median days on market are just 9!
Statistic Jul YoY MoM
Total Sold Dollar Volume 182,179,254 down5.9% down7.5%
Closed Sales 266 down9.5% -0.4%
Median Sold Price $616,000 up1.3% +9%
Average Sold Price $684,884 up4% -7.2%
Median Days on Market 9 days down75.7% 0%
Average Days on Market 30 days down40% -16.7%
  • Fairfax County – Prices are up Year over Year but down Month over Month which indicates sellers are starting off too high and then making adjustments to get them sold. Days on market for Median Days and average days indicate a strong market but remember, price is critical to getting houses sold today. Closed sales are up Year over Year but are down Month over Month.
Statistic Jul YoY MoM
Total Sold Dollar Volume 1,027,443,963 up7.9% down5.9%
Closed Sales 1,680 up6.5% -4.8%
Median Sold Price $539,900 up2.3% -4.4%
Average Sold Price $612,668 up1.5% -1.1%
Median Days on Market 17 days down56.4% +6.3%
Average Days on Market 33 days down31.3% +6.5%
  • Loudoun County – the market in Loudoun is slowing a little as they are experiencing what other regions are – Year over Year gains but Month over Month declines. Median Days on Market jumped MoM but prices are maintaining in the area.  There is lots of pent up demand in Loudoun – stay tuned on their progress.
Statistic Jul YoY MoM
Total Sold Dollar Volume 408,811,460 up8.4% down2.8%
Closed Sales 747 up1.8% -1.2%
Median Sold Price $512,250 up8.5% -0.5%
Average Sold Price $549,478 up6.9% -1.4%
Median Days on Market 23 days down39.5% +43.8%
Average Days on Market 38 days down34.5% +22.6%
  • Prince William County – consistent with the other counties showing price reductions but an overall strong market as sales are strong and Days on Market are low. Prince William offers the lowest prices so more value!
Statistic Jul YoY MoM
Total Sold Dollar Volume 318,271,988 up5.4% down1.5%
Closed Sales 778 down0.4% 0%
Median Sold Price $385,000 up6.9% -2.5%
Average Sold Price $409,616 up5.9% -1.8%
Median Days on Market 24 days down41.5% +14.3%
Average Days on Market 38 days down19.2% +5.6%

Remember, within the counties, there is also a deeper dive that needs to be taken into consideration in neighborhoods and price points. Hopefully, this gives you a better idea of what is happening in our real estate market in Northern Virginia.  If you have any questions or concerns or if you are looking to make a move, please feel free to call me.

June Market Update

The Summer Market is Upon Us!

It is hard to believe we are already through the Memorial Day holiday weekend. Time is really flying this year – at least it seems that way to me. Kids are home from college, summer jobs have started, weekend pool parties are in full swing and the real estate market is just as busy as it has been all year. Let’s start with the amazing mortgage interest rates that continue to tumble downward. They are now well into the threes for 30-year fixed rates and are expected to go down even further. This makes now a great time to buy a home! It can still be a challenge to find the right house, as inventory levels remain extremely low – 19% below last year this same week and nearly 30% below what was on the market two years ago. What is also amazing is that sales are up with inventory levels being down. Through April (latest available data point), there was one more sale this year than last year…one more is one more than before. I believe that interest rates will continue to foster sales through the summer as inventory will come on the market. Let’s talk about your plans if you are considering selling – we can position you properly to take advantage of today’s market.

All this being said, the market is not good to all sellers. The reason for this is some sellers are under the belief that their property will sell regardless of price and condition. We are seeing a lot of unrealistic prices on properties, as well as houses in disrepair or in need of substantial work to get the prices sellers are asking. We have seen average prices up over last year by 2.75% which is great, but it is not 2.75% per month like some sellers are pricing their houses at today (and “hoping” to get for them).

From a buyer’s prospective, we are still in a price conscience market. Buyer’s are concerned about paying too much and are analyzing prices closely, especially if they are using a professional REALTOR and not the internet to help them buy a house. The internet is not the way to buy a house today or anytime. The guidance and expertise of a real estate professional is more important today than ever before. If you are considering buying, we should talk sooner rather than later so give me a call.

Have a great June – enjoy the graduation parties!

May Market Update

I’m Still Amazed…

The real estate market never ceases to amaze me. We have weeks, months and years where sales go up and down, prices go up and down, inventory goes up and down, but now, we are dealing with people’s emotions going way up and way down – including real estate agents. The lack of inventory in some areas have resulted in buyers losing out multiple times on their home of choice. They become frustrated and make irrational decisions on prices, terms or location. These decisions will have an impact on their financial lives as well as their quality of life (including potentially longer commutes). When clients lose out on offers multiple times, agents get frustrated too, either because the clients don’t listen on how to position themselves or with other agents believing they were treated unfairly during the negotiations. This is why it is imperative to work with an experienced agent to help you navigate through this emotional time in real estate. An agent that has been there before, understands what is going on and can provide the right advice so you (or someone you know looking to buy) get the proper guidance and the house you want – without getting tied up in the emotion adding stress to the situation. Well, guess what? I have been through these types of turbulent, emotional times and I can lead you or someone you know through these situations, just call me.  I will help everyone stay calm and focused on the eventual task which is getting the house sold.

Keeping with the amazement theme, we still have very low inventory levels – 20% below last year’s levels. This is creating the type of market I just mentioned. Unfortunately, sellers are not immune to the emotions of selling. Unrealistic expectations of timing, pricing and response times from buyers/buyer agents make for stressful times during selling. It is important to have the right expectations when selling a house, mostly to keep the seller on an even keel. Once again, I am here to help provide the right advice, guidance and emotional balance to get you through the home selling process, just give me a call. I am happy to help!

Have a great Memorial Day!

hello spring

 

March Market Update

The Spring Market has Arrived!

The Spring Market has sprung into action! Although inventory levels are down, activity on listings is up, open house visitors are abundant and multiple contracts on listings are happening more frequently throughout Northern Virginia. In Arlington and close in locations, we are seeing contingencies getting waived and huge escalation clauses for buyers to win contracts. It is a good sign for our market to have such great activity and I expect it to continue for the next few months.

All this being said, pricing properties properly is still paramount to success in getting houses sold. Along the Route 1 corridor close to Amazon’s HQ2 people are definitely “future pricing” their houses. Their hopes to cash in are not bearing any fruit and I don’t believe this pricing strategy is going to get them sales any time soon. At this time, pinpoint accuracy in pricing is the strategy to undertake. Do not price for negotiations. Do not price higher because the neighbor received multiple contracts (as not all listings with multiple contracts are going above list price as I mentioned last month’s newsletter).

If you are a buyer, do not despair, we can help you find a house even in the low inventory market dynamic that we are currently experiencing. Although we are below 3,000 active houses for sale in Northern Virginia, the pace of houses coming on the market for sale is increasing each week. We also have access to “Coming Soon” properties through our network of professionals whom we deal with on a regular basis. Having someone scout out properties for you before they officially hit the market is extremely important, so please feel free to call me to discuss this in more detail.

Don’t forget to set your clocks ahead this month and get out there and enjoy the longer days!

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