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!!

August 2021 Market Update

There is a lot of news swirling around about the real estate market today. You are probably hearing, reading, or seeing that the market has slowed, inventory has increased, buyers are taking a break, and prices will crash once forbearances end. Well, the question is – what is real news and what is not? In my opinion, we are back to a more “normal” market based upon seasonality, and the market is not going to crash – at least not in Northern Virginia. The months of July and August are typically slower times of the year for real estate, and this year is no different (other than more people are vacationing due to the pandemic and travel restrictions last year). So, this is having a slight impact on the market. Couple this with the frenetic pace of the spring market, and the media would have you think the real estate market is coming to an end. In my opinion, It is not, so you can sleep at night now.

Let’s address each issue:

  • The market has slowed. Yes, it has slowed down slightly in relation to the overheated market we discussed previously and the time of year. This being said, houses are still selling, and some have multiple offers on them. If you are selling, make sure you prepare your home in the proper condition and price it right. Now is not a time to overprice properties. Call me to discuss your situation in more detail.
  • Inventory has increased. Yes, it has. We were at near all-time lows for houses for sale in Northern Virginia, and previously, there were not enough homes for the buyer demand we were experiencing. Additionally, we are still well below what is known as a “typical” market for the number of houses for sale.
  • Buyers are taking a break. Houses are still selling, so they have not taken a break. Buyers are not competing as much in multiple contract situations, so the number of multiple offers has decreased. This does not mean the buyers are taking a break. Buyers are more discerning, and with increasing inventory, they can be. This is an excellent opportunity for buyers – more inventory and less competition. If you are considering buying, give me a call to discuss your situation in more detail.
  • Prices will crash once forbearances end. Prices will not crash… inventory is low, demand is high, mortgage rates are still fantastic, and just because an event like this occurs does not mean prices will crash. There will not be a flood of foreclosures like there were before. Too many reasons to list why, but feel free to call if you are interested in learning more.

There is lots of information out there about real estate. To make sure you are well informed, call on your trusted professional 😊 As summer comes to an end, I wish you all good luck sending kids back to school this year!

July 2021 Market Update

It is hard to believe that half the year has come and gone. It certainly has been an interesting six months in the real estate business. We encountered a frenetic sales pace that saw prices escalate tens of thousands to hundreds of thousands above list price with no contingencies and multiple offer situations, with buyers doing all they could to “win” the negotiations. Then, almost overnight, we saw the market tap the brakes. It is still a great market – we just went from 110 miles per hour to 60. Today, houses are staying on the market longer – days, not hours like earlier this year, with fewer showings and only one or two contracts instead of multiple offers. In many cases, we have been able to negotiate prices and contingencies like finance, appraisal, and even home inspections.  

So, what is going to happen moving forward? Buyers who took a break after losing out on multiple homes may want to consider getting back into the market as there is less competition, rates are still great, and prices have leveled off. Sellers need to exercise patience, price their home properly and get the house in top condition to get it sold. Previously, anything that came on the market would sell in many cases regardless of the condition; this is not the market we are in today. Buyers are more discerning when looking at homes. The property’s condition, price, and location need to be top-notch, or they will sit on the market longer.

All this being said, every situation is different and needs to be analyzed on its own merits. Some properties are receiving multiple contracts, and prices are escalating; there are just fewer of them in our current market. If you are considering a move, please call me so we can come up with the right game plan for you.

I hope you are enjoying the summer!

May 2021 Market Update

The real estate market reminds me of the great Bill Murray movie Groundhog Day. It seems like every month I am conveying the same story. Housing inventory levels are still low, we continue to have multiple offer situations, interest rates continue to stay modest, and prices are rising. Sorry, but that’s the story in Northern Virginia today, and I believe it will be for years to come. 

The good news is we continue to see additional inventory come on the market. The issue is, in most cases, we have more demand than the supply that is coming onto the market. This has some buyers experiencing “buyer fatigue” as they cannot waive all contingencies or go high enough in price to win in a multiple contract situation. In some instances, this has resulted in fewer contracts submitted in what could be a multiple contract situation and, in some rare cases, only one or two offers are received. For today’s buyers, patience is critical, but the speed of writing the offer is the key to success. If you are thinking of buying, let’s meet to discuss your plans in more detail.

If you are a seller, it is extremely important to be realistic and do the right things to get your house sold. We have seen some sellers trying to take advantage of the market by not completing the finishing touches typically done when preparing to sell their home. They are not painting, replacing carpets or flooring, making minor repairs such as caulking in bathrooms or repairing rotten trim, etc. and worst of all, overpricing their properties. Greed is not good; being sensible is as the market is not like it was in 2004-2006, where you could price properties for tens of thousands of dollars above the last sale. People who do the right things such as staging and proper pricing see the market take their sales prices higher because buyers are willing to pay premium prices for properties in the right condition. If you are considering selling, let’s get together and see what we can do to help you maximize the market.

Enjoy the spring weather and all that May has to offer.

February 2021 Market Update

Again, I have said it before, and I will repeat it, inventory levels on homes for sale in Northern Virginia are critically low! We currently have just 1,701 homes for sale in all of the counties we serve in Northern Virginia. The amazing fact is the number of condos that are currently for sale – 792 – which represents just under 50% of the total inventory. Condos typically do not reflect nearly 50% of the inventory levels … more on this later. 

Continuing with the numbers; there are only 646 single family homes currently on the market. Are you kidding me? There are only 235 townhouses total, again, WOW! Do you know what this means? The chances of multiple contract situations are possible on virtually every home on the market. We have had as many as 30 contracts submitted on one house in Gainesville priced at $635,000. It escalated above $700,000. We had another home in Aldie that had 78 showings and 62 visitors at the open house. This one was priced at $772,000 that had 21 offers and escalated to $831,700. It is insane – I cannot think of another word to describe it. 

A question I am frequently asked is when will it end? I think it will be a long time, as I believe it will be rate driven, and rates will remain low for the foreseeable future. Once rates rise to the 4 or 5% range, we will see a slowdown in contracts/purchasers, but not an inventory increase. Another question is, when will buyer burnout take them out of the market? My answer: it depends as this is and has always been an individual question. I have heard about prospective buyers writing as many as 15 contracts (on different homes) and still in the fight, while others are not even entering the market because of these “bidding” war situations. Typically, buyers will write until they win a bid on a property.  Usually, in a market like this, it has been between 3-5 times in my experience. 

One more question I hear is how do I buy if I must sell my house first? This one is more complicated, but I can give you details if you are interested. We have nine ways to make this work!

If you or someone you know would like to discuss their situation with me in more detail, whether it is purchasing or selling a home, please feel free to call me.

Have a Happy Valentine’s Day!!

January 2021 Market Update

Happy New Year!  Welcome to 2021!  I predict this will be yet another exciting year with lots of new challenges, adversity, change, and so much more. The good thing to note is out of these situations come positive outcomes for many if you keep the right mental attitude, stay adaptable, and take care of yourself and those around you. We do not know what lies ahead but keeping strong is as vital as ever.

I have been asked, “what is going to happen with real estate in 2021”?  It depends on whether you are a buyer, seller, renter, landlord, or investor. Inventory levels in Northern Virginia continue to decline. We ended the year with only 1,737 houses for sale in Arlington, Fairfax, Prince William, Loudoun, and Fauquier Counties and all the cities located within this area. As you can imagine, this number is extremely low, historically speaking. This makes purchasing a home extraordinarily difficult for buyers. I am currently working with a buyer where we have bid $30,000 over list, $40,000 over list, and $50,000 over list and on three separate houses, and we have lost out on each of them. They are in the $400,000 – $500,000 price point. The listing agents said they were overwhelmed with offers and calls – one had 17 offers in hand in less than 24 hours. So, you can see the buying environment is uber-competitive. On the flip side, this makes it a great time to sell a home if you are looking to move. Depending on the price point, location and condition, sellers can expect multiple showings as well as multiple contracts with purchasers paying more than the sales price and waiving many, if not all, the contingencies associated with a sale. Renting houses is also a challenge as there is a .4-month supply of homes available, and of those, 40% are single-family or townhouses. Again, this makes being a landlord easier to get results as there is a brisk rental market in Northern Virginia. Most investors like houses that cash flow, and with prices being bid up, many investors are choosing to wait on the sidelines to see if more inventory comes on the market prior to getting into bidding wars. Time will tell if we get more inventory or not, but I believe we will experience low inventory throughout 2021. Call me to discuss your situation in more detail so we can help you make the right decisions.

So, the market that is struggling the most right now in our area is condos. In Arlington County, 84% of the resale inventory is condominiums. The average days on the market for a condo in Arlington is 76 days and the average overall days on the market for all properties in NOVA is 16. Quite a difference, right? The rental market is remarkably similar in all of NOVA – condos are on the market for 126 days, and single-family and townhouses are on the market for 42 days. Be careful when considering an investment in condos right now.

As always, I am happy to speak with you about your situation as each one is different.  Happy New Year, and as always, be safe, make wise decisions when you go in public, so you