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

A Quick Minute of Motivation

In this motivational series, I’ll highlight how YOU can become a Peak Performer. As we close out 2020, its a great time for you to focus on the “R’s”: Refocus, Recharge, Rejuvenate and most importantly Reflect on your accomplishments of 2020. Check out my latest Peak Performer message for my thoughts on this important topic and ideas to focus on for 2021.

Need more motivation? Give me a call at 703-652-5777 or email at scottmacdonald@remax.net 

FOLLOW MY NEW FACEBOOK PAGE for more motivation, success tips, and inspiration: https://www.facebook.com/SuccessSecretsforRealEstate/ 

December 2020 Market Update

As we close out 2020…

A lot has transpired since the last newsletter… a presidential election, Covid-19 outbreaks resulting in additional shutdowns, local jurisdictions reverting back to more restrictions on public gatherings, regional school districts canceling or staggering the return to the classroom, and of course, Thanksgiving. Luckily, we had great weather on Thanksgiving and could eat outside with our “at-risk” family members and maintain social distancing with them throughout the day.

Interest rates remain low on the real estate front; fewer people are re-engaging in forbearance on their mortgages, and houses are still selling – often with multiple offers. All in all, it’s a great market not only in Northern Virginia but around the country. 

As we enter the holiday season, inventory levels remain low, making it difficult for buyers looking to take advantage of great rates. We are only 9% below last year’s level of homes for sale during this same week in time. As I look back, this was the beginning of the inventory shortage in our area. It will be interesting to see if we match our low from this past January when we had just over 1,800 houses for sale. If you are considering relocating, downsizing, or upsizing, call me to see how we can help you get into a home. We have strategies for every market to help people become homeowners.

So, the question I am often asked this time of year is, should we sell our house or wait until the spring. My answer is – it depends. Do you need to sell, or do you want to sell? If you sell, where will you go? If you have to sell and have the next home secured or have living arrangements lined up, sell today. If you are looking to sell to take advantage of the market, we need to talk sooner rather than later. As I previously mentioned, rates are great, purchasers are out in the market looking to buy, we know what other houses are for sale right now versus the springtime, and we know what price we can get for it based upon recent sales. Also, in all likelihood, if the house is in great shape, is in an ideal location, and is priced right, it will sell quickly with little inconvenience to the seller. If you find yourself in this situation, please call me to discuss your situation in more detail.

Until next year, be safe, make wise decisions when going out in public so you remain healthy so you can celebrate the holidays with your loved ones.

November 2020 Market Update

Thankful

This year was definitely a different experience for the kids and Halloween…some treats, but it seemed like it was mostly tricks for them because of Covid. Hopefully, next year will be different, and they can enjoy being kids again, safely. The election was also a different process than we have ever seen before, and the counting of the results also has led to a “unique” time for us. Let’s hope we won’t have to experience a process like that one again. Fingers crossed that the recent announcement by Pfizer and Biontech regarding their vaccine will result in us getting back to more normalcy in our lives. Time will tell.

In the Northern Virginia real estate market, we continue to see treats for sellers and some tricks for buyers. Our issue continues to be low inventory levels for buyers, making it tricky and, often, multiple offers, which ends up being a treat for sellers. Interest rates continue to remain at historic lows, making it a treat for those looking to buy a home or refinance their existing property (or properties if you are an investor) – a true treat for them. If you have questions about refinancing, please let me know. I will be happy to connect you with a great loan officer.

What does the future hold? I see continued low inventory, low rates, and a competitive market. Some markets have advantages over others. For example, Cascades has 3,000 townhouses, and only one is for sale. There are thousands of townhouses in Bristow, and only one end unit is available under $400,000.  These markets are truly in the sellers’ favor as buyers are having difficulty getting into properties in these locations. There are many more like them, but these are two I am familiar with as we were helping them price their homes for the market this week. For those considering selling, I don’t see a real slowdown happening like we usually do during the holidays as the weather is great, rates are phenomenal, and demand remains high. Please call me to discuss your situation in more detail.

Please have a wonderful Thanksgiving. I believe we can all find things to be grateful for even though we are not in a “normal” world and have experienced so many rare situations this year. 

Be safe, continue to make wise decisions when you go out in public, so you remain healthy!

A Quick Minute of Motivation

In this motivational series, I’ll highlight how to become a Peak Performer. Question – are you giving back? With the holiday’s coming up, now is a great time to give back to your community. Check out my latest video message to learn more on why I feel it is so important to give back to others. 

If you are looking for an opportunity to give back, don’t forget that Giving Tuesday is on December 1st this year. Need a great charity to support?  Consider donating to Children’s National Hospital/Children’s Miracle Network Hospitals. We have a long standing relationship with our local Children’s Hospital and gladly support them as often as we can. We are excited to announce that we were able to raise $10,000 for them at our Charity Golf Outing back in September. We presented them with the check today!

Need more motivation? Give me a call at 703-652-5777 or email at scottmacdonald@remax.net 

FOLLOW MY NEW FACEBOOK PAGE for more motivation, success tips, and inspiration: https://www.facebook.com/SuccessSecretsforRealEstate/