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!

The real estate market is ever-changing and always evolving.  That being said, the only constant is change.  In March, the landmark case involving real estate commissions had NAR offer a potential settlement to the Plaintiffs for $418,000,000 and two changes to our business.  These two proposed changes are: (1) agents must sign a buyer agreement before showing houses. The agreement outlines what the roles and responsibilities of each party are and how agents get paid, and (2), all MLSs can no longer display buyer compensation as a field in their displays of listings.

In Virginia, it has been the law for more than a decade to have buyer agreements signed after the first substantiative conversation about real estate. At the time of the proposed settlement, only 18 states required signed buyer agreements. This practice is a good thing in my opinion.

The second proposal has added a lot of misinformation provided by – you guessed it – the media. Headlines are deceiving and often just plain wrong. Real estate commissions are not going away. They may be paid differently depending on how the seller chooses to offer compensation, but real estate agents will be paid because, as we all know, no one works for free.

Another misnomer is that prices were driven up by our fees. Nothing could be further from the truth.  Market conditions drive up prices, not our compensation. When the Fed lowered its rate to zero because of the pandemic, this caused mortgage interest rates to drop to the 2.25-3.5% range for an extended period. This caused a feeding frenzy on any house that came on the market, and prices escalated dramatically.  This had nothing to do with our commission rates. Then, the Fed increased rates drastically because inflation was rising.  That resulted in the mortgage rate lock that we have discussed over the last two years. This lock, in conjunction with more people aging in place, has lowered inventory to historical lows. As we know, low supply and high demand result in higher prices. The market drives prices either up or down, not this settlement and more importantly, Realtor fees. 

Prices will not come down because of the settlement – the market has, and always will, dictate prices.

Commissions are now negotiable. Realtor fees have always been negotiable. With this settlement and the corresponding buyer agreements needed, many people believe that sellers will no longer offer buyer agent compensation.

Sellers pay the listing agent a fee and allow them to offer part of this compensation to a buyer agent.

Many sellers have said they were not aware of this and feel if they understood it, they wouldn’t have allowed their agent to pay someone to negotiate against them. Agents need to do a much better job of explaining paperwork, the process, and what to expect as they progress to settlement. This will result in a more professional and streamlined experience, in most cases. If the seller does not allow compensation to be offered to a buyer agent, the buyer will be responsible for paying their agent. This will be a fundamental switch and many more conversations need to take place between agents and their clients about the pros and cons of offering compensation and the impact to their bottom line. Time will tell if the seller makes concessions, lenders will change to allow buyers to pay when they are a VA, FHA, or USDA buyer, and many other changes…stay tuned.

As always, I am available to speak with you about any of these changes and how they affect you if you are a seller or a buyer. Don’t hesitate to reach out, as I’m never too busy for you!

As we step into March, a time that seems to effortlessly slip by us, it’s a reminder of how fast time moves. With March comes the excitement of March Madness and the anticipation of the Final Four, alongside the gradually lengthening days that breathe renewed energy into our routines. The thrill of victory and the agony of defeat on the court mirrors the high-stakes nature of the real estate market here in Northern Virginia.

We find ourselves amidst a dynamic real estate landscape, where multiple offers on homes of all price ranges have become the norm. Within this competitive arena, some homebuyers revel in the triumph of securing their dream home, while others

grapple with the frustration of missing out. Sellers, in particular, emerge as the victors in this scenario, benefiting from limited inventory and a surplus of eager buyers.

Even with the backdrop of rising interest rates, buyer demand remains robust, painting a picture of a market in constant motion. At open houses and showings, we’ve seen a steady stream of visitors, further defining the present real estate climate. However, amidst this fervent activity, certain buyer profiles such as VA buyers, FHA borrowers, and first-time home buyers find themselves in the position of underdogs, while cash offers reign as indisputable favorites.

To bridge the gap and fulfill the dream of homeownership for all, additional housing inventory is the key. Your journey to finding your dream home doesn’t rely on luck but on a solid strategy backed by experience and insight, which I’m here to provide.

Shifting gears but staying in the spirit of competition, I invite you to participate in a free Final Four Bracket competition. Keep an eye out on my social media as it gets closer for details on how to play. Whether you base your picks on your favorite team, mascot, color, or basketball knowledge, the competition promises to be engaging and enjoyable.

Wishing you the best of luck in all your pursuits this month, whether it’s choosing your winning bracket or exploring real estate opportunities. Feel free to reach out with any questions or real estate needs at any time – I am never too busy for you or your referrals!

The real estate market in Northern Virginia continues to be in a remarkable time. First, rates continue to be extremely volatile – the jobs report exceeded expectations and rates took their biggest one-day jump in over a year. These reports will, in all likelihood, be revised downward as they typically do, but rates won’t drop as much as they increased as a result of this news. Even with the higher rates, buyers are still coming out of the woodwork. We had several homes come on the market on a Thursday, we held open houses on Saturday and Sunday, and they brought in more than 100 visitors – and with agent showings exceeding 25. As a result, you can see that buyer demand is not wavering at all. 

Another anomaly we have is the number of homes for sale. Inventory throughout the rest of the country is on the rise, up nearly 9% over this timeframe last year, and we are down 21%.

 One of the reasons for our lower inventory levels is the pace of our sales is up from last year by 8%, supporting my previous comment about buyer demand. In addition to the rise in our sales rate, we also continue to see the lock-in effect of homeowners with low-interest rates staying in their current homes longer coupled with increasing prices. These two factors make it less affordable for people to make a move and therefore, we have lower inventory. 

Where do I see the market going forward? I believe we will continue to see low inventory levels as buyers continue to flood our market. This will result in higher prices, as we are already seeing multiple contract situations and escalating prices. We have also had sight unseen offers on our listings which shows how much interest and need buyers have in today’s market. I believe we will see more new home sales with less inventory of resale properties available to buyers. Typically, new home sales make up between 10 and 12% of the market and today it is over 30%. This trend will continue in my opinion.  We are already beginning to see builder’s prices go up and incentives go down with their increase in sales activity.

So – where does the market go from here? I believe interest rates will come down as the inflation rate continues to come down. The lower rates will bring more buyers into the market because more people can qualify for mortgages.

Therefore, any homes that come on the market will be sold quickly and this will result in prices continuing to increase.  

What should you do if you are considering selling or buying a home? Call me so we can determine your best course of action.

Happy Valentine’s Day!