As we enter what is considered to be the “Spring Market” in real estate, we are lacking one thing that makes sales “spring”… houses to sell and houses to buy. We have plenty of buyers looking and many more expressing an interest in becoming home owners, but very few houses coming on the market quickly enough to keep up with this demand. Now that we enter April, let’s hope the tide turns so we can have happy new homeowners.
As of the end of March, our months of supply of homes in Northern Virginia is at only 1.1 months which is extremely low. A balanced real estate market is considered a 6-month supply of houses to sell. With these low inventory levels, the result is the increase in escalating prices. We have multiple contracts on many listings with no sales to support these prices when it comes time for appraisal. As such, we are starting to see low appraisals in some instances. The financial crisis has put pressure on appraisers to be very conservative even when you have buyers willing to pay above list price. It has always been my belief that the true market value of a home is what someone is willing to pay for a property and what someone is willing to sell for when it is an arm’s length transaction. Appraisers need to be given latitude to make this happen, not be restricted when we are in the market we are experiencing. I say this within all reason of course and don’t believe buyers should just offer any price to get a house and expect it to appraise. But with justifiable support, houses should appraise for what the market bears. Professional real estate agents should take the time to meet with the appraiser to show them all the supporting documentation and reasoning behind the value of the house. This way, all parties can move forward with the financing of the home without appraisal concerns. This is our job and what we do. Please call me to discuss if you are considering selling.
If you are considering buying, we can help position your offer to negotiate on your behalf to get the home you want, it is not an impossible task. We have helped numerous clients achieve their dream of home ownership and we can help you as well. Please call me to learn more.
Let’s hope April showers bring us more houses to sell!