Wow, where did September go? It was a very interesting month – kids went back to school, football season started, the weather has changed, the housing market remained strong and the government shut down for the first time in 17 years.
It will be interesting to see how the stock market reacts to the government shutdown, what the impact will be on rates, the housing market and how long it lasts. If it is a quick shut down, we will probably see little reaction in the stock market and as a result, rates and the housing market. If it is a prolonged shutdown of a few weeks or more, the stock market will have a negative reaction, rates will rise as bond yields decrease and we could see a loss of momentum in the housing sector of the economy. What will happen to government backed loans in process and how will it affect settlements? None of these are helpful to our economy since the housing recovery leads the economic recovery as a whole. At this time, it appears as if this could last longer than just a day or two so let’s get prepared for a rocky economic road the next few weeks.
Let’s talk about the real estate market in September. We did see a pickup in sales over last year in Northern Virginia. Inventory increased slightly which gave buyers more choices. As inventory increased, distressed properties made up a lower percentage of this increase which is great for home owners. New home sales continue their strong pace of sales. Interest rates came back down as the government eased off their threat of reducing their purchasing of mortgage backed securities and we still see multiple contracts on properties in certain price points and locations.
All in all, September was a good month for Northern Virginia real estate. We need this trend to continue, so let’s hope the shutdown gets resolved more quickly than it appears it will.
If you have any additional questions or concerns, please feel free to call me directly (703) 652-5777
RE/MAX Gateway, LLC