Aside

Is it over yet? Why Northern Virginia Home Sales Went On A Wild Roller Coaster Ride

October took the real estate market roller coaster ride.

Rates went up, rates came down.  Sales went down, sales went up.  Inventory rose, inventory came back down.

Real Estate Market Roller Coaster Ride 31OCT2013

In some areas, the number of multiple contracts went down, then they went back up.  Inventory of short sales and foreclosures were down, then they rose but luckily by not too much.  The government shut down and the government opened back up – luckily, it was not too long and did not have a tremendous impact on the housing market.

Our emotions went up, our emotions came back down, as there was a lot of concern about delays in closings associated with the shut down because of the reduced number of employees at FHA and the IRS, but we avoided a potential disaster there.  Additionally, we were worried about the government defaulting on their debt which would have sent interest rates skyrocketing, and again, fortunately, this did not happen.

Even though there were so many ups and downs, the market in October this year was still better compared to a year ago.  There were more home sales, higher home prices and more homes for sale for buyers to choose from, although the uncertainty skewed people’s perception.  So now you know why October was such a roller coaster for real estate.

What lies ahead on the horizon as we enter the winter market?  My belief is we will be in our typical winter market.  Homes will come off the market for the holidays.  Motivated, savvy buyers will be out buying homes.  Interest rates will remain in the low 4% range.  Home prices will continue to stabilize throughout the Northern Virginia area.  Houses that are priced right, in the right condition and right location will see multiple offers and our market won’t be as up and down as it was in October.  Basically, we will continue to have a robust housing market locally.

To learn more about your situation, please feel free to call me today. Scott MacDonald (703) 652-5777.

Scott MacDonald

RE/MAX Gateway, LLC

How low will it go?

It has finally happened.  Inventory levels in Fairfax, Prince William, Loudoun, Arlington, Fauquier, Alexandria and all the cities in between have now dropped below 5,000 homes for sale.  We have just 4,692 properties on the market. We have not been this low in nearly a year.  This number is not an all time low – the first week of March in 2005 we had 1,652 houses for sale – this was the all time low for this region.  If you are curious, the all time high was the third week of November 2006 when we had 22,898 houses for sale. So as you can see, we are approaching an extreme situation in housing – nothing for home shoppers to buy.  A more balanced market would be in the 8,500 to 9,000 range – we are at about 50% of where we need to be.

So what does all of this mean?  If you are a seller, now is the time to put your house on the market because there is very little competition.  If you are a buyer, you will more than likely be in a multiple contract situation so be ready to put your best offer on the table initially.  Also, buyers will turn to new construction as an alternative to their housing needs as they can’t find suitable solutions in the resale market.  Lastly, prices should continue to increase – just need the appraisers to agree this is the situation.

What else is low and going lower?  Interest rates.  It is amazing that virtually every week the news is rates continue to hit new all time lows.  This makes now a great time to buy or refinance.

So, what is your opinion?  How soon will it be before we see an increase in inventory?  When will we see rates increase?  I’d love to hear your opinion so give me a call.

My crystal ball broke…it’s all about the numbers

Although my crystal ball is currently in the shop, we do know where things stand in regards to the local housing market in Northern Virginia.  Inventory levels of active resales are virtually the same – we currently have 7,640 homes for sale in Fairfax, Loudoun, Arlington, City of Alexandria, Prince William and Fauquier Counties.  This time last year we had 7,680 – pretty similar.  There is a slight difference between these two timeframes and that is in the number of distressed properties on the market.  This year there are only 293 foreclosures for sale along with 882 short sales – last year, there were 450 foreclosures and 1109 short sales.  This result is a difference of about 5% of the total inventory.  The perception is we are inundated with distressed properties when in reality, we have a lower percentage of overall inventory than the rest of the country in relation to foreclosures and short sales.  Our market is healthy. 

We have a 2.6 month supply of homes which is a seller’s market.  Houses are selling when the sellers have them priced right, in the right condition, and staged properly – often times with multiple offers.  We had several agents engaged in multiple contract situations this past weekend with a few of those properties being listed for several months.  We have buyers in our market because we have jobs.  One of our agents relayed a story of his nephew and their job search.  Over 140 people interviewed for a job at an oil change shop in Florida – that’s unbelievable.

Our rental market is strong, currently posting a 1 month supply of homes.  The reason is people relocating into our area are gun shy on purchasing.  This is as a result of a few different factors.  It may be their confidence in the housing market because of where they came from to relocate here, they can’t buy because of a potential short sale or foreclosure on their credit report or they are losing out to other contracts and have a short time to find a property and get forced into renting.  Either way, it is a great time to be an investor in Northern Virginia.

Prices are stable to increasing in the Washington Metropolitan area.  We are seeing price increases throughout our region in several price points.  Typically in house priced below $400,000 (pretty much everywhere) and those priced between $800,000 and $1,200,000 (closer into the beltway and DC).   In addition, builders found their bottom in pricing towards the end of last year and the first quarter of this year and have started to escalate their prices as they have seen an increase in sales of their homes.  Reports show that we are expected to have a 7.4% increase in housing prices in our region compared with -3.2% in the rest of the country – a difference of over 10%.  Again, we have a healthy market.

We also have low interest rates which are fueling our sales – housing is affordable because of rates.  If people are waiting to buy because they feel prices will come down – they are mistaken.  If they think rates will continue to decrease, they are mistaken as rates have actually increased over the last few weeks.  Now is the time to buy.