Federal Reserve

Northern Virginia Real Estate – Optimism and Home Buying are in the air for 2016

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We continue to have great optimism about home sales in 2016 despite the storm of the century just a few short weeks ago.  We are experiencing a mild winter and agents are building momentum into the spring market making this a great time to buy or sell a home. optimistic heart line Interest rates are phenomenal despite the Federal Reserve raising their rates.
Inventory levels are below last year’s level year-to-date and the great news is, sales are up.  We have pent up demand for housing in Northern Virginia which can be seen when visiting open houses on weekends and our listings are getting great activity throughout the week.  Today’s buyers are serious and are taking action on homes that are staged well, in condition and priced right.  In many cases, we are seeing multiple contracts.

In looking back at 2015, through November, sales of both new and existing homes had increased over the previous year.  According to a recent release from the Department of Commerce, new home sales in 2015 came in at 490,000—the best numbers since August of 2015.  We expect these numbers to increase throughout 2016 as well.  Builders have expressed multiple times they are optimistic as well.

Basic information on the economy shows us that unemployment is at a 7-year low, wages are 5% higher than a year ago, and home prices continue – moderately.  Let’s hope this trend continues as we definitely need higher paying jobs in our area.

One area of potential concern today is in the refinance boom of 2005-2007.  During this time, many borrowers took out 10-year mortgages that were interest only and their reset dates are now coming into maturity.  This means their loan balance is now amortized over 20 years for the last 20 years of the loan increasing their monthly payments significantly.  Add to this potential issue is many of the homes used to collateralize these loans have not gotten back to the value of where they were making it difficult to refinance again.  This could result in short sales and foreclosures.  Let’s pay attention to how this plays out.

As you know, if you have any questions or concerns, you can call, text or email me anytime.  We are here to help you.

Happy Valentine’s Day!

Scott MacDonald

RE/MAX Gateway

Economic Forecast for 2016 and what it means to the Northern Virginia Real Estate Market

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Happy Holidays!  Sorry for the delay this month but I wanted to have our Economic Summit with Dr. Stephen Fuller to fill you in on what is coming down the pike for our economy here in Northern Virginia.happy holidays from REMAX gateway

This year sales remained strong and higher than last year indicating we are still in an improving market.  Prices are stable as we wait for higher paying jobs which happened in the last local jobs report.  Higher paying jobs, along with lower inventory will put upward prices on houses in the future.  Next year will be even better than this year but it appears as if 2017 will be the best year of the decade so we have that to look forward to in housing.  Also, new home starts as well as sales are projected to increase in this same manner which will create even more jobs for our local economy.

Additionally, we see no reason that the Continuing Resolution bill will not pass and be implemented which will lead to the first of 8 interest rate hikes by the Federal Reserve.  Both announcements are due the second and third week of December.  The mortgage interest rates published today already have this rise in rates priced into them so we are not expecting a spike in mortgage interest rates next week when it is announced.  It is projected that by 2018, the Fed rate will be about 3.25% and mortgage interest rates will be around 6%.

Our job market will continue to grow in mostly higher paying jobs but the food and leisure jobs still are the strongest in our economy.  Professional Services and Health Care are coming on strong and this is where the higher paying jobs are for us.  This trend will continue for the next few years.

All in all, a bright forecast for our real estate market just in time for the holidays!  If you would like a copy of the presentation he gave us, please let me know and I will send it to you.

Enjoy this time of year with your friends and family and please be safe!  Until next year, Happy Holidays!

Scott MacDonald

RE/MAX Gateway
4090B Lafayette Center Drive, Chantilly, VA 20151
Offices strategically located throughout Northern Virginia.

 

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Top 3 Reasons Why You Should Buy or Sell a Home in Northern Virginia NOW!

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Wow, it has been a crazy 8 weeks for interest rates.  As we have discussed in the past, if someone was considering buying or refinancing, they should do it then.  Well, I hope you took that advice because interest rates have gone up three quarters of a point in just the past 2 months.  This week, we saw the largest increase in rates since April of 1987 – that’s 26 years!  The reason behind the increase is Ben Bernanke of the Federal Reserve made remarks that they may be tapering its bond purchases later this year if the economy continues to improve.  Although the stock market was up the second quarter with all three indexes recording gains of between 2% and 5%, it too took a hit on these comments.  We will have to keep a close eye on the economy and see where rates will go moving forward with this type of news on the forefront.  If you recall, at the beginning of the year, we predicted rates to rise to around 4.5% which I believe will still be the case, I thought it would be more gradual and not so drastic.

Largest interest rate increase since April, 1987

Largest interest rate increase since April, 1987

All of this being said, interest rates from a historical perspective, are still very low.  Today 30 year fixed rates are 4.25% with .75 points on conforming loans above $417,000.   While the increase in interest rates will certainly dampen some housing activity, the effect will be softened by the high level of buyer affordability, and home sales should still remain strong.

What else do we see in our real estate market?  We continue to see housing prices increase throughout the area as demand remains strong despite the increase in rates which is good news for our sellers.  We are also seeing more houses coming onto the market in Northern Virginia which is good news for our buyers. The inventory of resale homes is above 5,000 for the first time since the third week of October 2012.  Since the beginning of the year, inventory levels are up nearly 37% but we are still in a seller’s market with just a 1.4 month’s supply of homes.  The market still remains competitive with many properties receiving multiple contracts.   We had one house with 3 contracts on it this week in Virginia Run.  Distressed property inventory remains very low as well – just 6.9% of the market which is good news for everyone.   We should continue to see these trends continue throughout the summer.

Lastly, we are excited to announce we have signed a lease on our 5th office.  It is in the Clarendon section of Arlington and is located at 3000 10th Street – look for our grand opening announcement soon.  Please let us know how we can serve you.

Scott MacDonald

RE/MAX Gateway, LLC