October 2021 Market Update

Wow, I blinked, and September has ended. Time seems to go by faster and faster these days; it is just crazy to me. As I mentioned last month, we are still busy helping buyers and sellers with their real estate needs. The market is still outperforming other recent, non-pandemic years as far as sales and prices are concerned by wide margins. Call me if you want to know the exact numbers. 

The overall pace of sales is very close to last year’s pace for this same timeframe.  However, the number of sales year-to-date in Northern Virginia is up over 24% versus 2020. In addition, sales prices are up over 11%. It is not as frenetic as earlier this year, but the numbers prove we still have a robust real estate market here locally. I recently read that the average Virginian has gained $50,000 in equity since last September. I am sure that number is higher here in Northern Virginia, as our prices far exceed the rest of the state. Real estate is truly a great way to build wealth, so spread the word if you know of anyone looking to become a homeowner – we can help.

More good news – we are not seeing evictions, foreclosures, or prices tumbling as had been predicted by many in the media. People are taking advantage of rental programs to stay in their homes.  The number of individuals in forbearance has dropped again – only 1.5 million people remain in the program. Loan modifications reached a 15-month high in September, which means people will stay in their homes after forbearance timelines end, and as I previously mentioned, prices are up.  Now, prices won’t skyrocket like they did earlier this year, but home prices will experience a more moderate escalation, as will home values. The reason is, although we have more inventory than last year, we still have historically very low levels of inventory. Couple this with strong demand, and we will see values increase; all good news and a more healthy market.  If you have any questions relating to buying or selling, please feel free to call me.

Have a great season and enjoy these comfortable Fall temperatures! Happy Halloween!

August 2021 Market Update

There is a lot of news swirling around about the real estate market today. You are probably hearing, reading, or seeing that the market has slowed, inventory has increased, buyers are taking a break, and prices will crash once forbearances end. Well, the question is – what is real news and what is not? In my opinion, we are back to a more “normal” market based upon seasonality, and the market is not going to crash – at least not in Northern Virginia. The months of July and August are typically slower times of the year for real estate, and this year is no different (other than more people are vacationing due to the pandemic and travel restrictions last year). So, this is having a slight impact on the market. Couple this with the frenetic pace of the spring market, and the media would have you think the real estate market is coming to an end. In my opinion, It is not, so you can sleep at night now.

Let’s address each issue:

  • The market has slowed. Yes, it has slowed down slightly in relation to the overheated market we discussed previously and the time of year. This being said, houses are still selling, and some have multiple offers on them. If you are selling, make sure you prepare your home in the proper condition and price it right. Now is not a time to overprice properties. Call me to discuss your situation in more detail.
  • Inventory has increased. Yes, it has. We were at near all-time lows for houses for sale in Northern Virginia, and previously, there were not enough homes for the buyer demand we were experiencing. Additionally, we are still well below what is known as a “typical” market for the number of houses for sale.
  • Buyers are taking a break. Houses are still selling, so they have not taken a break. Buyers are not competing as much in multiple contract situations, so the number of multiple offers has decreased. This does not mean the buyers are taking a break. Buyers are more discerning, and with increasing inventory, they can be. This is an excellent opportunity for buyers – more inventory and less competition. If you are considering buying, give me a call to discuss your situation in more detail.
  • Prices will crash once forbearances end. Prices will not crash… inventory is low, demand is high, mortgage rates are still fantastic, and just because an event like this occurs does not mean prices will crash. There will not be a flood of foreclosures like there were before. Too many reasons to list why, but feel free to call if you are interested in learning more.

There is lots of information out there about real estate. To make sure you are well informed, call on your trusted professional 😊 As summer comes to an end, I wish you all good luck sending kids back to school this year!

June 2021 Market Update

Here is the update on the crazy Northern Virginia real estate market…round and round and round it goes, where it stops, no one knows. The interesting thing is the market has shifted, and it happened quickly. Was it mortgage interest rates rising so high it stopped people from buying? No. Was it a flood of foreclosures and short sales hitting the market? No. Was it a pricing bubble that popped and collapsed home prices? No. Was it regular sales coming on the market giving buyers more choices? No.

So, what has caused the shift in the market?  First, the frenzied market we experienced from mid-January through early May could not be sustained. We were experiencing 50-70 showings in only one or two days and contract numbers in the high teens to low twenties on houses we put on the market.  Additionally, we saw prices escalate tens of thousands to hundreds of thousands above list price, with buyers waiving everything to “get” a home. It was a stressful time for everyone involved – buyers, sellers, and Realtors alike.

Now, we are seeing 5-15 showings in an entire weekend, and we are receiving between one and five offers. Still excellent numbers historically, but it is, in a different way, causing stress on sellers. The expectations of sellers are what they “heard,” “saw,” or “read” about the market two months ago or more – not recent facts. Well, the market shifts on a dime with no real rhyme or reason. The one thing I feel has put a damper on the market is “buyer fatigue.” Buyers had gone out, written contracts, and lost out on many houses. They wrote what they perceived to be the perfect contract and were beat out by someone who had to have the home and irrationally made an offer the seller couldn’t refuse. The conversations I am having now with buyers and agents are – oh, they have three offers? Someone will pay too much; I don’t want to waste my time. Therefore, we are now seeing fewer offers; still, great offers – above list price and waiving contingencies, but the number of contracts and showings are just down. So, if you are a seller or considering selling, your house will sell; just realize the market is different today, not bad, simply different. On the other hand, if you are a buyer, don’t give up; fewer people competing for homes mean you have a better shot at getting one now than a few short months ago. We can help you determine your best course of action, whether buying or selling, so call us to learn more!

Have a great summer!

May 2021 Market Update

The real estate market reminds me of the great Bill Murray movie Groundhog Day. It seems like every month I am conveying the same story. Housing inventory levels are still low, we continue to have multiple offer situations, interest rates continue to stay modest, and prices are rising. Sorry, but that’s the story in Northern Virginia today, and I believe it will be for years to come. 

The good news is we continue to see additional inventory come on the market. The issue is, in most cases, we have more demand than the supply that is coming onto the market. This has some buyers experiencing “buyer fatigue” as they cannot waive all contingencies or go high enough in price to win in a multiple contract situation. In some instances, this has resulted in fewer contracts submitted in what could be a multiple contract situation and, in some rare cases, only one or two offers are received. For today’s buyers, patience is critical, but the speed of writing the offer is the key to success. If you are thinking of buying, let’s meet to discuss your plans in more detail.

If you are a seller, it is extremely important to be realistic and do the right things to get your house sold. We have seen some sellers trying to take advantage of the market by not completing the finishing touches typically done when preparing to sell their home. They are not painting, replacing carpets or flooring, making minor repairs such as caulking in bathrooms or repairing rotten trim, etc. and worst of all, overpricing their properties. Greed is not good; being sensible is as the market is not like it was in 2004-2006, where you could price properties for tens of thousands of dollars above the last sale. People who do the right things such as staging and proper pricing see the market take their sales prices higher because buyers are willing to pay premium prices for properties in the right condition. If you are considering selling, let’s get together and see what we can do to help you maximize the market.

Enjoy the spring weather and all that May has to offer.

April 2021 Market Update

The Northern Virginia real estate market continues to amaze me. Inventory levels remain extremely low, demand remains extraordinarily high, and this is still occurring even though rates have increased slightly over the last few weeks. I do not believe this will change or slow down any time in the near future. The level of demand is just too high.

We continue to see multiple contract situations as the new normal throughout much of Northern Virginia. It is common to see all contingencies being removed and prices set way above the original list price in these situations. In early March, I wrote a contract on a house in North Arlington that was listed for $935,000. It was a 4-bedroom, 3-bath home, and just 1,280 square feet. The offer was cash, close in two weeks with no contingencies, and my buyer offered $1,026,000. According to the listing agent, we were not even close! One of the 23 received offers went up to $1,081,000. Insane! This leaves 22 other active buyers still looking to own in that price point in Arlington – so again, I don’t see this market slowing any time soon. All the being said, the condo market is the only anomaly as most condos are sitting on the market.

So, what is going to happen is what I am often asked. My belief is that inventory will remain low for the foreseeable future as people have purchased or refinanced at exceptionally low rates. As rates increase, there will be little, if any, motivation to move. If someone has a $500,000 mortgage with an interest rate of 2.75%, what will motivate them to move to a home with a $750,000 mortgage at 4% or even higher? I think this is what will stagnate inventory levels over the next few years. People will only move if there is a genuine need to do so – like marriage, kids, schools, job, divorce, death, etc.

Speaking about interest rates, they have inched above 3% for the first time in several months, but please keep this in mind, they are still below where they were this same time last year and are still below historical lows mortgages. Earlier I mentioned rates at 4% or higher; I don’t believe we will be there for some time, so no need to worry about this happening. I foresee we will be in the low to mid 3’s for the remainder of the year.

As always, I am more than happy to speak with you about your situation in more detail as each situation is unique and personal.

Happy Spring!

March 2021 Market Update

It’s hard to believe that one year has passed since our world changed with the Pandemic. There have been so many changes in our daily routines, the way we interact with each other, how we conduct business, and so much more. The hardest part for many of us was that we lost loved ones or could not visit them due to restrictions. Let’s hope this all changes soon with the vaccine. 

As far as the real estate world goes, it has remained resilient and has even thrived. To some, it may be hard to believe, but true. Historically low-interest rates, crazy low inventory levels, and high demand resulted in a frenzied market over the last year. Housing gained over $3.1 Trillion in equity in 2020 as prices escalated in almost every market around the country. We are only a little over two months into 2021, and we continue to see a strong housing market. Inventory remains extremely low, rates have ticked up slightly but are still very attractive, and buyer demand remains very robust. The biggest concern remains the low inventory. We continue to see multiple offer situations in all price ranges throughout Northern Virginia. Many times, contracts are being submitted without the buyers even seeing the home! Crazy but true. Buyers are conducting pre-offer home inspections, waiving all contingencies, and are bidding 10-13% over the list price to get into a home. I believe we will be in this type of market for the next few years. Unfortunately for buyers, I don’t see a flood of houses coming on the market to cover the demand that is out there today.  Interest rates will remain low to help keep the market moving. We continue to have low unemployment relative to other parts of the country, so people are continuing to relocate to our area. Couple all of this with the Millennials entering the market as home buyers; it’s quite the tsunami.

If you are considering selling or buying a home, it is more critical today than ever to have a professional representing you. Expert negotiation skills and market knowledge are essential in this aggressive market. Please feel free to call me to review your situation in more detail or allow us to help someone you know. I am always happy to help.

I am looking forward to warmer weather and more hours of daylight, and I hope you are too.  Happy Spring!

February 2021 Market Update

Again, I have said it before, and I will repeat it, inventory levels on homes for sale in Northern Virginia are critically low! We currently have just 1,701 homes for sale in all of the counties we serve in Northern Virginia. The amazing fact is the number of condos that are currently for sale – 792 – which represents just under 50% of the total inventory. Condos typically do not reflect nearly 50% of the inventory levels … more on this later. 

Continuing with the numbers; there are only 646 single family homes currently on the market. Are you kidding me? There are only 235 townhouses total, again, WOW! Do you know what this means? The chances of multiple contract situations are possible on virtually every home on the market. We have had as many as 30 contracts submitted on one house in Gainesville priced at $635,000. It escalated above $700,000. We had another home in Aldie that had 78 showings and 62 visitors at the open house. This one was priced at $772,000 that had 21 offers and escalated to $831,700. It is insane – I cannot think of another word to describe it. 

A question I am frequently asked is when will it end? I think it will be a long time, as I believe it will be rate driven, and rates will remain low for the foreseeable future. Once rates rise to the 4 or 5% range, we will see a slowdown in contracts/purchasers, but not an inventory increase. Another question is, when will buyer burnout take them out of the market? My answer: it depends as this is and has always been an individual question. I have heard about prospective buyers writing as many as 15 contracts (on different homes) and still in the fight, while others are not even entering the market because of these “bidding” war situations. Typically, buyers will write until they win a bid on a property.  Usually, in a market like this, it has been between 3-5 times in my experience. 

One more question I hear is how do I buy if I must sell my house first? This one is more complicated, but I can give you details if you are interested. We have nine ways to make this work!

If you or someone you know would like to discuss their situation with me in more detail, whether it is purchasing or selling a home, please feel free to call me.

Have a Happy Valentine’s Day!!

October 2020 Market Update

Real estate continues to be the shining light in the current economic recovery. Buyer demand, housing prices, and new and existing home sales continue to be strong – not only in Northern Virginia but also across the country. Our issue continues to be low inventory levels for the demand that we are presently experiencing. As of today, we have 30% less inventory of homes for sale versus this same time last year. The median days a house stayed on the market in August was just six days, so as you can see, demand is there.

Additionally, prices are up year to date 7.95% over last year’s pricing. The pandemic pushed the housing market back about three months, so what would typically be a slower time of the year is one of our strongest. If you are considering selling, now is an ideal time as we couple all this data with the fact that we have the lowest interest rates in the history of tracking. Contact me to discuss your situation in more detail if you are considering selling.

So, where is the market headed into the future? There is talk of another foreclosure crisis that could lead us into a Great Recession… will this happen? There is a housing bubble, and prices are going to crash… will this happen? My answer is no to both. First, we have low inventory levels and high demand. In October 2006, we had just under 23,000 houses for sale; today, we have 3,014. If properties are foreclosed on by banks and released to the market, they would sell quickly and not put us into a housing crisis. Again, back then, we had a 10-month supply of houses, today we have a .8-month supply of houses – a considerable difference. Back then, people “walked away” from their homes because of price drops and lending practices; this is not going to happen now. Today’s loan products, loan qualifications, and lending guidelines are nowhere like what they were prior to the Great Recession.

Back then, we had exotic loan programs, 100% financing programs, teaser rate loan products, and just bad underwriting guidelines. Homeowners today are more financially stable, which will result in fewer foreclosures. If there is an area that may be in jeopardy, it would be in the Mom and Pop landlord arena.  Basically, people who have one or two investment properties may not be able to “carry” the houses if their tenants are unemployed. This is a small segment, so I don’t see it significantly impacting our market.

Additionally, prices are rising, but not at the rate they were in 2004 – 22% year over year increases, 2005 – 24% price increase year over year and in 2006 it was 23%. As I mentioned, we are at a reasonable pace of 7.95% today; therefore, I do not foresee a crash in prices like we saw in the past. We will see a decline in housing price increases, but not a decline in prices… big difference. Our market is stable and will continue to be so for some time, in my opinion. If you would like to discuss this further, please feel free to call me. 

Enjoy the weather! Have a safe and Happy Halloween!

A Quick Minute of Motivation

In this motivational series, I’ll highlight how to become a Peak Performer. Today’s question – how are you demonstrating your value? What are you doing to add value to others lives Learn why I feel this is SO important in my latest Peak Performer Series message. 

Peak Performer Series – Part 34

Need more motivation? Give me a call at 703-652-5777 or email at scottmacdonald@remax.net 

FOLLOW MY NEW FACEBOOK PAGE for more motivation, success tips and inspiration: https://www.facebook.com/SuccessSecretsforRealEstate/ 

September 2020 Market Update

Here Comes Fall (and all things pumpkin spice)

The Global Pandemic has not slowed down the real estate market here in Northern Virginia. Low inventory levels continue to be the main issue as there are many buyers in the market and not enough homes to purchase. Couple this with historically low-interest rates, and we have a solid seller’s market, which also means we have an extremely challenging buyer’s market. Today, the median days on the market are just six days, and the average days on market are only 19. Now, of course, there are some properties in specific locations and price points that are staying on the market longer, but generally speaking, most houses are selling quickly. Buyers need to make decisions swiftly and make solid offers if they want to be in the running as the next owner of their home of choice.

In today’s market, we do have some additional challenges, not just the shortage of homes for sale. A remarkably close second challenge we are experiencing involves the lending process if the buyer does not select the right lender. For example, we are encountering long lead times for appraisals, lack of urgency to close loans on time (they treat the purchase transactions like a refinance and the loan is in the order it was received,) numerous appraisals coming in low as buyers are escalating prices above market price and response time frames from the loan officer as they are overwhelmed with refinances. As a side note, it is extremely important to select the right lender when you are accepting a contract on your listing or when you are buying your home. The highest offer is not always the best offer.

Additionally, we have a lot of stress in the market. Buyers are losing out on multiple homes, which causes frustration. Sellers not receiving offers as high as they believe they should make them anxious. Agents can be rude, arrogant, unresponsive, and unprofessional, which causes everyone to stress out.  It is so important today to hire the right agent to guide you through the home selling or home buying process, an agent that knows how to navigate with you for a smooth and seamless process. So, if you are looking to sell or buy a house today, call me – I have helped many others successfully buy and sell properties in today’s unbalanced market.

I hope you have a great Labor Day!