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!

July 2020 Market Update

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As We Begin to Reopen…

As we transition into Phase III with some areas beginning to open up while others remain on restricted status, I encourage you to stay safe, make wise decisions when you go out in public, so you and your family continue to remain healthy.

The result of the pandemic has limited the number of houses coming on to the market here in Northern Virginia. Potential sellers are still concerned about people coming into their homes, which is understandable during this time. The crazy thing is – the pandemic and various Phases we have been in have not slowed down home sales! The inventory level of houses for sale is down 43% from this same week last year, yet sales are up 16.5%. It is critical that we find people looking to sell their home and are comfortable doing so because we are continuing to see multiple contracts on houses throughout Northern Virginia (in most price points). It is not uncommon to receive 15-25 contracts on a house in less than 48 hours when it is priced right, in the right condition and location. Most recently, I heard about a condominium in Falls Church that received 44 contracts – one of our fellow agents lost out on that one just last week.

The onslaught of offers has prices escalating, and as a result, we are experiencing some appraisal issues. I make sure to set the proper expectations for both sellers and buyers if I feel the house will not appraise.  In addition to this, I meet the appraiser at the property to keep them informed on the situation – the number of contracts, prices, the quantity of showings, etc. to try to avoid low appraisals. However, they still are happening in some cases, as some prices just cannot be supported by the appraisers. We have had several people waive the appraisal contingency to secure a home, which has been great for my sellers. We have also had many appraisal waivers from lenders when the borrower has excellent credit, is putting down 20% or more, and the neighborhood can support the pricing. To learn more about this, please call me.

Buyers – get in the game!  We can help, and rates are still amazing. Today’s rates are below 3% on 30-year fixed loans. Additionally, if you aren’t planning to move and you haven’t refinanced, now is a great time. Call me to learn more about this and our strategies to win in multiple contract situations or for a connection to one of my preferred lending partners. I am always here to help!

I hope you had a great 4th of July!!

Start your home search HERE

 

June 2020 Market Update

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First and foremost, I trust you are staying safe and making wise decisions when going out in public, so you remain healthy!

So, you may be wondering what was happening in the real estate business during the pandemic while we were on stay at home status. As I mentioned previously, we were deemed essential, so we could still “work” and help people make wise decisions when selling, buying, or leasing properties. And let me tell you, this pandemic did not stop our local real estate market, as houses are selling and selling fast in many cases. The median days on market in Northern Virginia in March were six; in April, it was five, and I am guessing that we will have the same result in May. The average days on market stand at just 28 days.  We still have an extremely low inventory level today, and we have a tremendous number of buyers out in the marketplace resulting in a feeding frenzy in many price points and in most locations throughout Northern Virginia. Today, the number of homes for sale is 40% below this same time last year and is down 51% from two years ago. We currently have less than one month’s supply of homes, which is historically low. The bottom line is – we need more houses to sell to keep up with the demand.

Mortgage interest rates are incredibly low – around 3.25% today. The great rates are one contributing factor to home sales as it is more affordable (on a monthly basis) to own versus renting in many cases. The rental market remains on fire as well as demand is strong for rentals. Additionally, prices are increasing across the region, and buyers want to begin their wealth-building strategy of homeownership. One interesting dynamic that we are seeing is more first-time buyers entering the market and fewer investors/cash transactions.

It is still a great time to both buy and sell if you take the proper precautions. Give me a call me to discuss your situation in more detail, especially now that we are entering Phase 1. The big question to be answered by the next newsletter is… Did more people decide to sell now that we are in Phase 1 or potentially Phase 2? Lastly, if you went into forbearance on your mortgage or other debts or if you are thinking about it, please call me so I can explain the process and ramifications.

Happy Summer!!

April 2020 Market Update

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First and foremost, I hope you are being safe and making good decisions when going out in public so you can remain healthy. Please let me know if I can do anything at all for you during the COVID-19 situation we are in today.

I never imagined that I would be writing a blog commentary like this one. It is insane. Quite frankly, I can’t remember a time when I have said crazy or insane so often but what other words can be used to describe what is going on around the world. Things are happening so rapidly with changes day to day, hour to hour and even minute to minute. The government has stepped in with the $2.2 trillion stimulus package to assist monetarily but is it enough? Only time will tell.

I am still asked the popular question, “what is happening in the real estate market” several times a day.  Well, that too changes daily. We have been asked to shift our normal process to include doing virtual showings and virtual open houses, to stop searching for buyers, take listings off the market as well as the complete opposite. Some people need to sell so they are keeping their houses on the market and some buyers need to buy because they recently sold their house or their lease is ending, or a job has relocated them here. Some agents are not showing properties or taking listings and others are as active as ever. My response to all of this is simple, if you are not comfortable selling your house, looking at houses or working in this environment, then please don’t.  We would never want you to be uncomfortable or do something that may put your health at risk.

If you are comfortable with the process, please take the appropriate precautions. As such, in an effort to protect our clients and the public as a whole, we are implementing new protocols when any agent, whether from our company or others, shows our listings or if we show houses to our clients. If you are interested in learning more about these protocols, please feel free to call me, I would be happy to share them with you.

Again, please be safe so you can remain healthy and know I am here to help you in any way I can. I hope you have a very Happy Easter with loved ones, it will be one we never forget.

March 2020 Market Update

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It’s March Already!

It seems like just yesterday that we started the new decade. You know the saying; time goes by faster when you are busy and boy have we been busy!

The real estate market continues to be very brisk. For example, I have scheduled appointments on a Thursday afternoon to show properties for the coming weekend. Several of the homes went under contract so quick resulting in canceled appointments (and sad clients). These houses were in various areas and various price points throughout Northern Virginia, not isolated in one area. In conversations with sellers, I have been letting them know that even though there are bidding wars, multiple contract situations, etc. the price and condition of the house still rule. If prices are too high for the area/neighborhood or if the home needs some work, it will sit on the market with little to no activity and definitely without offers! When priced well and in “HGTV condition”, there is a feeding frenzy. Buyers in today’s market, realistic or not, are looking for the perfect house and they are willing to pay for it. So, as a seller, get your house in top condition and price it right to get it sold and not be just “for sale”.

Lately, the news and social media have been inundated with information on the Coronavirus. The stock market has dropped over 4,000 points and this question is now coming up in conversation more often; “should I be concerned as a buyer or seller?” At this time, there are concerns but as I previously mentioned, we are still in a great area with sales at a feverish pace. My concern would be more for buyers and sellers in the luxury market. As part of their wealth may be invested in the stock market and as a result, there could be a concern but as we know, the market continuously ebbs and flows and this one is no different. There will be a cure for this killer virus, the stock market will rebound, and houses will continue to be bought and sold. Have no fear! If you would like to discuss this in more detail, feel free to call me.

As always, I am here to help you and your family and friends with their real estate needs. Happy Spring!