housing news

April 2021 Market Update

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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!

September Market Update

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My whole career I have been asked, “So, how’s the market?” Well, this year and more specifically, in the last few months, I have been asked this even more. It is a loaded question because it depends on whether you are a buyer, a seller, or if you are looking to rent and most importantly where you are looking to do any of these types of transactions.  After we clarify what they want to know, I find it is a lot of curiosity because people love to talk about real estate. It also is of interest to them because in our discussions I hear things like, “I don’t see any for sale signs in my neighborhood”, “when houses go up for sale in my area, they sell right away”, “my friend is looking for a house and they are losing out on multiple contracts” and many other similar comments so there is a genuine interest in “How’s the market”.

Overall, in Northern Virginia, the inventory on active resale homes is down over 31% from last year and units sold are virtually the same which means it is extremely competitive to be a buyer and if you price your house correctly, you can be a very happy seller. As always it is a hyper-local market so let’s take a deeper dive into the counties.

  • Arlington County – the Amazon Effect is keeping inventory low, median days on the market extremely low but interestingly enough, prices are not as high as you would think considering the supply and demand in that area. Closed sales are down as inventory is down and prices are up just 4%. Houses sell quickly – median days on market are just 9!
Statistic Jul YoY MoM
Total Sold Dollar Volume 182,179,254 down5.9% down7.5%
Closed Sales 266 down9.5% -0.4%
Median Sold Price $616,000 up1.3% +9%
Average Sold Price $684,884 up4% -7.2%
Median Days on Market 9 days down75.7% 0%
Average Days on Market 30 days down40% -16.7%
  • Fairfax County – Prices are up Year over Year but down Month over Month which indicates sellers are starting off too high and then making adjustments to get them sold. Days on market for Median Days and average days indicate a strong market but remember, price is critical to getting houses sold today. Closed sales are up Year over Year but are down Month over Month.
Statistic Jul YoY MoM
Total Sold Dollar Volume 1,027,443,963 up7.9% down5.9%
Closed Sales 1,680 up6.5% -4.8%
Median Sold Price $539,900 up2.3% -4.4%
Average Sold Price $612,668 up1.5% -1.1%
Median Days on Market 17 days down56.4% +6.3%
Average Days on Market 33 days down31.3% +6.5%
  • Loudoun County – the market in Loudoun is slowing a little as they are experiencing what other regions are – Year over Year gains but Month over Month declines. Median Days on Market jumped MoM but prices are maintaining in the area.  There is lots of pent up demand in Loudoun – stay tuned on their progress.
Statistic Jul YoY MoM
Total Sold Dollar Volume 408,811,460 up8.4% down2.8%
Closed Sales 747 up1.8% -1.2%
Median Sold Price $512,250 up8.5% -0.5%
Average Sold Price $549,478 up6.9% -1.4%
Median Days on Market 23 days down39.5% +43.8%
Average Days on Market 38 days down34.5% +22.6%
  • Prince William County – consistent with the other counties showing price reductions but an overall strong market as sales are strong and Days on Market are low. Prince William offers the lowest prices so more value!
Statistic Jul YoY MoM
Total Sold Dollar Volume 318,271,988 up5.4% down1.5%
Closed Sales 778 down0.4% 0%
Median Sold Price $385,000 up6.9% -2.5%
Average Sold Price $409,616 up5.9% -1.8%
Median Days on Market 24 days down41.5% +14.3%
Average Days on Market 38 days down19.2% +5.6%

Remember, within the counties, there is also a deeper dive that needs to be taken into consideration in neighborhoods and price points. Hopefully, this gives you a better idea of what is happening in our real estate market in Northern Virginia.  If you have any questions or concerns or if you are looking to make a move, please feel free to call me.

August Market Update

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The word on the street is prices are going to collapse…the market is overheated…a recession is coming…we are in a housing bubble. It’s mayhem if you believe everything you read and listen to what the non-experts have to say about the real estate market and the current market we are experiencing.  Quick question. Did you know that 50% of REALTORS have a second job?  Working with a true full-time professional who is up to date on the local Northern Virginia real estate market is more important today than ever before.  You need to have the guidance, advice, and experience to be guided seamlessly through the real estate transaction, so you are protected.  Don’t rely or believe everything you read on the internet.  Call me instead because here are the facts.

Prices – barring an unforeseen event, they are stable in Northern Virginia and will remain this way. Why?  Because our prices have risen only slightly each year after the Great Recession (bar a few examples/areas). We don’t have lending practices in place any longer that allow buyers to buy without strong fundamentals in place and allowing unqualified purchasers to outbid on properties at extreme prices.

The market is overheated – this is not true in all areas of Northern Virginia. Yes, there are areas of Arlington and in certain price points where inventory is extremely low that there are multiple offers but overall, we have seen this trend slow in recent months. Remember, what you read today typically happened 2-4 months ago as stats on the market don’t immediately get released and are reflective of current trends. Every market is different, and this is why you need specific advice on your property if you are selling or if you are considering purchasing a home.

A recession is coming – yes, it is true as we have been in the longest recovery in our history.  All markets are cyclical so a recession will come. What does this mean for housing? It is typically a good thing…interest rates are lowered to stimulate the economy and barring the Great Recession, since 1995 when we have had economic slowdowns, prices have appreciated 81% of the time which is the same as when we have had economic expansion. Don’t fear the word recession and real estate values.

We are in a housing bubble – not true for our area. Prices have not skyrocketed like they have in other areas of the country, as previously mentioned, our prices have only moderately increased year over year. Our inventory of resale homes is 22% below last year’s level and 33% below inventory levels two years ago. Our unemployment rate is one of the lowest in the country. Our salaries are stable to slightly rising meaning people have good-paying jobs.

Lastly, the interest environment we are in is making housing more affordable – rates are low and are going lower. 30-year fixed rates are in the mid to high 3’s (percent) today. There are many refinances that are taking place and there will be more to come so these people will be staying in their houses for a while and will be potential, future landlords which will keep the housing inventory tight moving forward.  This too will keep our market out of a crisis in my opinion.

Again, barring an unforeseen event, we will be in a strong real estate environment for some time here in Northern Virginia.  We actually need more houses to sell as there is pent up demand. If you are considering a move of any kind, please call me today to learn more. I can be reached at scottmacdonald@remax.net or 703-652-5777.

April Market Update

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As we enter what is considered to be the “Spring MHoliday Social Shareables-Springarket” in real estate, we are lacking one thing that makes sales “spring”… houses to sell and houses to buy.  We have plenty of buyers looking and many more expressing an interest in becoming home owners, but very few houses coming on the market quickly enough to keep up with this demand. Now that we enter April, let’s hope the tide turns so we can have happy new homeowners.

As of the end of March, our months of supply of homes in Northern Virginia is at only 1.1 months which is extremely low. A balanced real estate market is considered a 6-month supply of houses to sell. With these low inventory levels, the result is the increase in escalating prices. We have multiple contracts on many listings with no sales to support these prices when it comes time for appraisal. As such, we are starting to see low appraisals in some instances. The financial crisis has put pressure on appraisers to be very conservative even when you have buyers willing to pay above list price. It has always been my belief that the true market value of a home is what someone is willing to pay for a property and what someone is willing to sell for when it is an arm’s length transaction. Appraisers need to be given latitude to make this happen, not be restricted when we are in the market we are experiencing. I say this within all reason of course and don’t believe buyers should just offer any price to get a house and expect it to appraise. But with justifiable support, houses should appraise for what the market bears. Professional real estate agents should take the time to meet with the appraiser to show them all the supporting documentation and reasoning behind the value of the house. This way, all parties can move forward with the financing of the home without appraisal concerns. This is our job and what we do.  Please call me to discuss if you are considering selling.

If you are considering buying, we can help position your offer to negotiate on your behalf to get the home you want, it is not an impossible task. We have helped numerous clients achieve their dream of home ownership and we can help you as well. Please call me to learn more.

Let’s hope April showers bring us more houses to sell!

March Market Update

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Holiday Social Shareables-StPatricksDay

The housing market in Northern Virginia continues to be on fire…in certain price points.  Virtually anything under $450,000 that is in good shape, priced right and is not a condo is selling within days, above asking price with multiple contracts.  Places in the $500,000 – $650,000 price point that have been updated and show well are also selling quickly.  We have a lull in the $650,000 – $900,000 price range depending upon location.  And lastly, properties priced $1,000,000 – $1,200,000 are seeing great activity as well and are even receiving multiple offers in some cases.

In today’s fast paced market, buyers need to be very responsive when they see a home that is of interest to them because, in all likelihood, someone else is also interested in it.  This dynamic is giving some buyers, a little “buyer’s remorse”.  When people feel forced to make quick decisions, they are taking advantage of the home inspection void rights or HOA document review period to get out of contracts at a later point in the transaction.  If you are a buyer, be sure you are committed to the house you are buying and if you are not, be patient and write on one that you are willing to follow through on.  These situations are creating a lot of stress on sellers and it is hurting the buyers who were willing to commit to the purchase and eventual ownership of that home.  Of course, if there is a legitimate reason to back out, by all means exercise your rights to void.  Don’t “jump” for fear of loss, “jump” because it meets all of your criteria.

We have finally entered the rising interest rate environment we have been predicting the last few years.  Despite this, as previously mentioned, houses are still selling which is good for our sellers.  The rise in rates has caused some people to get off the fence about buying which is adding to the number of potential buyers in the market.  Luckily, the interest rates for mortgages are still historically low so it remains a matter of perspective when people say rates are high.  Experienced buyers know we are fortunate to have rates in the 4’s and will still seek home ownership even in this type of environment.

As you know, everyone’s situation is different so please call me to discuss your plans in more detail so I can give you the right advice whether buying or selling.

Happy St. Patrick’s Day!

February Market Update

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Holiday Social Shareables-ValentinesDayThe Northern Virginia real estate market continues to gain momentum despite low inventory levels. There are many buyers in the market ready to buy the right home and in many cases, it is difficult to do so leaving them and their agent frustrated. Typically, this time of year we start to see houses come on the market, but we have not seen a week-over-week increase in inventory since the fourth week of September last year! That is an amazing run, hopefully it will change soon for our buyers. If you are considering selling, let’s get together to see how to position yourself for success in this market.

All indications are pointing for 2018 to be another great year for real estate sales, despite starting off with low inventory levels and increasing interest rates. Interest rates are projected to be in the high 4’s, possibly low 5’s by the end of the year – scary, NOT! When I first got into the business in 1988, rates were in the 12’s. Yes, the rate increase will have some impact but not substantially in my opinion. What could have a greater impact is escalating prices coupled with the higher mortgage interest rates. This may force some first-time buyers to sit on the sidelines because of qualification purposes or potential sellers staying in their houses longer because they don’t find it beneficial to relocate. As always, time will tell.

The low inventory levels are resulting in multiple contract situations in many cases, but not in every situation so it is important to have the right expectation when putting your house on the market. Upper end prices are taking longer to sell as is typically the case. Houses that have not been priced properly, are in poor condition or have undesirable lot conditions will accumulate days on the market as well. In these situations, it is critical to hire a professional to give you the proper guidance to maximize your sought-after results.  We are here to help you navigate the sale in these circumstances, so please call me to discuss your situation in more detail.