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!

 

January 2020 Market Update

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Happy New Year!

As we enter the New Year and New Decade of the 2020’s we are experiencing the lowest levels of available homes for sale in years. We currently have just 1,946 homes for sale in all of Northern Virginia. We have a serious need for more houses to come on the market! As of the end of December, we were experiencing multiple contract situations on many houses throughout our area – as many as 23 offers on one house. The demand is there, the housing supply is not. Sales last year outpaced sales from 2018 by nearly 1.5% through November and should outpace sales through December as well. Interest rates remain very low making it more attractive to buy versus rent in many cases. Those who previously suffered credit damage from the housing crisis during the great recession in the mid-2000s are now recovered and property values are increasing making now a more desirable to time own. Therefore, we now have a lot of pent up demand for housing at all price points.

Additionally, there is also a shortage of rentals available on the market, so when they do become available, they rent quickly. There is currently just a half month’s supply of rental houses in Northern Virginia. These factors definitely make it an ideal time to sell or rent your home. Call me to learn more about how you can position yourself for success in this market when making this decision.

Overall the economy is strong in Northern Virginia. Unemployment is very low in our area and with Amazon ahead on their hiring, I don’t see a change in this for us. The only issues we are really facing are the trade talks with China and Trump says the phase one agreement will be signed mid-January and the Iranian situation. Will this escalate to yet another war? If either of these issues goes awry, we could have economic problems that could affect the market as we know, only time will tell.

The good news is we continue to have a robust real estate market and I am available to help you when you are looking to make a move.  Make the 20’s your best ever!

December 2019 Market Update

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Wow, did November fly by or what?  It seems like I just sent my November newsletter and here we are in December already – crazy to me for sure. November brought a few substantial changes in our industry. First is the way we must now market our listings. The ability to pre-market homes as we know it has gone by the wayside. Previously, we could use signs, online marketing on social media sites, real estate websites, networking events and/or email campaigns to get the word out about future listings either days, weeks or months in advance. Now, we must put the home in MLS within one business day as active or in “Coming Soon” status once the property is marketed to the public in the aforementioned ways. It is more consumer-friendly as it opens up all houses to the buyers and it also gives sellers maximum exposure to all buyers by sharing the properties with all agents. Before this new rule, there were agents who would privately market homes to the detriment of the seller and potential buyers. This change will also provide accurate data in MLS for sales information, so we all know what sales prices and concessions are and inform us if the sale was an arm’s length transactions or not.  This is helpful for pricing houses for both buyers and sellers as well as appraisers. To learn how this can affect you when deciding to sell your house, give me a call, I’m happy to share more details.

The second area is financing houses and loan amounts. Here is a brief history of what FHFA has done since 2016 with conventional loans: back in 2016, the FHFA increased the conforming loan limits from $417,000 to $424,100. Then, the next year, the FHFA raised the loan limits from $424,100 to $453,100 for 2018. And in 2018, the FHFA increased the loan limit from $453,100 to $484,350 for 2019. Lastly, just last week, the new loan limits will be $510,000 for 2020. Jumbo loans will now go up to $765,600 in our area. Jumbo loans typically have higher interest rates. Please call to learn more about how this can help you when buying or selling a house.

Also, VA loans no longer have a limit, but they do have liability issues which can affect the amount of your loan going forward. If you are a veteran, your eligibility will drive your maximum loan amount. In addition, the funding fee for zero-down loans will be 2.3% of the loan amount in 2020, up from 2.15% for regular military in 2019. The fee for subsequent use loans will be 3.6% of the loan amount, up from the current 3.3%. You can pay the fee upfront or roll the cost into the loan. These go into effect for any loan that closes after January 1, 2020. Again, if you have any questions at all, please call me.

I hope you have a safe, fun and festive holiday season with all of your family and friends!

October 2019 Mid Month Market Update

Here’s your latest real estate market update for Northern Virginia. Inventory is low, it’s a seller’s market! And with interest rates still at an all-time low, not is a great time to buy!

What do you think? How is the market in your area?

Thinking of buying or selling? I’m happy to provide you with a free market analysis if your home. Give me a call to talk about your specific situation and needs. Call me at 703-652-5777 or email at scottmacdonald@remax.net

September Market Update

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

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.

July Market Update

Mid Year Update

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It is hard to believe we are already halfway through 2019. The two questions that I have are; where does the time go and where is the housing inventory? The number of houses in Northern Virginia remains extremely low – 20% below last year and nearly 33% from two years ago. The inventory with the lowest levels is in the first-time home buyer price range which is basically houses and condos priced below $350,000. At the time of this newsletter, there are only 717 properties for sale in all of Northern Virginia at this price point. These homes are flying off the market with an absorption rate resulting in a .75 month’s supply of housing. As such, we are seeing multiple offers as there just not enough supply for the number of buyers in this market. To climb the pricing ladder, we will see the month’s supply and inventory rise. As a comparison, houses priced between $350,000 and $500,000 have a .83 month’s supply with only 872 houses for sale. The $500,000 and $750,000 priced houses have a 1.2 month’s supply with 1,252 currently on the market. Both of these numbers are low, historically speaking, so don’t be alarmed if you are thinking of selling your house. Where we see the market slowing is in the $750,000 and above price point. In this price point, we have over a 3 month’s supply of inventory with 1,683 houses for sale. This is obviously a larger price range but shows the higher you go, the longer it takes to sell. I have mentioned many times if a house isn’t compelling – it isn’t selling and the best way to make it compelling is price. If you are considering selling in any of these price points, please call me to learn how to best position your house to sell for the most money in the least amount of time.

So, what does it mean for buyers? There are opportunities in the market to own but you need to be strategic in doing so in every price point. It is important to utilize the services of a professional to negotiate for you to get you into the home you desire. If you are considering becoming a homeowner for the first time or if you are moving up or down, give me a call to learn how this can be done for you.

Have a very Happy 4th of July and please be safe!

June Market Update

The Summer Market is Upon Us!

It is hard to believe we are already through the Memorial Day holiday weekend. Time is really flying this year – at least it seems that way to me. Kids are home from college, summer jobs have started, weekend pool parties are in full swing and the real estate market is just as busy as it has been all year. Let’s start with the amazing mortgage interest rates that continue to tumble downward. They are now well into the threes for 30-year fixed rates and are expected to go down even further. This makes now a great time to buy a home! It can still be a challenge to find the right house, as inventory levels remain extremely low – 19% below last year this same week and nearly 30% below what was on the market two years ago. What is also amazing is that sales are up with inventory levels being down. Through April (latest available data point), there was one more sale this year than last year…one more is one more than before. I believe that interest rates will continue to foster sales through the summer as inventory will come on the market. Let’s talk about your plans if you are considering selling – we can position you properly to take advantage of today’s market.

All this being said, the market is not good to all sellers. The reason for this is some sellers are under the belief that their property will sell regardless of price and condition. We are seeing a lot of unrealistic prices on properties, as well as houses in disrepair or in need of substantial work to get the prices sellers are asking. We have seen average prices up over last year by 2.75% which is great, but it is not 2.75% per month like some sellers are pricing their houses at today (and “hoping” to get for them).

From a buyer’s prospective, we are still in a price conscience market. Buyer’s are concerned about paying too much and are analyzing prices closely, especially if they are using a professional REALTOR and not the internet to help them buy a house. The internet is not the way to buy a house today or anytime. The guidance and expertise of a real estate professional is more important today than ever before. If you are considering buying, we should talk sooner rather than later so give me a call.

Have a great June – enjoy the graduation parties!

May Market Update

I’m Still Amazed…

The real estate market never ceases to amaze me. We have weeks, months and years where sales go up and down, prices go up and down, inventory goes up and down, but now, we are dealing with people’s emotions going way up and way down – including real estate agents. The lack of inventory in some areas have resulted in buyers losing out multiple times on their home of choice. They become frustrated and make irrational decisions on prices, terms or location. These decisions will have an impact on their financial lives as well as their quality of life (including potentially longer commutes). When clients lose out on offers multiple times, agents get frustrated too, either because the clients don’t listen on how to position themselves or with other agents believing they were treated unfairly during the negotiations. This is why it is imperative to work with an experienced agent to help you navigate through this emotional time in real estate. An agent that has been there before, understands what is going on and can provide the right advice so you (or someone you know looking to buy) get the proper guidance and the house you want – without getting tied up in the emotion adding stress to the situation. Well, guess what? I have been through these types of turbulent, emotional times and I can lead you or someone you know through these situations, just call me.  I will help everyone stay calm and focused on the eventual task which is getting the house sold.

Keeping with the amazement theme, we still have very low inventory levels – 20% below last year’s levels. This is creating the type of market I just mentioned. Unfortunately, sellers are not immune to the emotions of selling. Unrealistic expectations of timing, pricing and response times from buyers/buyer agents make for stressful times during selling. It is important to have the right expectations when selling a house, mostly to keep the seller on an even keel. Once again, I am here to help provide the right advice, guidance and emotional balance to get you through the home selling process, just give me a call. I am happy to help!

Have a great Memorial Day!

hello spring

 

Scott’s Market Minute 2/22/19

It seems like Groundhog Day all over again….inventory levels are STILL low! And so are interest rates! Find out more in Scott’s latest Market Minute Message.

Looking to buy or sell? Now may be the best time for you to do so. Give me a call to talk more about your situation 703-652-5777 or email me at scottmacdonald@remax.net