market update

Coast to Coast “Buzz” – Market Rebound!

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As we enter the 4thquarter of the year, we continue to see strong sales in real estate, low inventory levels of existing homes on the market and phenomenally low interest rates.  I just got back from the RE/MAX California-Hawaii Regional meetings and all the buzz was how the market is on the rebound and how there has never been a better time to buy a home.

It was funny, as I was headed to the airport back home yesterday, the taxi driver overheard my phone conversations.  When I was finally off the phone, he asked if I was in real estate.  When I confirmed his suspicion, even he commented – unsolicited – that more people should be buying a home today.  He had no real estate experience and he couldn’t understand why people were paying more in rent than if they were to buy under the current conditions.  He even made the comment that workers at 7-11 could really buy a house today because they could actually qualify for a mortgage -not like wat was happening in the past.

West Coast to East Coast – the “Buzz” is Market Rebound!

We are at historically high affordability rates for home ownership which makes today a great time to be a home owner or investor.  From the investor’s side of the equation, there are many people who cannot buy because of past history, some are only relocating temporarily to the area, and some are just plain old gun shy to buy because of the negative housing market over the last 5 years.  Therefore, with prices down from the all-time highs but making their way up the ladder, a good renter pool, great financing options for investors – now is the time to get in the game!  Home ownership is a long term investment strategy that can pay big dividends later.  To learn more about becoming an investor, call us today.  We would be happy to speak with you about your financial goals and objectives.

Scott’s Market Minute: Fall Sales Picking Up!

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School days and Market Changes..

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The real estate market in Northern Virginia appears to be taking a quick breath so far in September.  Through the first eight months of the year we were on a whirlwind tour with multiple offers, few days on the market and escalating sales prices, but as the summertime came to a close and with the Labor Day holiday and kids going back to school we have seen a slight slowdown in the market.

The inventory of resale homes available remains low at just over 5,400 which is down 25% from the same time last year.  In addition, sales of existing properties are up the last 30 days by 4% over the same period last year.  But the number of houses on the market is up from the previous week and the number of weekly sales the last four weeks has declined each week.  And prices are down slightly from June to July – August prices are not yet released.  As we look at these numbers, again, my belief is it is August, one of the historically slow months for real estate.  People go on vacation, families are gearing up for their kids to go back to school, it is the end of summer, and people are getting back into routines in their lives.

As we look back, in a National report by Corelogic, the July Home Price Index (HPI) showed home prices-including distressed sales-increased year-over-year by 3.8 percent in July. On a month-over-month basis, prices increased 1.3 percent from June and July marked the fifth consecutive increase in home prices on both a monthly and yearly basis.  In Northern Virginia, we are tracking very close to the year of year stats with a 3.2% increase over last year.  Interest rates remain extremely low on all loan products for housing which is good for sellers, more buyers can qualify to buy – buyers, payments are lower and home owners looking to refinance to stay in their homes also have the opportunity to lower their payments.

All in all, we are experiencing a great real estate market in Northern Virginia and we should continue on this path of recovery.  The only issues that potentially could impact the local market is sequestration and Dodd-Frank reform so we will keep on top of these fronts for you and report back as we know more.  If you ever have any questions, always feel free to call us – we are here to help you.

And the market goes on and on and on…

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It is amazing what a difference our real estate market has experienced this year versus the last few years.  Previously we were inundated with short sales, foreclosures, dropping prices and very little confidence in the market.

Today, we are at a low point in the number of short sales and foreclosures on the market since I started keeping track of them over two and a half years ago.  In October of 2010, we had 1,460 short sales on the market, today we have only 386.  Additionally, foreclosures are at a low point as well.  In November of 2010, we had 516 foreclosures on the market and today we only have 178.  Additionally, prices were falling in the Northern Virginia area.  According to RBIntel.com our market prices bottomed out in February of 2009 with an average sales price of $307,225.  Today our average sales price is $469,800.

We are still off our highs of 2006-2007, but we are headed in the right direction.  All of this information coupled with low interest rates has restored confidence in our market.

Rates?  Did I just mention rates?  Yes I did and they are ridiculous!  Yesterday I heard one of our clients locked in a rate of 3.25% with a lender credit of 2%.  We continue to see rates decline which leads to the question of how low can they go before more people act on refinancing or purchasing?  Only time will tell.

The last area I would like to touch on is our rental market.  The inventory of active rentals remains low and interest in these properties remains high.  At this time, many people prefer to rent over buying as they remain skittish about buying or are in a situation such as a recent short sale which prohibits them from being able to purchase.  This situation has resulted in rental rates rising making investing a viable option for many people – maybe even you!

If you would like more information on how these numbers affect you whether buying or selling a house, or if you would like to discuss becoming an investor, pick up the phone and give me a call.  I would love to speak with you about your situation in more detail.

 

 

Is the spring market coming?

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In Northern Virginia our inventory levels of active resale homes for sale continues to decline.  We are down to just over 4,600 homes on the market and we have a 1.8 month supply of homes.  Houses that went under contract the last 7 days hit a 6 month high this past week.  In a nutshell, houses are selling.  Why is this happening?   Interest rates hit another record low, we are creating jobs here, rental rates are increasing and our population is growing putting more demand on housing.

Last week I was asked when will we see the spring market or in other words, when will more houses be coming on the market?  Some people say when the banks start releasing foreclosures, some say mid-March, and some say when their price rise.  Let’s analyze each of these responses.

So far we have not seen the foreclosures hit the market and as a matter of record, the inventory has actually decreased to a 6 month low with only 311 currently for sale.  In addition, “Notice of Trustee sales” published have actually remained very low as well averaging only 3 pages per day versus substantially higher numbers in 2008-2010. Lastly, I started tracking short sale inventory just over 2 years ago and we are at an all-time low in this area as well – only 651 are for sale in Northern Virginia.

As far as the inventory levels increasing in mid-March, only time will tell but several agents have indicated they have houses in the process of being prepared to go on the market around this timeframe.  If they are not only preparing them for sale but are going to price them accordingly, they will sell.  Two properties we listed on Friday received multiple offers because they were price properly and in the right condition.  And now for the statement, “when my price increases, I will sell” is a tougher one to answer for many people.  Rise compared to what?  When they were purchased?  Compared to 2004-2007 prices?  Compared with the last sale in their neighborhood?  Until these questions can be answered, we can’t help them.

We continue to have one of the best real estate markets in the country and it will be this way for the foreseeable future.  Please feel free to contact us to learn more about how this market affects you and your situation.

A great time to buy…now?

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It is definitely an interesting time in real estate in Northern Virginia.  We have extremely low inventory levels that remain below normal for this time of year.  As an example in January of 2008, we averaged 15,500 active listings, in 2009 it was 10,200, in the year of Snowmagedon in 2010 it was 4,800 because people took their houses off the market and agents couldn’t get out and about to list them, in 2011 it was 5,800 and now we are at 4,700.  What is interesting to note is the month’s supply of houses in the same time frame – 2008 it was 10.8, 2009 4.0 and since then it has been 2.3 in 2010, 2.8 in 2011 and this year 2.2.  What this clearly indicates is there are buyers out in the marketplace looking for homes in the winter months – not just the spring months now.  Interest rates remain very low – below 4% for 30 year fixed rates – jobs are being created here so people are moving into the area and rental rates are rising throughout Northern Virginia. 

If your family circumstances, job status, or you just have the desire to sell your house and move up to a bigger home, now is a great time to do so.  Houses that are priced right, in the right condition and staged properly are attracting offers.  One of the biggest parts of this equation is the price – price sells today.  Sellers cannot price a little high for negotiations as we have seen that they languish on the market in this situation.  Price it competitively and it will sell.

Buyers have a great opportunity today.  The housing affordability index is at an all-time high  and in many cases house payments are less than rental payments even before considering the tax benefits of home ownership.  For buyers looking for the long term benefits of home ownership, there historically has not been a better time.  Prices are remaining stable, interest rates are low, and the housing industry is on the rebound meaning we have already hit the bottom and we are on the upswing if you were trying to time the market.

Whatever your situation is, we can help.  Please feel free to contact us to discuss your personal needs in more detail and see if now is the right time for you to make a move.

What’s 2012 looking like?

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As we enter 2012, there is much speculation about real estate yet again.  Will there be more foreclosures?  Will housing values continue to drop?  How long will interest rates stay low?  When will lending guidelines reverse their trend of more restrictive policies?  Should I buy or wait?  Will short sale guidelines become more uniform? What will it take to improve the housing market?  Well, as I have said in the past, my crystal ball is broken but I can look at trends, read reports and provide some guidance.  Let’s take a look at what we have seen recently.

Will there be more foreclosures?  As the inventory of short sales decrease and the notice of trustee sales in the papers remain low, we will not see a tremendous amount of foreclosures hit the Northern Virginia market.  When we see an increase they won’t have a significant impact like they had on our market in 2008-2010.  The inventory will come when banks begin to evict people who have been living in houses mortgage payment and rent free for several months.  Additionally we will see some foreclosures come on the as people lose their jobs.  Again, the impact will not be severe in my opinion and will be absorbed as inventory levels are at 2 year lows in Northern Virginia.

As inventory remains low, prices will remain stable and in some areas they will increase.  If owners invest in their homes by upgrading kitchens, bathrooms, and updating carpets, paint etc. they will see the return when they sell.  Homes in the right condition, staged and priced properly see multiple contracts and often get bid up above list price.

Interest rates will remain low for the foreseeable future. The Federal Reserve has stated they will keep their rates in the same range through mid-2013 and as such, mortgage rates should remain low.  There are of course some outside factors that could change this such as the European debt crisis, and energy costs rising but overall we will be in the 3.75-4.5% range for mortgage rates.

It doesn’t seem that lending guidelines will restrict any time in the near future.  Underwriters continue to ask for last minute items, credit is being checked for a second time just before settlement, requests for obscure items are being asked for and when you think you’ve heard it all, you hear something new.  On the bright side, mortgage insurance companies are becoming more flexible in their requirements which is helping in some instances.  Unless it is mandated by the government through the GSEs, I don’t see guidelines relaxing for some time.

If someone has found a home that meets their requirements as far as location, size, price and affordability then yes, now is the time to buy!  Especially if it is for a long term hold, you need to buy now.  In a recent survey, 78% of Americans believe housing is a great investment.  As previously mentioned, rates are excellent and you need to take advantage of them as well.

We are dealing with fewer short sales in Northern Virginia today but they do seem to be closing at a higher rate than before which is great for both buyers and sellers.  We anticipate this trend to continue.

So what will it take bring the market back? In a two words, I say, consumer confidence.  How does consumer confidence improve?  Here are a  few ideas – job creation, lower energy costs, and more positive press on the economy.  Let’s see how this goes with the election coming up later in the year.

With a little more insight into the market, go help people make the right decisions when buying or selling houses.  Get it?  Got it?  Good!

Now, go sell something!