It’s time for Scott MacDonald’s Annual Top 10 Real Estate Predictions for 2019.
What do you think? Do you agree with these predictions? Do you have any predictions of your own for 2019?
Need more real estate information? Give me a call at 703-652-5777 or email me at scottmacdonald@remax.net
October took the real estate market roller coaster ride.
Rates went up, rates came down. Sales went down, sales went up. Inventory rose, inventory came back down.
In some areas, the number of multiple contracts went down, then they went back up. Inventory of short sales and foreclosures were down, then they rose but luckily by not too much. The government shut down and the government opened back up – luckily, it was not too long and did not have a tremendous impact on the housing market.
Our emotions went up, our emotions came back down, as there was a lot of concern about delays in closings associated with the shut down because of the reduced number of employees at FHA and the IRS, but we avoided a potential disaster there. Additionally, we were worried about the government defaulting on their debt which would have sent interest rates skyrocketing, and again, fortunately, this did not happen.
Even though there were so many ups and downs, the market in October this year was still better compared to a year ago. There were more home sales, higher home prices and more homes for sale for buyers to choose from, although the uncertainty skewed people’s perception. So now you know why October was such a roller coaster for real estate.
What lies ahead on the horizon as we enter the winter market? My belief is we will be in our typical winter market. Homes will come off the market for the holidays. Motivated, savvy buyers will be out buying homes. Interest rates will remain in the low 4% range. Home prices will continue to stabilize throughout the Northern Virginia area. Houses that are priced right, in the right condition and right location will see multiple offers and our market won’t be as up and down as it was in October. Basically, we will continue to have a robust housing market locally.
To learn more about your situation, please feel free to call me today. Scott MacDonald (703) 652-5777.
RE/MAX Gateway, LLC
Wow, where did September go? It was a very interesting month – kids went back to school, football season started, the weather has changed, the housing market remained strong and the government shut down for the first time in 17 years.
It will be interesting to see how the stock market reacts to the government shutdown, what the impact will be on rates, the housing market and how long it lasts. If it is a quick shut down, we will probably see little reaction in the stock market and as a result, rates and the housing market. If it is a prolonged shutdown of a few weeks or more, the stock market will have a negative reaction, rates will rise as bond yields decrease and we could see a loss of momentum in the housing sector of the economy. What will happen to government backed loans in process and how will it affect settlements? None of these are helpful to our economy since the housing recovery leads the economic recovery as a whole. At this time, it appears as if this could last longer than just a day or two so let’s get prepared for a rocky economic road the next few weeks.
Let’s talk about the real estate market in September. We did see a pickup in sales over last year in Northern Virginia. Inventory increased slightly which gave buyers more choices. As inventory increased, distressed properties made up a lower percentage of this increase which is great for home owners. New home sales continue their strong pace of sales. Interest rates came back down as the government eased off their threat of reducing their purchasing of mortgage backed securities and we still see multiple contracts on properties in certain price points and locations.
All in all, September was a good month for Northern Virginia real estate. We need this trend to continue, so let’s hope the shutdown gets resolved more quickly than it appears it will.
If you have any additional questions or concerns, please feel free to call me directly (703) 652-5777
RE/MAX Gateway, LLC
Spring market has sprung early this year. Thinking of selling your home? Watch Scott’s Market Minute every week. Scott provides real estate market information for Northern Virginia and his Market Minute offers a quick look into current market conditions, housing inventory levels, distressed property statistics, and market projections. If you want to know what’s going on in the Virginia side of the DC Metro housing market area, contact Scott MacDonald (703)652-5777 or follow his blog http://www.scottymacsblog.com
Northern Virginia Real Estate TOP 10 Predictions for 2013 – Scott MacDonald shares his insights as to what the real estate market will hold in the upcoming year. View Past Predictions: https://scottymacsblog.com/2011/12/28/my-top-10-predictions-for-2012/
I was recently asked to provide some answers to the following questions for the RISMedia’s Real Estate Magazine…
1. As we wrap up the fourth quarter of 2011, has this year panned out as you expected it to? Were there any major surprises…good or bad?
This year was definitely a little more challenging than expected with all of the financing changes that occurred as far as the tightening of credit, increase in FHA MI, and continued issues with appraisals but overall we still are having a great year. We opened a fourth office and agents are affiliating with us which is great. Each year, I do my Top 10 predictions for the upcoming year and I hit on some, missed on others. The best miss was I had predicted interest rates would be above 6% and as we all know, I couldn’t have been any further off which is good. For the best hit, I predicted we would see new home sales prices come down and as a result we would see more new home sales and we did – at least in Northern Virginia we did. Toll Brother’s had a record year in South Riding, a community next to our Chantilly office, selling 110 houses in their fiscal year which ended in October. The community where our Ashburn office is located, Brambleton sold 354 houses in 2010; the 8th best-selling community in the country has sold over 500 houses YTD.
2. In your opinion, what will be the most significant drivers of business in 2012 and how are you preparing your company to take advantage of them?
In my opinion, there are a few. Investors will continue to play a huge role in our market. Educating agents on how to work with investors, helping them get involved in property management and learn to market themselves to attract more investors and tenants to ensure success in this arena. On the flip side of investors are first time buyers. As rents increase, with the interest rate environment we are currently in, buying may be a better option for many would be tenants. So having a plan of action to help first time buyers is extremely important. Although interest rates have been at record lows, they have not motivated huge numbers of buyers to enter the market but a sharp increase in rates could be devastating to the housing recovery so keeping rates low is critical and educating the public on the true cost of home ownership is critical. In addition, HAMP 2.0, if successful will help keep in their homes longer, this will help stabilize neighborhoods and prevent further foreclosures plus it will aid in increasing consumer confidence. So being a trusted advisor to our past clients, letting them know about this opportunity is important to growing their business as they are a trusted advisor. We also need to lobby RPAC to keep the Mortgage Interest Deduction as well as prevent the implementation of 20% down payment loans so getting our agents involved in RPAC is a focus next year as well.
3. What are your predictions for consumer confidence in 2012? What issues stand to most significantly impact consumer confidence next year and what strategies will you employ to help restore confidence?
If the press continues to pump out negative information on the economy and housing instead of putting a positive spin on what is happening and jobs are not restored, consumer confidence will stay low. It is critical that agents get the word out about their market as each market is local and even hyper local. Consumer confidence will be a key for us to continue to drive sales locally. Our market in Northern Virginia is unlike any other in the country. Our distressed property inventory is only 18% of our market, as such, foreclosures and short sales are not a driving force, our unemployment rate in Northern Virginia is in the 5% range, and we only have a 2.9 month supply of houses. It is our job to get this information out to our clients and consumers to dispel the negative news they hear virtually daily on the housing market. We need to continue to let them consumers know that if their employment is stable, the house is right for them and their family, interest rates are phenomenal and now is the right time to buy. So education is the key. Blogging, videos, email campaigns and direct mail are how we plan to get the word out to the public.
Agents, title companies and sellers beware. There is a scam that is out there that is hurting our industry. If you receive a contract from, hear or read about buyers from out of the country that are looking to pay cash for a house, that want to settle quickly, want to use your “reputable” settlement company and have never seen the house, run fast as you can from this situation. They will promise to wire the funds to your title company or the real estate company once the contract is ratified – usually late on Thursday or on a Friday – conduct a home inspection through a friend or relative over the weekend, then void the contract and request their funds be wired to their account by Monday or Tuesday at the latest. What is the problem you ask? The wire transfer is counterfeit and everyone gets caught in the middle and the buyer receives money that was never theirs from the title company or real estate office. In some scenarios, they will say their country won’t allow them to wire the funds but will have their friend or relative drop off a certified check. These funds too are counterfeit and the funds should not be released to the buyer unless verified they are valid funds.
What can you do to prevent this you ask? First, make sure they have seen the house – not just pictures on the internet. You wouldn’t buy a house this way and only a very few select people would – military or investors being ones that come to mind. Also, do as we do, Google the buyer, the buyer’s agent and the lender on every case. See what you can find out about them. See if they are on social media sites like Facebook or Linkedin. Learn all you can about them. In addition, check DPOR and see if there are any outstanding violations with the agent at the state level as they too may be in on the scam. Conduct your due diligence – ask to see “proof of funds” from a reputable source and Google the source if you are not familiar with them. And lastly, don’t accept the contract until the funds prove to be valid which can typically take 3 to 4 days of deposit into an account.
Here are examples of what other agents are receiving from the web. They may take on different forms of these emails so be on the alert. Some agents believe this to be a scam to sign up for Docusign but it is really a scam to get money.
One agent received a lead through Realtor.com
Att. Please i will need an offer on this,
Thank you very much for the email, I would like to purchase this property MLS # 4214263, located at 15380 Little Stone Way Alpharetta. The indicated price is $613,000.00 Please note my offering price is $600,000.00 Please send me the contract for this property and the following phrase should be added on the contract.
1. I will want to close on 12th June, 2011
2. I want to put down $30,000.00 Earnest money
3. I want to put contingency on inspection on the contract.
I and my wife will be buying the property and the buyers name should be. Leo Thang and Jiao Thang. Our address is 4645 Jane Street, Toronto Ontario Canada M3N 2K9
Please forward me a purchase contract agreement via docusign format, their website is http://www.docusign.com/ or any other electronic document I don't have access to a printer or scanner here therefore I can not sign and send it back in PDF format I am in a remote area now and i will like to do the signing myself on behalf of my wife.
I would also like to use a reliable title company for the closing. Kindly advise regarding this issue.
Thanks for your understanding. I await the purchase contract agreement as soon as possible.
Regards,
Leo Thang
Tel;003463236828
And some just receive leads through email…
Larry Sabo – Realtor in California
Dear Larry Sabo,
Att. Please i will need an offer on this,
Thank you very much for the email, I would like to purchase this property MLS # 116400, located at 3403 Beaver Brae Dr South Lake Tahoe, CA 96150.The indicated price is $659,000.00 Please note my offering price is $640,000.00 Please send me the contract for this property and the following phrase should be added on the contract.
1. I will want to close on 13th June, 2011
2. I want to put down $30,000.00 Earnest money
3. I want to put contingency on inspection on the contract.
I and my wife will be buying the property and the buyers name should be. Leo Thang and Jiao Thang. Our address is 4645 Jane Street, Toronto Ontario Canada M3N 2K9
Please forward me a purchase contract agreement via docusign format, their website is http://www.docusign.com/ or any other electronic document I don't have access to a printer or scanner here therefore I can not sign and send it back in PDF format I am in a remote area now and i will like to do the signing myself on behalf of my wife.
I would also like to use a reliable title company for the closing. Kindly advise regarding this issue.
Thanks for your understanding. I await the purchase contract agreement as soon as possible.
Regards, Leo Thang
As you can see, Leo Thang is just one person attempting this across the country – there are sure to be others. Become educated on the red flags, stay on alert for anything unusual similar to this situation, and keep yourself and your sellers from becoming victims of a scam. Get it? Got it? Good!
Now, go sell something – legitimately!
There are home buyers out in Northern Virginia but they are savvy, price sensitive and condition critical. As we have seen in the papers, read online, and heard on the news, the rest of the country is experiencing a double dip in home prices, and waves of foreclosures are going to hit the market spiraling prices even further. All of this has made buyers in our area become very cautious and has lowered consumer confidence nationwide.
Why do you ask are they this way? Well, most of them are from someplace else and they have seen streets riddled with real estate signs, are from areas that have a 41 month supply of houses versus our 3.1 month supply of houses or have friends and relatives who have been unable to sell their house in other parts of the country. This has an impact on their buying decision here and yes, they hear our area is different and understand the underlying reasons why our market is strong but they are still looking for “a deal”. They scrutinize each property looking for excuses not to buy them versus finding reasons to buy them. When there is a home that offers the right price (often below market) that has been staged (painted in neutral or trendy colors, new carpeting and de-cluttered), in perfect condition (no broken window seals, leaky faucets, etc.) and in a great location (backing to trees, end of cul-de-sac, etc.) they swarm on this property like vultures. Many times we will encounter multiple offers on these types of properties and see them escalate above list price.
If you are a seller and your home hasn’t sold, what should you do? Lower the price – it is the least common denominator and makes up for many areas where the home may be lacking such as in condition or location. Get the home staged, by a professional. You could also offer a higher commission to the buyer’s agent as an inducement to sell your house. Many sellers or listing agents are offering a lower commission as many buyer agents have accepted lower commission rates in the past few years as a result of short sales and foreclosures (banks) only paying a lower fee so paying more can set you apart from the competition. Be ready to negotiate to get your house sold.
If you are a buyer, what do you do? You should be ready to be in competition if you are looking for the perfect house at the perfect price and be prepared to include an escalation clause with your contract. As was mentioned early, these properties are typically seeing multiple offers that go above list price. Buy a new home – pick your own colors, location, and avoid the competition. Many builders have adjusted to the market and are priced to sell. Make an offer on an almost perfect house and see what happens. Often times, as homes stay on the market and sellers have many visitors with no contracts, they tend to be more reasonable with what the market is telling them in regards to pricing. The idea for buyers is to just buy. The housing affordability index hasn’t been this high since 1979! Interest rates are at their lowest level this year and prices are reasonable plus, we have jobs and stability in our market place.
If you need to sell, this is a great time to do so. If you are a buyer, you shouldn’t delay – prices and rates are not going to get lower in our area making this an opportunity of a lifetime. Contact your RE/MAX Gateway professional today and get packing!
We recently attended the RISMedia convention in New York and have compiled notes that I will share with you on what was discussed and comment – occasionally how it will affect our business and ask that you do research on certain topics to inform yourself to give our clients the most up-to-date information so they can make the right decisions when buying or selling a house.
Finance update
FHA–
There have been two price increases on FHA loans recently – upfront MI and monthly MI.
-Lenders paid less on FHA loans.
-FHA loan amounts decrease.
-Potential increase in down payment requirements are also on the horizon.
-FHA Loans are 30% of the market.
-MI – 5% down training on MI is required for agents who want to stay in the know!
Additional facts on the market:
-2/3 mortgage applications don’t go through.
-Do consumers understand the process of obtaining credit – no – Agents are transactional
-7 million people have been out of work for 26+ weeks.
-19.8% of all prior mortgages are 90+days delinquent.
-Eminent defaults are on the horizon – stay tuned.
-60 million + people with less than 630 credit score.
Lenders are looking for point of sale contact with Realtors
-Want to help you grow your biz and attract more agents into their database?
The question is how?
-Training and education
-Shared marketing dollars
-Leads
-Exposure to listings through marketing ventures.
– What else can they provide?
GSE’s are stagnant on Capitol Hill and we shouldn’t expect progress anytime soon. Too much else is on their plate.
270 points in Dodd-Frank bill – The lending industry WILL change. We are expecting to receive talking points of the bill for you to share with your clients so stay tuned!
Do you know what Qualified Residential Mortgages are? It is important to stay up on the trends. QRM will push a 1/3 of Buyers out of market. The comment period on QRM ends 6/10/2011 – get in the know and make your comments to your elected officials!
“Stuff” is thrown up against the wall right on Capitol Hill now to see what sticks
– A tax on new home sales was proposed so that the existing home inventory could get absorbed and new home sales would subside as a result.
What is the HAMP Mod’s default rate within 6 months? It occurs 60% of the time.
Average consumer has 13 credit obligations – 9 credit cards.
48% of college students leave school with bad credit
58% of college grads move home because of poor credit.
Ask your clients, “What is likelihood of you buying furniture, blinds, etc., if you do, can you really afford this house with this additional debt?”
Become a long term trusted advisor for your clients – provide valuable content – early and often.
Education is a continued effort so get educated. Get it? Got it? Good!
Now, go sell something!
Scott's Motivation and Real Estate Market Updates 