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
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
The real estate market is moving steadily along today but with reservation. As corporations continue to move into our area and the state attracts businesses all over the Commonwealth, we were ranked #7 in the most transient states in the country – pretty impressive for those of us selling houses! In order to be successful, you have to find the buyers and sellers so get out there and get busy looking – they won’t come to you, you have to go to them!
In addition to this, existing home sales increased 7.6% in April. This was expected as the home buyer tax credit was set to expire but let’s keep a close eye on this in the coming months and see if the sales momentum continues. We should be in good shape and should continue to outpace the rest of the country as we continue to create jobs, have affordable housing prices, and interest rates remain low.
Not only did existing home sales increase but so did new home sales! New home sales rose 14.8% in April – the highest performance in two years! Be wary however as the pace of new home permits dropped 10.7% in April as well. We can expect this number to drop next month as a result of fewer permits being issued couple with low builder inventory.
Mortgage interest rates also continue to be a driving force in continued sales. This week it was reported interest rates are at their lowest level since December as the instability in financial markets overseas have lowered borrowing costs. If rates continue to stay low, buyers will understand the fundamentals for ownership are strong and will continue buy homes.
Another key to the market continuing to blossom this spring is consumer confidence. As the economy continues to improve and we ease out of the recession, consumers believe their personal situation is improving and as a result, they are spending again. As we know, consumers drive the recovery in their “perception” of their situation and not necessarily, reality.
Now, let’s talk about the reservation part of the blog. Although refinance applications remain strong – they have increased 3 consecutive weeks – purchase applications have continued to decrease and have done so four consecutive weeks. As a result, purchase applications have dropped to their lowest levels since 1997. Keep a close eye on this number as it indicates future settlements on home purchases.
Next, is the double dip in home prices that Dave Stevens mentioned at our year end meeting in December. Two price indices – the dreaded S&P Case-Shiller and the Federal Housing Finance Agency reported housing price decreases in the first quarter. As we have mentioned, the under $400,000 market and the $800,000 – $1,000,000 market continue to be strong but the inventory priced between $400,000 – $800,000 are still trying to find the bottom and that is where a majority of our houses are priced today. Couple this with the fact that mortgage delinquency rates have hit 10% – a record. If these homes go into foreclosure and don’t end up as a HAP sale or a short sale, prices could continue to slide.
Lastly, another monkey wrench that could be thrown into the equation that could affect getting home loans is if Fannie Mae implements the right to pull credit up until the day of closing. It can have a significant impact on a purchaser’s ability to close on their loan if their credit score goes down by just one point. As we know, it is monkey see monkey do in the lending arena so others may implement this same strategy to limit the number of defaults in the future. Stay tuned for further details.
So, what do you do? Work! As previously mentioned – people are buying and selling houses here in Northern Virginia – get out there and network. Create urgency – rates won’t stay this low forever, prices will increase and if you can afford the home today, buy it. Be a professional Realtor and set yourself apart from others in the industry and you will survive in any market. Get it? Got it? Good!
It is true! The housing market is making its comeback. Last week we reported sales of existing homes rose 3 consecutive months and that new home sales were up in June over 3%. Well, guess what? New home sales were up 11% in July! This is more great news for us to “build” upon moving into the dog days of summer.
What is the reason for this growth? There are several factors in my opinion: low rates, the right price point, multiple offers on existing homes, the tax credit and the market conditions. As we all know, rates have been low for an extended period of time and according to Ben Bernanke in his economic update, they are going to remain low as a strategy to aid in our economy’s recovery. Builders, banks and home owners alike have been reducing prices to encourage offers – well, it appears that the sale of the century for housing has worked and buyers are coming out of the woodwork. As these buyers are making offers on resale properties and losing out to other buyers, the frustration has lead them to new homes – no multiple offers on to be builts! As the tax credit has aided in getting first time buyers off the fence, it has also spurred activity in the move up market which is resulting in the increase in new home sales as well. And lastly, the market has been decreasing for over 4 years – June or July of 2005 is when we earmarked the down turn in housing. Additionally, as we all know, what goes up must come down and vice versa so it was about time for the market to change. You can’t keep a good thing down.
The housing recovery is critical in so many ways to the general economy’s recovery – let’s keep the momentum moving in a positive direction by spreading the word. Get it? Got it? Good!
Scott's Motivation and Real Estate Market Updates 