Wow, in the blink of an eye, 2023 is over. A lot happened during the blink, so it was eventful, but time sure does fly. You may be asking what happened in real estate this year. Let’s start with interest rates because they have the biggest impact on our business. If you recall, they started the year at just over 6% and then steadily increased until October. This is when they hit their 20+ year high, topping out at about 8.25%. Since then, we have had eight straight weeks of declining rates resulting in a much lower rate of 6.67% today. This is well below our 50-year average of 7.75%, which is fantastic – purchasers are taking advantage of these lower rates.  

But, along with the steady rise in rates, we had a lot of volatility during this time which, of course, impacted sales. At the beginning of the year, we were predicting the total number of sales in the US to decline from just over 5 million to 4.6 million sales. This is down from 6.1 million sales in 2021…huge drops, right? Well, the increasing rate environment coupled with volatility in the interest rate environment – plus the Fed raising their rates because they were trying to control inflation – will result in sales at just 4.1 million in 2023.

This being said, we would have had more sales if we had more inventory. In Northern Virginia we started the year with 1,611 homes for sale, we reached a high of 2,044 in October and will finish with just 1,065 houses for sale. The reason for low inventory? Interest rates – plain and simple. People are married to their rate and payment. Eighty-two percent of people with a mortgage have a rate of less than 5%, so they don’t want to give up their low rate for a higher rate – at least right now. Additionally, prices continue to go up. At the beginning of 2023, I said prices would continue to increase at the rate of 3-5%. Well, they increased 3.5% so this, too, has prevented some from putting their home on the market. Higher rates and higher prices equal less affordability, and people are staying put. 

Nationally, people predicted prices would fall and inventory would increase…they were wrong on both fronts. In the US, prices have gone up over 5%, and inventory, as I mentioned, is very low.

So, my predictions for 2024 are:

• Interest rates will continue to decline as inflation is in check – and it is an election year. I believe they will be in the low 6’s to high 5’s for most of the year.
• House prices will increase by 1-3% due to strong buyer demand and lower rates which will put upward pressure on prices.
• We will see more houses sell. People will trade a 4-5% interest rate for a 5-6% rate so more inventory with more demand equals more house sales.
• As wage growth and employment remain strong, I don’t believe we will go into a recession – but if we do, it will be bad for the economy but great for real estate.  

Give me a call if I can help answer any questions – and happy new year!

As we all know, today’s headlines tend to focus more on capturing attention rather than accurately representing reality. It’s crucial for headlines to adopt a localized approach and provide a precise, reliable depiction of the real estate market. Unfortunately, many of these headlines contain misleading statements such as skyrocketing inventory, crashing sales, and declining prices. These statements fail to reflect the actual condition of our local market.

Another issue arises when interest rates experience a significant increase. Media outlets often emphasize the rising rates, but little attention is given to the information when rates decrease, as they have recently. Currently, interest rates are at their lowest levels in the past two months. Additionally, loan applications are on the rise. This imbalanced reporting can lead to people making incorrect decisions when it comes to selling or buying a property.

To shed light on the true situation, it’s important to note that our inventory has either remained stable or slightly decreased. In fact, inventory levels dropped by 11% in Northern Virginia just last week. While our sales are maintaining a good balance, they are lower compared to previous years. However, it’s worth noting that there are still daily transactions happening in the real estate market. As a result, the supply of available homes is currently at a low level of just 1.2 months’ supply. The decline in sales can be attributed to lower inventory levels compared to previous years. If you would like more information on the reasons behind this, I have discussed them in previous articles. Feel free to reach out to me for more details. If there were more houses available for sale, it’s highly likely that sales would increase, given the robust demand that persists in our market. Moreover, with the recent decrease in interest rates, we anticipate even stronger demand in the short term and into 2024.

Now, let’s talk about the great news regarding RE/MAX Gateway’s year-to-date success. Our transaction count through 11 months is up by 1%. Our sales have increased by 4%, and the number of listings we have taken has only decreased by 5%. In contrast, the Northern Virginia market is down by 24% in transactions. This means that our agents have outperformed the market by 25%! Our sales volume is down by 4%, while the Northern   Virginia market is down by nearly 21%. Once again, we are outperforming the rest of the local market. If you are looking for results, feel free to reach out to us – we get the job done!

If you are seeking accurate and reliable information about the real estate market or if you want to discuss the reasons behind low inventory levels, I encourage you to contact me. I will provide you with the proper insights and data needed to make well-informed decisions that align with your lifestyle needs. Enjoy the holiday season!

The real estate market in Northern Virginia is demonstrating remarkable stability, with approximately 2,000 active homes for sale. The month-to-month sales indicate a consistent flow of approximately 1,700 homes, leading to a 1.3-month supply of housing. This indicates that the market is still favorable for sellers, particularly when homes are appropriately priced and in good condition. Furthermore, interest rates have settled between 7.5% – 8%, and buyers have adjusted to these rates, which has positively contributed to the overall sales activity.

It is worth noting that the current inventory of homes for sale is fewer compared to previous years, resulting in a decrease in sales volume. However, one can reasonably infer that the increased availability of homes on the market would likely correspond to higher sales, given the number of buyers in the current market. Consequently, house prices have remained high and, in many locations within Northern Virginia, have even witnessed increases.

Looking forward, the market is expected to maintain its current trend with a deep pool of buyers and low inventory, which will likely sustain high prices. This indicates that there will be no housing price crash soon, which is encouraging for both homeowners and prospective buyers.

As a homeowner, if you are interested, I can provide you with an equity analysis to help you gain insight into your current financial situation. This analysis will enable you to gauge the value of your home and the equity you hold, which can be beneficial for various financial decisions such as refinancing or determining the potential profitability of selling your property.

For prospective buyers contemplating purchasing a home, it is an opportune moment to act. As previously mentioned, prices are on the rise, and the current market conditions favor buyers who wish to take advantage of the prevailing prices. I am here to assist you throughout the entire home-buying process, offering guidance and support to ensure your housing goals are successfully achieved.

Lastly, I would like to extend my warmest Thanksgiving wishes to you. I hope you have a delightful time celebrating with your loved ones. Should you have any further questions or require any assistance, please call me. I am never too busy for you or your referrals!

The Federal Government was able to avoid a shutdown by passing a last-minute funding deal to keep the government open for 45 days. One of the keys to getting this temporary measure passed was removing the funding for Ukraine and its war against Russia. This is a short-term solution, but they were able to make happen – for now. Luckily, thousands of government workers and government contractors will not be losing their pay.

How would a government shutdown impact real estate? If someone is a non-essential government employee, they will temporarily lose pay. If they are a government contractor affected by the shutdown, they will completely lose pay. This impacts consumer confidence and lifestyle, which is the consequence that would have the largest impact. The next area of concern is those requiring flood insurance – FEMA would close during the shutdown, so closings will be delayed.

Most other areas would not be affected as much, which is good news for real estate. Freddie Mac and Fannie Mae are funded by lenders and not the government so they will be operational. The VA and FHA will also be able to respond and loans will close through them. The IRS will not be shut down so verifications will be available for lenders. Local governments won’t shut down, so title searches and recordation of transactions won’t be affected. Again, it is the psychological impact and loss of wages that will impact the market the most.

So, how is the real estate market today? Rates continue to rise so it is affecting some price points – but not all. Each market has its sweet spot but most areas continue to see good activity as well as multiple contracts. All that being said, we are seeing an increase in the days on the market, and houses aren’t jumping off the shelf like they were before. Pricing is critical today so if you are thinking of selling, let’s have a conversation. People need to buy houses despite the rates, so houses are selling. It is not all doom and gloom like the media portrays. We have just over 2,000 houses for sale in all of Northern Virginia and just a 1.3-month supply of homes. Don’t be fooled by the headlines. As always, call me to learn more – I am here to help.

Happy Fall!

Is it seasonality or is it a slowdown? This is the big question on many minds in the real estate business.  Until recently, we had always experienced a slower August, but during the COVID/Pandemic years, we did not experience the same seasonality in the market as we had in years prior. Traditionally, we’d see the market slowdown in July and August because of vacations and kids returning to school or college. The holiday season would normally bring a similar situation in November and December. With the low-rate environment between 2020 and 2022 and the work-from-home/remote work situations, the real estate market never slowed down during that time. As a result, a lot of real estate professionals are not used to the current market that we are in. Most are also not accustomed to rates being in the 6% and 7% range – or sometimes even higher. Today’s market requires a skilled Realtor to help you navigate the real estate market if you are looking to sell or buy. 

With the combination of the lock-in effect of low rates, lack of new homes being built over the last 14 years, and people staying in their homes longer than ever before, the result continues to be low inventory levels of homes for sale. Mortgage rates have more than doubled in the last year so this, too, has greatly impacted the real estate market. With so much volatility in the market, you must choose to work with a Realtor who knows how to navigate these rocky times.

I believe we are in a seasonal slowdown right now. I expect things to pick up after the Labor Day weekend and we should continue to have a normal pace of sales until mid-November. Interest rates will continue to fluctuate up and down right around 7%, which today’s buyers are now accustomed to. Some houses will still generate multiple contracts and others will stay on the market for weeks. We will basically be in a normal market. My advice is to be patient. If you are a seller don’t expect multiple offers and a quick sale because it may not happen. Everything will be OK – your house will sell if you get it in the right condition and price it properly. If you are a buyer, there will be a house for you – be patient, but also move quickly if you find the right one because there are other people looking as well. 

I am here to help you so please feel free to reach out to see how I can help you with selling your house or buying your next home.

As always, time really flies during the summertime. It is hard to believe that we are already entering August. In the real estate world, we typically see a slowdown this time of year with vacations, back-to-school activities, and the last month of “summer”. With rising mortgage rates, lower activity, and high demand, I’m interested in what we will see for our real estate market for the rest of the year. 

While this activity this year has made it difficult to predict, I believe we will see more of what we have seen so far this year. Inventory will remain low, and with the high demand due to demographics and life circumstances, prices will continue to increase. One thing to remember is time to contract has remained at 16 days for the 4th week in a row, which means we are in a strong seller’s market. In the past, time to contract usually begins to slow down later in the summer as the fall approaches, but the elevated competition among home buyers in the Northern Virginia region from the lack of inventory is keeping the time to contract low and prices high. 

Another thing to remember is that prices don’t increase as rapidly this time of the year as they do in the Spring Market. As a result, you will start to see headlines saying things like ‘Prices are Plunging’, ‘Prices Continue to Fall Due to Higher Mortgage Rates’, ‘Prices are Plummeting’…and so forth. Do not be alarmed. We will see a decrease in the pace of price appreciation, but not a depreciation in housing prices. There is a huge difference, but the media loves to terrify – more than clarify – what is truly happening in the real estate market. It’s always best to contact me when you are looking to sell or buy to get the right information on the market and market conditions.

So – where are we today on inventory levels, sales, and prices? As of the end of July, we had 1,746 homes for sale in Northern Virginia – this is 53% below last year and 58% below the last five years’ average for the same week. Contracts written the previous 7 days were at 572 sales – 20% below last year and 35% below the last 5 years’ average. We currently have a .9-month supply of homes available – last year it was 1.5, so we are experiencing high demand with low supply. Lastly, prices are up 1.3% over last year, and if we go back to 2019, the last “normal” year before the pandemic, prices are up 26%. As you can see, homeownership is a great way to build wealth. The good news for our area is that out of the top 20 Metro areas in the US, we have had the most stable market in terms of prices. We are not experiencing the drastic increases and now, the subsequent declines, like other areas. To learn more, please feel free to call me.

Stay cool!

The real estate market continues to amaze me.  As many of you know, interest rates more than doubled in 6 months.  From May to November, the rates went from 3.5% to over 7%. At that time, the market came to a halt as there was much speculation about how high mortgage rates would climb (and how that would affect prices). Most people said rates would trend downward, but to date, that’s incorrect in our area. Fast forward to today and it appears that buyers have now settled into mortgage rates being in the 6-7% range. This is resulting in sales happening again along with the price growth that I mentioned.  As a result, today’s market is filled with uncertainty due to several factors. 

Both sides of the aisle in DC are dealing with the upcoming debt ceiling, inflation, and rising interest rates.  As a matter of fact, today’s rates are over 7% again. The other looming issue is that people are married to their current homes because of their super low-interest rate. Many people have FOMO of their 2.5 – 3.5% interest rates. This results in a huge shortage of homes for sale in our area. With high demand, this creates multiple contract situations on many homes on the market today.  On the flip side, we have a strong job market, a growing population, and a stable economy which all has a positive impact on the real estate market – especially for sellers. Additionally, the area’s natural beauty, cultural amenities, and excellent quality of life can make it attractive for people to relocate to the Northern Virginia area. This makes today’s market tough for buyers.

It is important to note that even though market trends and economic indicators can provide an idea of what may happen in the future, they cannot predict sudden market disruptions or unforeseen events that might impact the real estate market. The banking industry being in distress is one area of concern, as is the Fed continuing to raise the overnight rates they charge banks. With so many factors affecting the real estate market, it is always recommended to consult with me as your professional real estate agent to help you determine if now is the right time for you to sell or buy. I can provide you with market data including inventory levels, absorption rates relating to sales, month’s supply of houses available, immediate sales, and other data that can be valuable to you when you are considering selling or buying a home today.

There are also additional data points that are important to consider, like the number of houses with multiple contracts, how high above list price houses are selling, what contingencies are being waived or accepted by sellers, and the timing of sales from contract to close. It is a complex time in the real estate industry, to say the least. The market today is complex as you can see. I am here and happy to help, so please feel free to call or email me today.

Enjoy the summertime weather!