remax gateway

January 2025 Market Update | Another Year in the Books – Reflecting on 2024 and Looking Ahead to 2025

Leave a comment

Another year has come and gone, and what a year it was! So much happened—and some things didn’t happen as predicted—that it was a whirlwind for the real estate industry. The most significant changes came with updates to our industry practices, particularly regarding commissions.

One major shift was that commissions are no longer allowed to be published in MLS systems or websites connected to them. Additionally, buyers and agents are now required to sign an Exclusive Right to Represent Buyer Agreement before viewing homes. While this has been the law in Virginia since 2012, it’s now more crucial than ever to determine how an agent’s commission will be paid if it isn’t negotiated within the contract. On the bright side, these changes have brought greater transparency to how real estate professionals are compensated.

What Didn’t Change in 2024?

Despite widespread predictions, interest rates did not fall as expected. Many anticipated rates would dip into the mid-5% range, but they stayed elevated throughout the year, even reaching the mid-7% range. This kept many homeowners from selling, resulting in continued low inventory instead of the expected rise in homes for sale.

As a result, sales remained flat compared to 2023 and may even show a slight decrease when final numbers come in. Similarly, while some forecasted a drop—or even a “crash”—in home prices, the opposite occurred. Prices increased, which added to the wealth of homeowners. However, rising prices and rates made affordability a significant challenge, especially for first-time buyers.

Another area where expectations fell short was regarding Federal Reserve rate cuts. While many predicted six cuts in 2024, there were only three. I felt six was ambitious, so I predicted three, which turned out to be correct.

What’s Ahead in 2025?

Here are my predictions for the coming year:

  • Mortgage rates will remain volatile but slightly lower by year-end, likely in the high 5% to low 6% range.
  • Inventory levels will remain low but improve slightly as more baby boomers age in place and homeowners stay “rate locked” in their current mortgages.
  • Home prices will continue to rise due to low inventory and strong demand.
  • Affordability will remain a significant challenge, especially for first-time buyers.
  • The Fed will cut rates three times, fewer than predicted earlier.
  • Fewer agents will remain in the business due to declining transactions and commission compression.
  • Homeowner’s insurance rates will rise due to the impact of natural disasters, making insurance harder to secure in some areas.
  • Unemployment will increase slightly but remain below 5%, leading to a softer labor market.
  • Inflation should stay manageable, in the range of 2.5–3%, supported by Fed actions and economic conditions.
  • Now more than ever, having a Realtor® represent you is critical to navigating the evolving real estate landscape.

As we step into 2025, it’s clear that the real estate market will continue to present its challenges, but with the right guidance, opportunities abound. Whether you’re looking to buy, sell, or simply understand how these changes affect you, I’m here to help. Together, we can navigate this ever-changing market with confidence.

Here’s to a prosperous and fulfilling 2025 — Happy New Year!

December 2024 Market Update

Leave a comment

And just like that, the holiday season is here! Another year is almost in the books — it’s amazing how quickly time flies. So, what’s happening now in the real estate market, and what might we expect in the months ahead? Let’s dive in.

Currently, the demand for housing remains strong. Even during Thanksgiving weekend, buyers were actively attending open houses and scheduling showings across the area. Interest rates have stabilized, and buyers seem to be adapting, even as prices remain at record highs. Why are prices climbing despite higher interest rates? It all comes down to inventory — or the lack of it. While lower inventory is typical during this time of year, we’re seeing even fewer homes available than in many recent years, excluding last year. This scarcity is putting upward pressure on prices.

Looking ahead, the real estate market will largely be shaped by interest rates and potential shifts in policy as we approach 2025. If rates decrease, demand could increase, driving prices higher and creating a more competitive market. Conversely, higher rates could lead to reduced demand, longer listing times, and potentially stable or lower prices. Adding to the mix, a new administration on the horizon brings the possibility of impactful policy changes. Historically, new leadership has often introduced initiatives to stimulate the housing market, such as programs to boost inventory, encourage homeownership, or make financing more accessible. While specifics remain uncertain, both interest rates and policy shifts will play key roles in shaping a potentially exciting and favorable environment for buyers and sellers alike.

On another note, you might wonder if now is a good time to sell your home. The answer depends on your situation. If you need to move soon, now is a great time. Buyer demand is high, and those looking during the holidays are typically serious buyers, not just browsers. Additionally, homes often look their best when decorated for the season, which can help make a strong impression. However, if you simply want to sell, waiting until after the holidays could be beneficial, as the buyer pool isn’t likely to disappear unless rates climb significantly. Either way, I’m happy to discuss your options and help you decide the best path forward.

As we wrap up the year, I wish you and your loved ones a joyful holiday season filled with warmth, laughter, and cherished memories. Happy Holidays! 

November 2024 Market Update

Leave a comment

With so much conflicting information about today’s real estate market, I’d like to share my perspective to clarify where we truly stand. Many buyers are holding off until after the election to make a move, but this may not be in their best interest. Historically, home prices tend to rise by around 5% in the year following an election, while interest rates often decrease, inviting more buyers into the market. This increased demand can drive up competition, especially with the limited inventory available. Waiting could ultimately mean higher prices and more competition. The savvy buyer would benefit from acting now rather than later.

Contrary to some beliefs, a significant drop in home prices is unlikely. For prices to decline, we’d need a large influx of inventory—something we’re not seeing. Homeowners are staying put longer, often tied to favorable interest rates, and most are only selling for significant life changes. Additionally, distressed properties, which historically have lower prices, are nearly absent. With 40% of homeowners owning their homes outright and 50% of mortgage holders having over 50% equity, the market remains stable. Since 1942, prices have only declined in six years, five of which were during the Great Recession. Outside of that, price drops have been rare and minimal.

For sellers, while the market may have slowed compared to the recent frenetic years, it remains active. The average days on the market have increased slightly—by only two days over last year. Meanwhile, sales increased by 14% compared to the same period last year, reflecting a steady buyer interest. Although rates have edged up recently, experts anticipate they’ll settle in the 6% to 6.5% range by early next year, potentially dipping into the high 5s by the end of the year.

As we approach the holiday season, remember that this time of year brings unique opportunities for buyers and sellers alike. Many choose to wait until the new year to make a move, but those who take action now may benefit from less competition and more favorable conditions. Whether you’re looking to buy or sell, having accurate, up-to-date information is essential. Please reach out if you or someone you know is considering a move – we’d be glad to help you navigate today’s market with confidence.

Wishing you and yours a very Happy Thanksgiving!

September 2024 Market Update

Leave a comment

As we step into the beginning of fall with cooler temperatures and apple-picking season in full swing, the Northern Virginia real estate market is also experiencing some noticeable changes. While mortgage rates have dipped by nearly 1% since June, this hasn’t yet brought a rush of eager buyers back into the market as we initially expected.

Instead, we’re noticing a trend: homes are staying on the market longer than they used to, and the flurry of multiple offers is becoming a thing of the past. Homes that once sparked bidding wars are now sitting on the market a bit longer, prompting sellers to reconsider their pricing strategies and expectations. To set the right price, it’s important to closely watch local trends — such as the number of competing properties, recent foot traffic, and how long homes are staying on the market.

One reason for the slower pace is the uncertainty around the upcoming election. As we enter an election year, many potential buyers are taking a “wait-and-see” approach. Economic policies proposed by key political figures, such as Vice President Kamala Harris’s suggested $25,000 credit for homebuyers, add another layer of complexity to the decision-making process. Additionally, there is some confusion around buyer agent compensation due to a recent commission lawsuit. Many buyers mistakenly think they need to cover down payments, closing costs, and their agent’s fees, which is rarely the case.

There’s also a belief that mortgage rates might drop further in the months ahead. If rates do continue on a downward trend, it might act as a double-edged sword. While lower rates could spur demand, they could also cause potential buyers to hesitate, hoping for even better rates. Waiting too long to buy, however, could mean facing higher prices if demand increases against our current low inventory.

For sellers, this evolving market means adjusting your strategy is key. With multiple contracts becoming less common, proper pricing, timing, staging, and marketing are essential to making your home stand out. Overpricing in this market can result in a longer time on the market and missed opportunities. If you’re thinking about selling, call me to learn how we’re helping our clients our sellers maximize their pricing and time on the market.   

While the market is showing signs of a slight slowdown, there are still opportunities for strategic sellers who stay informed and adaptable. The coming months will reveal more as we see how the election, the economy, employment trends, mortgage rates, and consumer confidence shape our real estate landscape.

Stay tuned for more updates, and enjoy the beginning of this beautiful fall season!

August 2024 Market Update

Leave a comment

As we enter August, the real estate market isn’t as hot as the weather we’ve been experiencing this year. Despite this, it remains a strong seller’s market, though the intensity has cooled slightly compared to earlier in the year. You may recall from previous newsletters that we saw sight-unseen offers significantly above the list price and multiple offers waiving all contingencies. While sight-unseen offers have become less common, we still see multiple offers, though it may now be only two or three rather than five to ten. Additionally, buyers are now able to negotiate contingencies, which I believe is a positive development.

With kids heading back to school soon, families might consider moves aligning with school district boundaries. This time of year often prompts discussions about relocating to be closer to schools or settling into a new area before the academic year kicks off. Whether you’re contemplating a move or thinking about selling, this seasonal transition can influence housing decisions for many families.

Looking ahead, there are several factors that might influence the market this August. First, Joe Biden’s withdrawal from the presidential race and Kamala Harris, now the Democratic nominee to run against Donald Trump could affect buyers’ decisions. We’ll have to watch how this impacts sales trends compared to previous years. Despite inflation dropping to 3%, Federal Reserve Chair Jerome Powell has opted not to lower the Fed rate, which could have future implications. There is speculation about a potential rate cut in September, followed by additional cuts in November and December. While this seems aggressive, we will see how it unfolds. Mortgage rates did decrease steadily in July, now standing in the high 6% range, but this didn’t result in a surge of sales, which was unexpected. It might be attributed to the seasonal slowdown we typically see in the summer months, especially now that we are past the pandemic period.

I will provide updates on August’s sales next month, so stay tuned for more information. Additionally, mid-August brings changes in how buyer agent compensation is advertised, which could impact sales, buyer representation, and seller decisions regarding compensating buyer agents. These are indeed interesting times, and I will keep you informed about these developments.

As always, I am here as a resource for you, whether you are considering selling or buying. Feel free to reach out to discuss your situation in more detail. Additionally, if you purchased a home in the last year, now might be a good time to refinance your loan! Contact me to discuss your interest rate options. Stay cool!

June 2024 Market Update

Leave a comment

What do you think the real estate market will be like this summer? Will buyers be experiencing the summertime blues with a lack of inventory, interest rates in the 7% range, increasing prices, and strong demand from other buyers, keeping it a tight seller’s market? Will sellers do the right things to sell their homes by properly pricing their house, staging so it is ready for market, and be able to choose from multiple buyers, making it difficult for some people to become homeowners?

Will interest rates come down with the spread between 10-year yield and 30-year fixed interest rates coming closer together? If this happens, will more people put their homes on the market because they won’t have as much mortgage rate lock-in effect? Will inventory increase because the only thing people like about their house is their interest rate, and they are ready to move? Will buyers stay put if rates don’t come down because of affordability issues?

The most consistent theme in these questions is interest rates, right? Yes, but also inventory. These are the major factors that dictate the real estate market and, of course, pricing. If we see fewer houses on the market coupled with lower rates, we will see more buyers and higher prices. If we see higher rates, we will have fewer buyers and, hence, more inventory, so prices will moderate and, in some cases, may come down.

Nationally, we are seeing more houses for sale, but locally, we have only slightly more inventory than last year, which is way below the 5-year average for active homes for sale. Again, demand remains high in our area, insulating us from broader market trends and news headlines about the real estate market around the country. That’s why having a knowledgeable agent is crucial to understand local market conditions and trends. If you or someone you know is looking to buy or sell a home, I am here to help.

Please feel free to reach out to discuss my answers to the questions above. Enjoy the long days and warm temperatures!

May 2024 Market Update

Leave a comment

The Spring housing market is starting to warm up here in Northern Virginia. Inventory of homes for sale is finally on the rise, as are sales. This April marked the first time we have had more inventory of homes for sale than we did the same month last year. The last time this happened was when there were more houses for sale in 2015 than in 2014 in April.  That is 9 years of month-over-month declines in active houses for sale year over year – it’s pretty amazing to me. In 2014, we had 6,145 homes for sale in Northern Virginia and in 2015 we had 8,247. Since then, the inventory of houses for sale every week and every month dropped when comparing the previous year. We ended April with just 1,676 houses available to home buyers, and last year we ended April with 1,529.  

The good news is that with more inventory, we have more sales. Buyer demand is not being deterred by higher rates, at least not yet. We continue to see more than 50 people through houses on the first weekend they are for sale, and we have had as many as 75 people through open houses.  Multiple contracts continue to be the norm more than the exception. On another nerdy number note, during the previous three weeks, we had more than 700 contracts written in the previous 7 days. This was the first time this has happened since July of 2022.  If rates were lower, this number would be substantially higher as more buyers would be coming out of the woodwork to become homeowners.

I previously mentioned buyers are not deterred by higher rates.  Regarding this statement, everyone should be prepared for rates to stay in this range for the foreseeable future.  The economy is doing well, jobs are being created and inflation is now moving higher than expected so the Fed is not inclined to reduce their rates.  As such, mortgage rates are and will stay elevated.  If you recall, generally when the Fed raises the federal funds rate, it can put upward pressure on longer-term interest rates, including the yield on the 10-year Treasury bond, as investors anticipate higher borrowing costs and adjust their expectations for future inflation and economic growth accordingly.  Mortgage rates are tied to the 10-year treasury so with this information we should expect mortgage rates to stay higher than expected.  If you have any questions about this, feel free to reach out to me.

Have a great rest of your spring, and as always feel free to call me to discuss your situation in more detail if you are looking to sell or buy in this competitive market!

April 2024 Market Update

Leave a comment

The real estate market is ever-changing and always evolving.  That being said, the only constant is change.  In March, the landmark case involving real estate commissions had NAR offer a potential settlement to the Plaintiffs for $418,000,000 and two changes to our business.  These two proposed changes are: (1) agents must sign a buyer agreement before showing houses. The agreement outlines what the roles and responsibilities of each party are and how agents get paid, and (2), all MLSs can no longer display buyer compensation as a field in their displays of listings.

In Virginia, it has been the law for more than a decade to have buyer agreements signed after the first substantiative conversation about real estate. At the time of the proposed settlement, only 18 states required signed buyer agreements. This practice is a good thing in my opinion.

The second proposal has added a lot of misinformation provided by – you guessed it – the media. Headlines are deceiving and often just plain wrong. Real estate commissions are not going away. They may be paid differently depending on how the seller chooses to offer compensation, but real estate agents will be paid because, as we all know, no one works for free.

Another misnomer is that prices were driven up by our fees. Nothing could be further from the truth.  Market conditions drive up prices, not our compensation. When the Fed lowered its rate to zero because of the pandemic, this caused mortgage interest rates to drop to the 2.25-3.5% range for an extended period. This caused a feeding frenzy on any house that came on the market, and prices escalated dramatically.  This had nothing to do with our commission rates. Then, the Fed increased rates drastically because inflation was rising.  That resulted in the mortgage rate lock that we have discussed over the last two years. This lock, in conjunction with more people aging in place, has lowered inventory to historical lows. As we know, low supply and high demand result in higher prices. The market drives prices either up or down, not this settlement and more importantly, Realtor fees. 

Prices will not come down because of the settlement – the market has, and always will, dictate prices.

Commissions are now negotiable. Realtor fees have always been negotiable. With this settlement and the corresponding buyer agreements needed, many people believe that sellers will no longer offer buyer agent compensation.

Sellers pay the listing agent a fee and allow them to offer part of this compensation to a buyer agent.

Many sellers have said they were not aware of this and feel if they understood it, they wouldn’t have allowed their agent to pay someone to negotiate against them. Agents need to do a much better job of explaining paperwork, the process, and what to expect as they progress to settlement. This will result in a more professional and streamlined experience, in most cases. If the seller does not allow compensation to be offered to a buyer agent, the buyer will be responsible for paying their agent. This will be a fundamental switch and many more conversations need to take place between agents and their clients about the pros and cons of offering compensation and the impact to their bottom line. Time will tell if the seller makes concessions, lenders will change to allow buyers to pay when they are a VA, FHA, or USDA buyer, and many other changes…stay tuned.

As always, I am available to speak with you about any of these changes and how they affect you if you are a seller or a buyer. Don’t hesitate to reach out, as I’m never too busy for you!

March 2024 Market Update

Leave a comment

As we step into March, a time that seems to effortlessly slip by us, it’s a reminder of how fast time moves. With March comes the excitement of March Madness and the anticipation of the Final Four, alongside the gradually lengthening days that breathe renewed energy into our routines. The thrill of victory and the agony of defeat on the court mirrors the high-stakes nature of the real estate market here in Northern Virginia.

We find ourselves amidst a dynamic real estate landscape, where multiple offers on homes of all price ranges have become the norm. Within this competitive arena, some homebuyers revel in the triumph of securing their dream home, while others

grapple with the frustration of missing out. Sellers, in particular, emerge as the victors in this scenario, benefiting from limited inventory and a surplus of eager buyers.

Even with the backdrop of rising interest rates, buyer demand remains robust, painting a picture of a market in constant motion. At open houses and showings, we’ve seen a steady stream of visitors, further defining the present real estate climate. However, amidst this fervent activity, certain buyer profiles such as VA buyers, FHA borrowers, and first-time home buyers find themselves in the position of underdogs, while cash offers reign as indisputable favorites.

To bridge the gap and fulfill the dream of homeownership for all, additional housing inventory is the key. Your journey to finding your dream home doesn’t rely on luck but on a solid strategy backed by experience and insight, which I’m here to provide.

Shifting gears but staying in the spirit of competition, I invite you to participate in a free Final Four Bracket competition. Keep an eye out on my social media as it gets closer for details on how to play. Whether you base your picks on your favorite team, mascot, color, or basketball knowledge, the competition promises to be engaging and enjoyable.

Wishing you the best of luck in all your pursuits this month, whether it’s choosing your winning bracket or exploring real estate opportunities. Feel free to reach out with any questions or real estate needs at any time – I am never too busy for you or your referrals!

February Market Update

Leave a comment

The real estate market in Northern Virginia continues to be in a remarkable time. First, rates continue to be extremely volatile – the jobs report exceeded expectations and rates took their biggest one-day jump in over a year. These reports will, in all likelihood, be revised downward as they typically do, but rates won’t drop as much as they increased as a result of this news. Even with the higher rates, buyers are still coming out of the woodwork. We had several homes come on the market on a Thursday, we held open houses on Saturday and Sunday, and they brought in more than 100 visitors – and with agent showings exceeding 25. As a result, you can see that buyer demand is not wavering at all. 

Another anomaly we have is the number of homes for sale. Inventory throughout the rest of the country is on the rise, up nearly 9% over this timeframe last year, and we are down 21%.

 One of the reasons for our lower inventory levels is the pace of our sales is up from last year by 8%, supporting my previous comment about buyer demand. In addition to the rise in our sales rate, we also continue to see the lock-in effect of homeowners with low-interest rates staying in their current homes longer coupled with increasing prices. These two factors make it less affordable for people to make a move and therefore, we have lower inventory. 

Where do I see the market going forward? I believe we will continue to see low inventory levels as buyers continue to flood our market. This will result in higher prices, as we are already seeing multiple contract situations and escalating prices. We have also had sight unseen offers on our listings which shows how much interest and need buyers have in today’s market. I believe we will see more new home sales with less inventory of resale properties available to buyers. Typically, new home sales make up between 10 and 12% of the market and today it is over 30%. This trend will continue in my opinion.  We are already beginning to see builder’s prices go up and incentives go down with their increase in sales activity.

So – where does the market go from here? I believe interest rates will come down as the inflation rate continues to come down. The lower rates will bring more buyers into the market because more people can qualify for mortgages.

Therefore, any homes that come on the market will be sold quickly and this will result in prices continuing to increase.  

What should you do if you are considering selling or buying a home? Call me so we can determine your best course of action.

Happy Valentine’s Day!