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August 2022 Market Update

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It’s the dog days of summer, and the real estate market is generally as it is this time of year, but just a little bit slower. Typically, the market sees less activity in August – people go on vacation, the showings slow, and prices moderate. Nothing to be concerned about, but the difference this year is the market was so fast-paced the first five months that it seems like things are drastically slow now.

The good news is that we have settled into a more “normal” market. The initial shock of the changing market has worn off. Inventory levels have stabilized, prices are settling, and buyer demand remains active. The weekly absorption rate of sales this year is 19% which is good, relative to other non-pandemic years. For comparison, the rate in 2019 was 18%, in 2018 it was 15% and in 2017 it was a mere 12%. What we need now is for seller expectations to be in line with where the current market is. It will take longer for houses to sell; there are fewer buyers in the market due to rising rates, rising prices, and buyer fatigue. The great news is that there are still buyers in the market. There is no bubble and prices are not crashing.

Why you may ask? Today (versus the Great Recession), we have 5 million more buyers in the first-time home buyer age bracket (28-32) and there are 12 million more household formations. Additionally, the number of homes for sale was 3.7 million nationally in 2008. Today we have under 1 million. Builders only build when they have a buyer – they are not building spec homes like they were before the Great Recession. The overall numbers reflect a better market for both sellers and buyers. The frenetic pace from November through the end of April was not sustainable, nor was it healthy.

So, what’s next? We will have a market where buyers will have the ability to take their time when deciding to buy. When they do write contracts, they will have contingencies in them. There will still be some homes that sell quickly with multiple offers, but it won’t be like it was a few months ago. I want to reiterate that this is a good thing for everyone, as we have seen issues with people who bought homes sight unseen, didn’t do inspections, or have appraisal contingencies.

The bottom line is that if you are looking to sell or buy, you need the advice of a trusted professional. Call me to discuss your situation in more detail. I am here to help!

July 2022 Market Update

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Welcome to the summer – and all the fun associated with it! What does summer mean to you? Trips to the beach?  Lazy days at the pool? Cookouts with family and friends? Baseball games?  How about amusement parks? 

In our current world of real estate, we are at an amusement park and rollercoaster rides are what we are experiencing. We’re facing the ups and downs and twists and turns of the most exciting ride at the park.  Now, more than ever, you need to have an agent with experience and knowledge to help you navigate the roller coaster of real estate.  We’ve seen some houses sell with multiple offers in just a few days, and other houses sitting on the market with very few showings in weeks.  We have a high demand for housing and growing – albeit slowly – inventory levels.  Interest rates are up and down regularly, yet they are still at fantastic historical levels.

The rates of the past are the rates of the past. They were artificially low and could not stay that way for an extended period.  Even though current rates are higher than where they were, they WILL come down as we enter a recession.  The good news for real estate is that in recessionary times, real estate has fared well, with only the Great Recession negatively affecting home values.

The reason for that decline in home values was the exotic home loans and the fallout as a result of them.  We are not in the same situation today.

Homeowners have equity today versus the Great Recession, when many people had negative equity the day they bought the house.  As a matter of fact, of people in foreclosure today, 90% have positive equity and 25% of those in foreclosure have 50% positive equity or greater.

So, what does all this mean if you are a seller or a buyer in today’s market?  Sellers need to be realistic with their pricing and have patience, as it may take time for your house to sell.  The good news is that your home will sell as we DO have demand. Even though inflation and rates are up, buyers are out there.  If you are a buyer, you may need to be competitive or you may not be able to negotiate like “the old days”.  In any scenario you find yourself in, we should speak more specifically about your situation.  I am here to help, so give me a call.

Happy Summer and stay cool!

June 2022 Market Update

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Lately, we’ve been having conversations with each other, our clients, and others in the industry both locally and around the country to better understand what is happening today in the real world and the Northern Virginia real estate market. Lots of questions are being asked. Do we have a housing bubble in Northern Virginia? Are prices going to crash? When are prices coming down? Should I wait for prices to drop before I buy? Why is it taking longer to sell a house? How high will rates go? Should I sell (or buy) now or wait? 

In my opinion, prices will not be escalating at the rate they were previously. Those dramatic price increases were not sustainable. There may be pockets where prices decline, but we still have high demand at most price points.

Additionally, our price increases were not as drastic as in other parts of the country. According to the FHFA Top 100 Metropolitan Markets Ranking, we rank 99 out of 100! Other parts of the country will see higher price drops, but our area should remain stable. We will not have a “housing crash” in Northern Virginia. 

Don’t wait to buy real estate – buy real estate and wait. Buy because of your lifestyle, needs, and wants – and not strictly because of prices. Buy for the long term, not the short-term gains. Yes, the market has slowed down. Buyers are not “rushing” into buying decisions like they were previously, but remember – that type of market cannot be sustained. It is still a seller’s market. It’s a good thing when a house is on the market 7-10 days.  

If you are thinking of selling soon, give me a call. Rates are going up on 30-year fixed mortgages, but you do have alternatives – most notably, adjustable-rate mortgages and buydowns. The adjustable-rate mortgages are a great option and not what they were when the real estate market crashed in the past. Buydowns give you another option, with lower than 30-year fixed rates. Let’s discuss why these are often viable options for buyers. If you are looking to sell or buy – now is a great time, so call me to learn more.

Enjoy the last few days of Spring before the summer heat kicks in!

April 2022 Market Update

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How about this weather? Cold temps, blustery winds, snow, sleet, and sometimes sunshine and warm temperatures all on the same day. It’s so crazy; I can’t figure out what to wear today! These conditions remind me of the real estate market in Northern Virginia this last month. One house had 100 visitors and multiple contracts in two days; another had 15 visitors and one contract in four days – in the same neighborhood one week apart. We also have a house that has been on the market for more than two weeks with just a handful of showings and no ratified contract. As I always advise, you must have the house in pristine condition, priced right, and in a great location to get the most activity as well as contracts. If you think you can sell anything in this market, you are far from reality.

The real question of the month is, “when should I put my house on the market?” Interest rates have impacted the market as they continue to rise. We’ve had the most volatile few weeks of increases, with rates topping out at over 5%. This has some buyers looking to buy sooner rather than later (many believe rates will continue to rise), and they want to get in today. Another aspect to consider when I’m asked this question is the number of houses for sale – especially in your neighborhood. Overall, in Northern Virginia, inventory levels are down 29% from this same time last year – but inventory is rising. I also consider pricing when answering this question. Prices are up over 9% from last year, but with rising interest rates, inflation, and more homes for sale, price increases will not be as substantial as earlier this year. My answer is simple – get your house on the market sooner rather than later. Call me today if you are considering selling and want to see how this impacts you.

So how does all this impact buyers? If you are financially stable to buy a home, don’t wait – just go for it. Remember to buy for the right reasons – lifestyle, distance to work, and schools to name a few, just don’t forget what your why is. Don’t expect mortgage rates or home prices to come down because neither is going to happen for the foreseeable future. Waiting will cost you more. As the saying goes, ‘don’t wait to buy real estate; buy real estate and wait.’ If you are thinking about buying, call me, and we can discuss your situation in more detail.

In the meantime, have a great spring. Hopefully, the weather will begin to normalize soon!

March 2022 Market Update

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For me, the word of the month is ‘strategize’…and that’s because the real estate market is moving fast and furiously. If you don’t have a strategy, you will not be adequately positioned as a seller or a buyer. If you are a seller, do you fix up your house or just list it in its current condition? Do you price it low and hope for multiple offers? Do you price it at market and expect a few offers – or maybe just one? Or do you price it high and hope a frustrated buyer is willing to pay any price?

If you are a buyer – do you use an escalation clause? Do you waive all contingencies? Do you offer a free Post Settlement Occupancy Agreement? Do you want to add an appraisal gap statement? Do you take it “as is”? So many questions need to be addressed; each situation is different and should be analyzed individually. The good news is that I have the answers for you, whether you are looking to sell or buy in today’s market, who you work with matters!

As you know, not every house will sell just because of the market. You still need to have the right strategy to get it sold. On the flip side, a strong offer can position you to win over multiple other contracts with the right strategy, so call me to discuss your situation in more detail. I am always here to help.

I am getting many real estate-related questions lately – will the rising interest rates hurt the market? Will the market be impacted by the Feds increasing their rates overnight? Will the Ukraine situation slow down the real estate market? Will rising gas prices impact real estate? How does rising inflation affect the real estate market? So many good questions. Here are the answers – at least the ones I have today. Mortgage interest rates remain at historic lows, and as a matter of fact, they are below where they were before the pandemic started. Mortgage rates would have to get to the 6% range before they began to impact the market, and the government won’t let this happen. Presently, rates are at 3.75% for conforming loans – a reasonable rate, in my opinion. The Fed rate increases do not directly impact mortgage rates, so this will not be a considerable influence. Rising gas prices may hinder a few first-time buyers from entering the market (they are budget-conscious overall), but this will not slow down home buying demand. Inflation may hinder some people from buying, but in the end, it won’t affect our market. We are receiving multiple offers across all price points, so we will still have a robust real estate market even if half the buyers drop out. Lastly, if it gets worse, the situation in Ukraine may impact housing. At this time, it is helping to bring rates down, but it hasn’t slowed demand or slowed price appreciation. Only time will tell, but all is good on our real estate front right now.

There are many scenarios and questions out there but know that I am here to help answer them. Just give me a call to discuss everything with you!

Happy St. Patrick’s Day!

February 2022 Market Update

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Didn’t that feel like the fastest January ever? I blinked, and it is already February. It seems like we were just celebrating New Year’s Day yesterday. It must be the pace of the real estate market that makes time fly. This January’s housing market has been the hottest on record. Last month 45% of homes found a new homeowner within two weeks and 35% received a contract within one week. As demand remains strong, the question is – will we have enough inventory to keep up with this demand? Time will tell. If you have thoughts of selling or know someone who wants to sell, now is the time to act. Currently, we only have half a month’s supply of housing available. This means that if no new homes came on the market, everything would be sold in two weeks!

The National Association of Realtors says that a 6-month supply of homes is a balanced market. Do you know when the last time we had a 6-month supply of houses was in Northern Virginia? I have been keeping weekly records since March of 2005, and the most supply we have had per month is 4.3 – and that was in January of 2009. At that time, we had 10,129 houses for sale in Northern Virginia. Today we have only 1,069 resales available. Because inventory is so low, we see multiple contracts on virtually every listed home and have showings back-to-back all day long. I had more than 50 showings on the last home I sold. That means 49 buyers are still looking for a home in Haymarket in the $725,000 price range. If half of the buyers get buyer’s fatigue, there are still 25 people looking for a home.

Things didn’t even happen like this last year when the market was so frenetic. This market will take time to settle down. Since 1981, the average age range of a first-time buyer has been between 28 and 32; there are 23.5 Millennials in this age group today.

Even though the competition is stiff, we can still help if you are considering buying. We have developed strategies to help you “win” in multiple contract situations – just give me a call to learn more!

Happy Valentine’s Day!

August 2021 Market Update

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There is a lot of news swirling around about the real estate market today. You are probably hearing, reading, or seeing that the market has slowed, inventory has increased, buyers are taking a break, and prices will crash once forbearances end. Well, the question is – what is real news and what is not? In my opinion, we are back to a more “normal” market based upon seasonality, and the market is not going to crash – at least not in Northern Virginia. The months of July and August are typically slower times of the year for real estate, and this year is no different (other than more people are vacationing due to the pandemic and travel restrictions last year). So, this is having a slight impact on the market. Couple this with the frenetic pace of the spring market, and the media would have you think the real estate market is coming to an end. In my opinion, It is not, so you can sleep at night now.

Let’s address each issue:

  • The market has slowed. Yes, it has slowed down slightly in relation to the overheated market we discussed previously and the time of year. This being said, houses are still selling, and some have multiple offers on them. If you are selling, make sure you prepare your home in the proper condition and price it right. Now is not a time to overprice properties. Call me to discuss your situation in more detail.
  • Inventory has increased. Yes, it has. We were at near all-time lows for houses for sale in Northern Virginia, and previously, there were not enough homes for the buyer demand we were experiencing. Additionally, we are still well below what is known as a “typical” market for the number of houses for sale.
  • Buyers are taking a break. Houses are still selling, so they have not taken a break. Buyers are not competing as much in multiple contract situations, so the number of multiple offers has decreased. This does not mean the buyers are taking a break. Buyers are more discerning, and with increasing inventory, they can be. This is an excellent opportunity for buyers – more inventory and less competition. If you are considering buying, give me a call to discuss your situation in more detail.
  • Prices will crash once forbearances end. Prices will not crash… inventory is low, demand is high, mortgage rates are still fantastic, and just because an event like this occurs does not mean prices will crash. There will not be a flood of foreclosures like there were before. Too many reasons to list why, but feel free to call if you are interested in learning more.

There is lots of information out there about real estate. To make sure you are well informed, call on your trusted professional 😊 As summer comes to an end, I wish you all good luck sending kids back to school this year!

July 2021 Market Update

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It is hard to believe that half the year has come and gone. It certainly has been an interesting six months in the real estate business. We encountered a frenetic sales pace that saw prices escalate tens of thousands to hundreds of thousands above list price with no contingencies and multiple offer situations, with buyers doing all they could to “win” the negotiations. Then, almost overnight, we saw the market tap the brakes. It is still a great market – we just went from 110 miles per hour to 60. Today, houses are staying on the market longer – days, not hours like earlier this year, with fewer showings and only one or two contracts instead of multiple offers. In many cases, we have been able to negotiate prices and contingencies like finance, appraisal, and even home inspections.  

So, what is going to happen moving forward? Buyers who took a break after losing out on multiple homes may want to consider getting back into the market as there is less competition, rates are still great, and prices have leveled off. Sellers need to exercise patience, price their home properly and get the house in top condition to get it sold. Previously, anything that came on the market would sell in many cases regardless of the condition; this is not the market we are in today. Buyers are more discerning when looking at homes. The property’s condition, price, and location need to be top-notch, or they will sit on the market longer.

All this being said, every situation is different and needs to be analyzed on its own merits. Some properties are receiving multiple contracts, and prices are escalating; there are just fewer of them in our current market. If you are considering a move, please call me so we can come up with the right game plan for you.

I hope you are enjoying the summer!

June 2021 Market Update

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Here is the update on the crazy Northern Virginia real estate market…round and round and round it goes, where it stops, no one knows. The interesting thing is the market has shifted, and it happened quickly. Was it mortgage interest rates rising so high it stopped people from buying? No. Was it a flood of foreclosures and short sales hitting the market? No. Was it a pricing bubble that popped and collapsed home prices? No. Was it regular sales coming on the market giving buyers more choices? No.

So, what has caused the shift in the market?  First, the frenzied market we experienced from mid-January through early May could not be sustained. We were experiencing 50-70 showings in only one or two days and contract numbers in the high teens to low twenties on houses we put on the market.  Additionally, we saw prices escalate tens of thousands to hundreds of thousands above list price, with buyers waiving everything to “get” a home. It was a stressful time for everyone involved – buyers, sellers, and Realtors alike.

Now, we are seeing 5-15 showings in an entire weekend, and we are receiving between one and five offers. Still excellent numbers historically, but it is, in a different way, causing stress on sellers. The expectations of sellers are what they “heard,” “saw,” or “read” about the market two months ago or more – not recent facts. Well, the market shifts on a dime with no real rhyme or reason. The one thing I feel has put a damper on the market is “buyer fatigue.” Buyers had gone out, written contracts, and lost out on many houses. They wrote what they perceived to be the perfect contract and were beat out by someone who had to have the home and irrationally made an offer the seller couldn’t refuse. The conversations I am having now with buyers and agents are – oh, they have three offers? Someone will pay too much; I don’t want to waste my time. Therefore, we are now seeing fewer offers; still, great offers – above list price and waiving contingencies, but the number of contracts and showings are just down. So, if you are a seller or considering selling, your house will sell; just realize the market is different today, not bad, simply different. On the other hand, if you are a buyer, don’t give up; fewer people competing for homes mean you have a better shot at getting one now than a few short months ago. We can help you determine your best course of action, whether buying or selling, so call us to learn more!

Have a great summer!

Peak Performer Series – Weekly Motivation

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In this weekly motivational series, I’ll highlight how YOU can become a Peak Performer. In 2021, I have a NEW challenge for YOU! 

Are you looking to make a TRUE impact in people’s lives this year? Learn more about my latest challenge for YOU in my latest Peak Performer message and let me know if you are going to accept this challenge ⭐

​Need more motivation? Give me a call at 703-652-5777 or email at scottmacdonald@remax.net 

FOLLOW MY NEW FACEBOOK PAGE for more motivation, success tips, and inspiration: https://www.facebook.com/SuccessSecretsforRealEstate/