Scott MacDonald

October 2025 Market Update

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What’s Really Happening with Interest Rates and Housing

The Federal Reserve recently lowered interest rates by a quarter of a point. While this was big news in the financial world, it’s important to understand what it really means for the housing market. A common misconception is that when the Fed reduces rates, mortgage rates will automatically come down. In reality, that isn’t always the case.

Here’s why: mortgage lenders usually anticipate the Fed’s moves and adjust their rates ahead of time. That’s exactly what happened this time. Mortgage rates had already dipped before the Fed made its announcement. Then, when inflation numbers came in higher than expected, it rattled the economy, and mortgage rates actually rose again. In recent weeks, we’ve seen rates fluctuate – rising, falling, and then rising again – making it feel like a rollercoaster ride for anyone watching closely.

This uncertainty has created a very dynamic housing market. On the one hand, some homes are still receiving multiple offers, but these situations are happening less frequently. On the other hand, more homes are sitting on the market longer, and we’re even seeing buyers successfully negotiate contingencies into their contracts again – something that wasn’t very common during the ultra-competitive years of 2020–2022.

The pace of sales is another concern. August sales were the lowest we’ve seen in three decades. If the slowdown continues, total home sales for the year could fall back to levels not seen since the 1990s. That’s a significant shift and something we’ll be watching closely.

If you’re considering selling, it’s essential to understand what today’s buyers expect. Homes need to be priced competitively, as overpricing will only cause them to sit on the market. Presentation is equally important – buyers want to see properties that are fresh, clean, and move-in ready. Staging can also make a big difference by highlighting a home’s best features and creating a strong first impression. Finally, accessibility matters; the easier it is for buyers to view your home, the better your chances of receiving an offer.

For buyers, the current market offers some unique opportunities. With homes staying on the market longer, there’s more room to negotiate terms, include contingencies, and take a little extra time to make thoughtful decisions, something we haven’t seen much of in the fast-paced markets of the past few years.

Adding to the uncertainty, the federal government shutdown began on October 1st. Right now, no one knows how long it will last. A short shutdown may not have a significant impact, but if it drags on, it could slow down certain aspects of the real estate process – such as mortgage underwriting, flood insurance, and even some verifications tied to government agencies. This could create delays for both buyers and sellers.

The real estate market is adjusting, and while we haven’t quite found our new “normal,” one thing remains true: preparation and strategy matter. Whether you’re buying or selling, the best advantage you can have is knowledge and guidance.

If you’re considering making a move, let’s talk. I’d be happy to walk you through what’s happening right now, explain how it impacts your situation, and outline the steps you can take to achieve your goals. Give me a call, I’m here to help you navigate this market with confidence.

September 2025 Market Update

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From Frenzy to Balance: What Today’s Market Means for You

As summer comes to a close, we’re beginning to see the real estate market shift out of the unpredictable patterns we’ve experienced these past few months. The market in Northern Virginia has felt like a roller coaster ride – sales climbing one week, dipping the next, and interest rates moving up and down just as quickly. That kind of volatility has left many buyers and sellers wondering what’s really going on.

The encouraging news is that we’re starting to move toward a more stable and balanced market. For a long time, especially during the pandemic, it was a strong seller’s market. Homes were selling in a matter of days, often with multiple offers well over asking price, and buyers had little room to negotiate. That environment made it challenging for buyers and created very high expectations for sellers.

Now, things are changing. While certain homes in sought-after neighborhoods may still attract multiple offers, most properties are staying on the market a little longer. This means buyers have more breathing room—they can take time to view homes, compare options, and even negotiate important protections (called contingencies) into their contracts. For sellers, it’s important to adjust expectations: instead of expecting instant offers, the new “normal” may be a few weeks on the market before the right buyer comes along.

This shift is part of a natural cycle. Real estate always ebbs and flows, and right now we’re moving away from the frantic pace of the past several years into something more balanced. That’s not bad news, it’s healthy. A balanced market gives both buyers and sellers a fair shot.

Looking ahead, interest rates remain a key factor. The Federal Reserve is expected to make another adjustment in September. Many are hopeful this could ease mortgage rates, making buying more affordable. However, it’s worth remembering that the last time the Fed moved rates in November, mortgage rates actually increased. In other words, there’s still uncertainty. We’re in a transition period, and patience is essential until the market settles into a new rhythm.

If you’re a buyer, now may be an opportunity. With more homes staying on the market and less competition, you may be able to negotiate better terms than in years past. If you’re a seller, pricing your home correctly and presenting it well is more important than ever—homes that are priced right and show well are still selling quickly. No matter where you are in your real estate journey – buying, selling, or just trying to make sense of the headlines, I’m here to walk you through it and help you make the best decisions for your situation here in Northern Virginia.

August 2025 Market Update

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Is the Northern Virginia real estate market frozen? The Northern Virginia real estate market continues to move through one of the most peculiar periods in recent memory – one defined by contradiction, hesitation, and uncertainty. Why, you may ask? There are several factors at play: the economy, federal government layoffs impacting the entire region, higher-than-expected interest rates for an extended period, and buyer apathy. While summer typically brings more energy to the housing market, in recent years, this year feels… stuck.

Inventory remains flat. The number of homes coming to the market isn’t increasing in any meaningful way, and houses are staying on the market longer. We’re hovering at very low inventory levels, and yet homes aren’t selling as quickly as you might expect with a limited supply. Why? Because sales volume is stagnant, leaving both buyers and sellers confused about their next steps.

Uncertainty appears to be the new normal. Let’s break down the reasons discussed above further.

A major driver of this slowdown is the current economic climate. Consumers are wary. Whether it’s concerns about inflation, job market fluctuations, or the broader macroeconomic outlook, many potential buyers are sitting on the sidelines, waiting for some clarity. Unfortunately, the only thing that seems consistent lately is unpredictability.

Interest rates are the elephant in the room. Higher-than-expected interest rates continue to weigh heavily on both buyers and sellers. For buyers, mortgage payments are significantly more expensive than they were just 18 months ago. For sellers, the idea of trading in a 3% mortgage for something north of 7% is a hard pill to swallow. As a result, homeowners are opting to “wait it out,” which is further contributing to the inventory standstill.

All this being said, we are experiencing a tale of two markets, which is perhaps the most baffling aspect of this market: its inconsistency. Why? On the one hand, we’re seeing well-located, properly priced, turnkey homes receive multiple offers—sometimes six or seven—within days of hitting the market. These homes continue to generate excitement and competition. On the other hand, we’re seeing some listings sit for weeks, sometimes going days without a single showing, or they are receiving lowball offers that don’t reflect the home’s value.

What’s the difference? Often, it’s the small things: pricing strategy, presentation, marketing, or the home’s location. Buyers today are more discerning, cautious, and highly sensitive to perceived value. They are willing to pay a premium, but only when they see clear justification for doing so.

What does this mean for buyers and sellers? If you’re a buyer, be aware that opportunities still exist, but patience is crucial. Be prepared to act quickly on the right home, but also understand that not every property will be a bidding war. In some cases, you may be able to negotiate. 

If you’re a seller, strategy is everything right now. This is not the market to “test the waters” with aspirational pricing. Homes that are priced correctly and show well will sell – often quickly. Those that miss the mark risk being ignored entirely.

Looking ahead, until there’s more certainty around interest rates or economic stability, we expect the market to remain uneven and choppy. Real estate is hyper-local, and even within Northern Virginia, we’re seeing pockets of high demand alongside areas that are lagging behind.

Now more than ever, experience and strategy matter. If you’re considering buying or selling, let’s discuss how to navigate this unpredictable market with confidence and clarity.

July 2025 Market Update

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What’s Really Happening in Real Estate?

We’re officially in the dog days of summer, and while it may feel like things are heating up, the real estate market (and the headlines surrounding it) can be a little confusing right now.

There’s been an ongoing tug-of-war at the national level between Federal Reserve Chairman Jerome Powell and President Donald Trump over interest rate policy. Many experts expected multiple rate cuts this year, but so far, we haven’t seen any. The Fed has held steady in recent meetings and has hinted that the earliest possible rate drop could come in September, if at all.

Why the hesitation? Powell is focused on inflation, closely monitoring economic indicators such as the Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE). While inflation has ticked up slightly, it remains near the range the Fed originally targeted. Still, concerns about potential increases — especially due to tariffs and global market shifts — have kept the Fed cautious. This ongoing debate has even drawn in other political voices, making the topic a hot one this summer.

On the bright side, mortgage rates have been inching down slowly, which is great news for buyers. That said, inventory remains tight, especially here in Northern Virginia. Over the past two weeks, the region has only added about 98 new listings. That’s far from a surge. While condos are sitting a little longer on the market, well-priced single-family homes in good condition and desirable locations are still attracting multiple offers.

Yes, days on market have increased slightly — which is normal for this time of year — but demand is still very much present. Sellers should remain patient, and buyers should be prepared to act quickly if they find the right home. Don’t let media headlines mislead you — real estate isn’t just local; it’s hyper-local. Certain zip codes and price points are moving at different paces.

Navigating this market can be challenging without a knowledgeable guide. Whether you’re thinking about buying or selling, the best strategy is to work with a trusted real estate advisor who understands the local trends and nuances.

If you have questions about what this market means for your goals — or if you’re wondering if now is the right time to make a move — I’m here to help.

March 2025 Market Update

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The Northern Virginia Real Estate Market: Strong and Steady This Spring

There’s been a lot of chatter about the Northern Virginia real estate market, but much of it is more noise than reality. Despite what you may hear, our market remains strong, and opportunities are plentiful for both buyers and sellers.

Low Inventory & Seasonal Trends
We continue to experience very low inventory, meaning there are fewer homes available for sale than usual. While we are seeing a slight increase in inventory, this is a normal seasonal trend. Every year, as we move past Valentine’s Day, more homes traditionally come on the market. It’s not a sign of trouble—it’s simply the natural rhythm of real estate.

The slight uptick in inventory is expected and typical for this time of year. Sellers often take advantage of the spring season to list their homes, leading to more choices for buyers. However, demand remains strong, keeping the market competitive. Properly priced and well-presented homes continue to attract attention and offers, often within days of hitting the market.

There’s been speculation that potential government layoffs might negatively impact the housing market. However, any real impact would likely be delayed. Typically, when people lose their jobs, they focus on finding new employment rather than making immediate changes to their housing situation. Most homeowners understand the challenges of selling their home without a clear plan, as renting or buying a new home without stable employment is not an easy feat. As a result, many will choose to stay put, keeping the housing supply tight.

We’re looking forward to a strong spring market. Open houses are bustling with activity, and we continue to see homes selling quickly when they are priced right and in good condition. The market remains price-sensitive, and while well-positioned homes are snapped up, those priced a bit too high may sit longer and require price adjustments. The strategy of pushing prices higher is not as effective in today’s environment.

Mortgage rates have been a bright spot, trending down for five consecutive weeks. This easing of rates could bring more buyers into the market, boosting demand even further. It’s a promising sign that the market is stabilizing and that now could be a great time to make a move.

Navigating the real estate market can be complex, but you don’t have to do it alone. If you have any questions about the market or are curious about your home’s current value, I’m here to help. Wishing you all the luck of the Irish and a fantastic spring season!

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

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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

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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! 

August 2024 Market Update

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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!

May 2024 Market Update

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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

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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!