October 2022 Market Update

As we enter the last quarter of the year and with Halloween quickly approaching, here’s my question: is the real estate market going to experience a trick or a treat? We are all hoping for a treat but as mortgage interest rates rise along with inflation, it seems like the economy might give us a trick. As a result, buyers are in for a treat if they are in the market to buy a home. There is less competition for houses today. This allows buyers to negotiate with sellers to get lower prices, closing cost credits, and most contingencies they desire as we enter a more balanced market. 

In the past, I’ve discussed that buyers should consider alternative financing options like Adjustable-Rate Mortgages and 2-1 Buydowns to temporarily get a more reasonable rate. This still stands. As my friend Jared James says, marry the house and date the rate.  When the economy settles in, or if we enter a full-blown recession, we should see rates come down. Buyers can then refinance to the lower rates, especially on 30-year fixed rates. 

Now as a seller, it’s going to be more of a trick going forward.  Be prepared to settle in when selling your house, as the days on market are increasing.  Additionally, the house will have to be in top condition, staged, and most importantly, priced right.  Prices have moderated, and in most cases, we are not seeing higher prices on properties.

If you plan to sell, now is not the time to get greedy on the price, but the timing is good as there is less competition in the market. There are still savvy buyers looking to purchase a home today, and the contracts will have contingencies in them. If you are a buyer, call me if you would like to know more about the financing options I discussed, and let me guide you through the home selling process we are encountering today if you are considering selling.

On another note, we are growing! I recently purchased RE/MAX Regency out of Haymarket and Warrenton.

We’re consolidating our Gainesville and Haymarket offices into one, located at Regency’s Haymarket location in the Dominion Valley Country Club shopping center.  Please let me know if you would like to check out our state-of-the-art offices – I’d love to show you!

September 2022 Market Update

Summer is coming to an end! The question is – is the real estate market coming to an end as well? If you read the headlines, watch the news, and talk with co-workers and family members (who are not real estate professionals), the answer is probably ‘yes’. Prices are going to crash, we are in a bubble, inventory is going to skyrocket, foreclosures are going to ramp up, and more false information floats around regularly. Luckily, you have the voice of reason – me – to tell you the real facts, especially about the Northern Virginia Market. 

First things first: prices will go down in some areas, but not all, and not drastically. Some sellers will be desperate and will sell their homes for less than market value, as their circumstances will dictate their motivation. This is the exception and not the norm. They’ll still make money on the sale, as prices have increased in the last few years, so they’ll not be in a negative equity position. Some sellers will receive multiple offers and prices will escalate – again, this is the exception and not the norm. This is ok, as we don’t need the market to continue to have prices escalate $25,000 – $150,000 over the list price. That was just not sustainable. 

Inventory is not going to skyrocket, and we won’t suddenly have an oversupply of houses on the market. Why? Many homeowners have 2.5-3.5% interest rates on their mortgages and their payments are affordable, so why would they just suddenly list? Because people say the market is going to crash? Not gonna happen. Inventory levels have dropped in the last six weeks in our market, and that trend will probably continue. People are selling today because they need to – not because the market is on fire. Houses will stay on the market for two to three months – not two to three hours, or even two to three days – and that is ok. We are in a balanced market. This will frustrate some sellers, but the market has changed, so settle in and know that these are the conditions today. 

In today’s balanced market, buyers will have time to look at houses more than once and for longer than just five minutes. Their contracts will have contingencies, and this, too, is ok. 

Lastly, we are not going to have a foreclosure explosion. People have equity and jobs. They will exist, but there will not be an onslaught of them.

Sellers – it is time to balance the expectations of your sale to mimic the new market. Have patience – your house will sell. Buyers – know you will have time and choices, which is a good thing, but also know that sellers will not drop prices by 10%. Be realistic and you will get a home that fits your lifestyle. Buy for the long term and don’t be concerned about price fluctuations – they are normal.

With all that being said, some parts of the country will see bigger price drops because their prices increased nearly 50% in just a few years. They will see more inventory coming on the market. Their markets are not as sustainable as ours. Remote work situations have reversed in many cases, making these “hot markets” not so hot. 

I can tell you more and show you charts and images that back all of this up, so feel free to reach out if you want to learn more. As always, I am here to help you (and those you know) with their real estate needs. Call me to discuss how all of this affects you or them!

Now, go watch some football!

August 2022 Market Update

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

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

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

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!

July 2021 Market Update

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!

Northern Virginia Real Estate, Housing Inventory and Snowmagedon 2016

Scott MacDonald video update about the local housing market statistics and the impact on buying and selling a home in Northern Virginia – even with Winter Storm Jonas and the possibility of Snowmageddon 2016!  click to play video

Scott Market Minute 2016JAN22

Now is a great time to buy and sell a house!

Contact Scott MacDonald 702-652-5777 Broker for RE/MAX Gateway for more information and a personal assessment of your housing goals.

Scott MacDonald

RE/MAX Gateway

NFL Super Bowl Challange and a “No Deflate-Gate” in the Northern Virginia Real Estate Market!

Watch Scott’s Market Minute!

Low interest rates, low resale housing market inventory and great loan options.  If you are considering buying or selling real estate – contact me for a free consultation 703-652-5777 or scottmacdonald@remax.net

Will You accept Scott MacDonald’s NFL Challange?

How To THRIVE IN 2-0-1-5

Happy New Year Gateway Agents,

Now that the holiday season has come and gone, it is time to get geared up for 2015 and make it your best year ever.  In order to achieve all you desire, you will have to make sacrifices, develop more willpower, practice more discipline, have more consistency and continue to grow personally and professionally.THRIVE IN 2015

The sacrifices you will have to make will come in various areas. 

One is time.  Time with family and friends will be limited.  As you will be busier than you have been before, are you ready to make this sacrifice and are they?

Another area is investing in yourself and your business.  Do you have the money and resources available to you and are you willing to allocate them appropriately this year to realize the success you are planning for in 2015.  Lastly, committing yourself to working more efficiently, effectively and focused is a huge sacrifice – are you ready to make the sacrifice for your success?

Developing willpower – the ability to say no to unproductive, time-wasting activities is huge.  You will have to say no to coffees, lunches, happy hours, and ball games with family and friends to keep you focused and on point.  Do you have what it takes to develop this necessary ingredient to high levels of achievement?  Get willpower do to the hard things and get successful.

Practicing and working on discipline is critical to getting the results you want for yourself.  Getting up earlier, staying at the office a little later, developing a morning routine that gets you on track the rest of the day, sticking with a structured schedule – daily – and pushing yourself outside your comfort zone are the pieces of the puzzle that will get you further, faster.  Be disciplined in your activities, work smarter not harder and achieve great things in 2015.

Accomplishing tasks, making things happen and doing them regularly, with consistency is a key ingredient to success.  The important thing to keep in mind here is to not let a few disappointments slow you down.  Consistently set a schedule – with top priorities the night before you leave the office, consistently call your database, consistently attend networking events, consistently grow your database, consistently review and adjust what your plan is according to how the market fluctuates.

Growing personally and professionally is another success factor.  Start an exercise program, eat healthier, drink less alcohol and sodas, stop smoking, and take time to think.  Grow professionally by attending trainings, get involved in mastermind groups, obtain a designation, get a mentor or coach and meet with an “expert” in the business to get their perspective on what is happening and what they are doing to be successful.

Here are a few more tips to consider – stay positive, stay focused, talk to yourself and stop listening to yourself, read more and watch less TV, stop complaining, hang around people more successful than you, volunteer your time, learn something new every day and take action.

Don’t just survive, it’s time to thrive in 2-0-1-5!  Get it?  Got it?  Good!

Now, go sell something

Scott MacDonald

RE/MAX Gateway