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So what is an absorption rate??

When I’m looking at a market to see if it’s leaning toward buyers, sellers — or neither — I look to the absorption rate. This means how long would it take to deplete the inventory at the rate that homes have gone under contract in the last 30 days. (Huh?) Read the rest of this entry »

I have a plumber in my house fixing a leak that I “thought” I noticed about a week ago. But I let it go. “Naah. It’s not a leak – probably just creekings of a 40-year-old house,” I second thought-ed it. Now – wet floor, carpet and drywall one week later – I realized again – I shouldn’t have waited.

There are plenty of things we shouldn’t wait on. Home maintenance and repair is one of them. Another for real estate professionals is how you treat your business. Work toward the market that’s coming, not in the market you’re in.

We are in a very hot market – low inventory, rising prices, few days on market – sound familiar? The difference this time, though is that there’s no frothing in the market and the appraisers are doing a good job at keeping prices in line. We’re not seeing consistent 10-20% increases in the values.

But – as a professional – work toward the market that’s coming. We know real estate, just like the stock market, runs in cycles. We may be ending this last run-up cycle. For Northern Virginia, we’re still running strong – but that doesn’t mean, keep marketing and working like you’ve been working and marketing the last 10 years.

It’s time to keep your finger on the pulse of pricing even more than before. Watch the inventory closer. Start connecting with your database of relationships consistently and letting them know what’s happening to the market and to their home value.

Note cards, popping by to see folks, and calling them to check in must be a consistent, daily routine for any real estate agent who wants to weather the ups and downs of our industry.

Don’t wait! When you think you should call someone, drop by and see them or send a note – do it!

If you really want to know how a real estate market is going, look at the absorption rate. The absorption rate measures how long it takes to absorb the inventory of homes at the rate houses are going under contract. I.e., if there are 100 homes and 50 go pending in the last 30 days, then that reflects a 2-months supply (100/50=2).

Sellers marketsSlide1 are under 3 months; normal are between 4-5 and anything over 6 is considered a buyers market. The DC market is pretty much a seller market all around. I measure the DC and Northern Virginia counties surrounding DC.

For more graphics, click this link to the RealtyHacks.net Facebook page.

The latest headlines from the national media have caused a little confusion in the marketplace. Of course, the headline doesn’t tell the whole story (see this one for 2017ytdjanpendingsnvaexample: http://www.cnbc.com/2017/02/27/pending-home-sales-drop-to-lowest-in-a-year-down-in-january.html). And keep in mind…

NEVER MAKE A LOCAL DECISION BASED ON NATIONAL NEWS!

In the DC market, the pendings are NOT down. In fact, year to date in Northern Virginia – pending sales are up for the year +15.8%) , for January (+18.3%) and MTD for February (+14%), according to data from the local multiple listing service.
It’s a strong market in N. Virginia even though the inventory has shrunk since last year, sellers are finding multiple offers in some cases, and buyers have continued enjoying affordable interest rates.

 

Here’s my take on the 2016 Presidential Election. Nothing.

Neither candidate would have250433, has had, would have had or ever will have (just trying to get all the tenses in there) an effect on my business plan to help as many investors, purchasers and sellers with their real estate needs as a real estate professional.

Nevertheless- Read the rest of this entry »

You’re going to hear about an amazing surge in pending sales for May 2013 pretty soon, but be still. In the midst of a hot market, there’s always an explanation for why pending sales for pocket markets would escalate by 100+ percentage points. Taking a gander at the table below, you’ll see that several markets in the D.C. area surged ahead of May 2012 in the 100%-plus range.

The final numbers will differ a bit from the info below, but as of the 25th of May, the Alexandria zip code area of Fairfax County, for instance, was up a whopping 140%. In May 2012 there were 127 pending sales, this year for that same time period, buyers nabbed 305 contracts. The same type of surge occurred in Springfield (141%), Falls Church (120%), Fairfax (116%), etc.

While we’re excited about the surge, it’s tempered by looking at the headlines and economic events that were occurring last year at this time. Namely, the NY Times announced, “Jamie Dimon, the bank’s chief executive, announced in May that the bank had lost $2 billion in a bet on credit derivatives…” and subsequent reports put the loss at around $9 billion. (For more info, take a look at this wiki report: http://en.wikipedia.org/wiki/2012_JPMorgan_Chase_trading_loss). What followed last year was a 1,100 loss on the Dow from April 27 through June 1, 2012, an investigation and resignations of JPMorgan Chase executives.

As goes Wall Street, many times, so goes the real estate buyers’ confidence. This year – the stock market is in all-time record territory, job creation is eeking upward and jobs are really growing in Northern Virginia, resulting in confident buyers with good mortgages, competing for homes.

Meanwhile, other good local news includes: listings are up; prices are up; and days on market are down. Need more information? Call us at Weichert Realtors, McLean VA at (703) 821-8300 if you want to know how the latest news affects your real estate goals.

The data below is compiled from the local MLS, MRIS.com. 

Slide1 Slide2

While the Washington, D.C. market has tightened into a sellers market, you may find a good deal in your favorite vacation destination as investors have started moving to second-home buying. Meanwhile, average prices in the D.C. area keep moving up, up, up!

The National Association of Realtors 2013 Investment and Vacation Home Buyer Survey “shows vacation-home sales rose 10.1 percent to 553,000 from 502,000 in 2011.  Investment-home sales declined 2.1 percent to 1.21 million from 1.23 million in 2011, but those sales had been well under a million during the market downturn.  Owner-occupied purchases jumped 17.4 percent to 3.27 million last year from 2.79 million in 2011,” according to www.Realtor.org.

The survey revealed that “11 percent of vacation buyers and 16 percent of investment buyers purchased the property for a family member, friend or relative to use, often for a son or daughter to use while attending school.”

A good number of investors and vacation home buyers also used their cash to invest: “half of investment buyers paid cash in 2012, as did 46 percent of vacation-home buyers.  Forty-seven percent of investment homes purchased in 2012 were distressed homes, as were 35 percent of vacation homes.”

Cash is still a popular means of purchasing even in the higher-end market of Northern Virginia. Buyers in Fairfax County in February 2013 paid all cash 13% of the time in February 2013 according to MRIS.com (the regional multiple listing service for the DC region.)

The median price of a home in Fairfax County was $420,000 in February – up more than 15% year over year. For a complete report for February 2013 sales, click here.

Wouldn’t you know it – as soon as word get’s out that real estate is picking up, the investors move in. Daily Real Estate News Reports, “More investors are betting on housing’s recovery in the stock market. A U.S. housing recovery is bringing about high returns for investors in the stock market, and prompting more housing-related companies to jump in.” See more about it on Realtor.org.

The D.C. housing market has been a shining light in an otherwise tepid economic picture for the region. Home sales prices are set to finish up for 2012 over 2011 — which will be the fourth year in a row that the region has enjoyed value appreciation.

The chart below is for Northern Virginia home prices, which had a high average price of more than $525,000 for the summer and finished December out with more than $518,000. (The average home price includes all housing types – condo, townhouse and single-family).

The December price is only 8.1% below the highest December price on record, which was set in 2005. The tortoise-speed appreciation over the years is actually a very healthy road to recovery, rather than the sky-rocketing fashioned appreciation of the mid-2000s.

Most home sellers and 

Northern Virginia Average Prices 2012buyers have not even noticed the recovery and many buyers are surprised at the level of activity at open houses these days when they visit on a Sunday. (First opens are drawing dozens of visitors these days, instead of t

he usual trickle in open houses of the past).

 

Home sellers can be assured of good traffic and a strong sale if their home is priced appropriately. Buyers are continually blessed with excellent mortgage interest rates.

Give us a call if you need more information about your particular market. We can be reached at Weichert Realtors/McLean at (703) 821-8300.

Home buyers are out in force in Northern Virginia. So far this month, there’s been a 17.4% increase in the number of contracts written compared to the same period January 2012. Nearly 1,000 buyers have put homes under contract in the counties of Fairfax and Arlington, and cities of Alexandria, Fairfax and Falls Church (the close-in burbs of Washington, D.C., for out-of-town readers).

The D.C. market has continued it’s bullish temperament, since Congress came up with its agreement to avoid the fiscal cliff (at least for now).

Image

Pending sales are tracking ahead of January 2012 by 16% for Northern Virginia (Fairfax and Arlington Counties, cities of Alexandria, Fairfax, Falls Church.

Nevertheless, the absorption rate is at spring-like levels, tracking at a 1.64 months supply (meaning that if no more listings were to become active, the current supply of homes would all go under contract in about 7 weeks.)

Job growth in the region, increasing rental rates and low mortgage interest rates are all three creating a perfect storm for the region.

Need help navigating it all? Give us a call at (703) 821-8300 at Weichert Realtors in the McLean/Old Dominion office.

 

 

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