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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 example: 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.
As you see markets around the country drop inventory and increase pending sales, the question arises – is this for real? Has the market turned around?
In the shadow of Washington, D.C. – you betcha. While some observers may say it’s all about the home buyer tax credit and low interest rates – they haven’t been watching pocket markets around the country.
Northern Virginia is one of those markets that even if you doubled the inventory – it wouldn’t be enough in today’s market environment. Multiple offers (half dozen or more in many cases) are the norm; houses selling above asking price; prices moving up in zip code after zip code, month to month and year over year.
The absorption rate is dropping dramatically. (Absorption rates are measured by dividing the number of pending sales into the number of active inventory – any measurment under 3 months is considered a sellers market).
While not all markets around the country have turned around at the rate here in the D.C. area – the sellers’ market has already arrived!
During the run up last time, interest rates were in the 8 – 9 percent range – so buyers aren’t afraid of rates nearly double today if they think they are buying in an escalating market. Which is starting to happen in market after market.
For more research, see www.MRIS.com and www.Realtor.org.
Until next time…
This post is going to be very local in nature – Northern Virginia readers — we need houses to sell! The market has turned on a dime and sellers are now starting to get their asking price, (or 10s of thousands more — see Steve’s comment on last posting); entertain multiple offers and move up to their next house with very cheap loans.
Are you ready to sell? Who do you know that’s ready to sell? Please respond asap so we can catch this upsurge for you, get your home sold and move up to that next great home that you can buy with interest rates that even you grandparents haven’t seen! (Lingering today under 5%).
The whole Northern Virginia market is down to a 2.0 months’ supply — that’s deep in seller market territory. For price ranges under $500,000 it’s even less than 2 months!
Call me today, please! (703) 819-9800. I need the lead!
If you’ve been waiting for the Seller’s Market to return – wait no longer! In the first quarter of this year, several towns and counties in Northern Virginia have entered the Seller’s Market territory with less than a 3-month supply of homes available to home shoppers.
Buyers have been leaping off the sidelines for months to snatch up houses that have had a 5-year backup in pricing. For instance, this activity has reduced the standing inventory in Fairfax County down from a 6.54-month supply in March 2008 to a 2.94-month supply today. Here’s how the regional absorption rates look:
Northern Virginia: 3.14 months
Arlington County: 4.33 months
Loudoun County: 3.31 months
Alexandria City: 3.18 months
Fairfax County: 2.94 months
Prince William Co.: 2.03 months
Prices are starting to move up, however. Homes in the lower end are beginning to sell at or above the asking price. Meanwhile, average sales prices are selling at 96% of asking prices. As the market tightens, those price increases will start creeping up higher end homes as well.
So what? What does that mean to you? If you or anyone in your family is a first time buyer – get off the fence! The federal government is offering an $8,000 tax credit (with no pay back required!). Prices are still very affordable. And there is also $0 down payment financing available for first-time buyers as well – coupled with the $8,000 tax credit. The credit is available on homes settled by December 1, 2009.
If you’re a move-up buyer – now may be the time to make that move up before prices start escalating out of control. If you bought before 2003, you most likely have the equity necessary to make that move up while the time is right – prices are lower than in 6 years; interest rates are lingering in the 5% range (even in the 4%’s with points!); and there’s inventory still available.