I’m having flashbacks to the mid 2000’s with bidding wars and contingencies being waived. With all respect to Flo Rida not even Shawty got as low low low as inventory levels are now! We are at a mere 2,408 homes on the market in all of the whole of the Northern Virginia market (inside the Beltway, Fairfax, Loudoun, Prince William and Fauquier counties). That represents a reduction year over year of 42%! Does that mean that with little to choose from buyers are waiting for more options? No it does not. Sales in June are up 17% over last year. 1,048 sales last week and 3,841 so far this month. You can see what those numbers imply from an absorption perspective. There is a .7 (point 7) months supply of homes for sale and a .8 months supply of rentals. Median days on the market is 7 and the mean 17. And prices? Prices are up 7.4% YTD. Whew.
It’s not unusual to be writing a contract with my buyers these days and find ourselves competing with many, many other offers. It spans all locations and price ranges right now with the caveat that condition is a driver in the level of competition. The nicer the home, the more people are writing and competing and doing some crazy things with the contract terms.
To that point, I have some creative strategies beyond just bombing the price and waiving all your contingencies and protections. I craft a different strategy for each purchaser, home and seller needs. The relationships I have built up with my fellow agents over the last 30 years, many of whom I have done successful transactions with, are regularly giving my clients a leg up. Give me a call and we’ll go over the strategies to put you in a position to get that house you really want.
Many of my clients and friends are asking me if any of the job losses are creating distress sales. As of now they are not at all. There are only 13 foreclosures and 19 shorts sales in the whole region. The reason for that is people who haven’t been able to make their payments have gone into forbearance, not foreclosure. In fact May foreclosures were the lowest in 20 years because of this fact. Borrowers could initially get a 6 month forbearance, and can now get a second 6 months. So it’s possible that in a year we could see more of these distress sales, though continued strong price growth might provide sufficient equity to sell and pay off the accrued payments. Right now the forbearances have leveled off at about 8.5% of mortgages.
Here’s the great news for homeowners in Northern Virginia, housing was at the epicenter of the previous recession, but now it appears that it will be the bulwark against it. Don’t impose what happened in the last recession on this market. To do so is totally wrong.
The bottom line? Fantastic time to sell, great though challenging time to purchase. Call me if you are planning to do either and we’ll work together as a team to get an exceptional result!
It’s a good life.
Chris
