The REAL Market Update
We are starting to see some significant shifts in behavior amongst the buying public as a result of the inventory shortage and especially low interest rates that I talk about most every week here. One which I mentioned earlier is becoming a stronger component of the market: Namely a significant surge in new construction purchases. Buyers are tired of bidding and getting beat out for resales and are willing to pay a new construction premium and delay in occupancy to insure that they will be able to close on a good home. Housing starts are up 22% and permits up 17%. So look for that trend to continue. If you are thinking about buying new construction be sure to reach out to me.
Regarding the market we can say anecdotally that over 50% of all listings are getting multiple contracts which creates challenges of course for buyers, but I do have some creative and winning strategies we’ve been employing to great effect. Inventory levels this week are at 2,738 homes which is down 36% from last year. Yet sales in the last week are up 22% of the same week last year and sales the last month are up 20%. You can anticipate how this formula shakes out. Very low inventory + Significant sales increase = Prices going up!
Yet people see the economic disruption that the pandemic is causing and wonder when this will impact the real estate market. There are currently only 14 foreclosures and 13 short sales on the market in the entire NOVA region so the pain isn’t here yet. It’s a bit like the rabbit moving through the snake and what happens between now and the end of the year will go a long way towards telling the tale. The firewall for this market is the low inventory numbers. We could have 5,000 distress sales come on the market now and they would be summarily gobbled up. Some good news in that arena is that FHA has extended the ban on foreclosures through the end of the year.
If it’s time to jump into the market as a buyer or seller, or if you are wondering about timing, reach out to me and we’ll see what makes sense!
It’s a good life.