The REAL Market Update
A little good news for those frustrated home buyers!
Sorry you buyers, it’s still a full blown sellers market, but there are some encouraging realities and improving data out there for you!
Inventory has ticked up for 6 weeks in a row now to 3,210 homes on the market in the Northern Virginia region. That is a really good sign for this time of the year when inventory levels typically tend to trend downward as we approach the holiday season. This is still down 22% from last year but better than earlier in the year when we were at times down over 35%.
Sales are up 27% over last year which is an incredible testimony to our regional market given the COVID disruptions and limited inventory levels. We are at .9 (point 9) months supply of homes now which is also a better number for buyers. For reference the rest of the country is at a 2.7 months supply. Prices are up 13.5% year over year, and a very healthy 8.7% Year To Date. Fortunately from an affordability standpoint as the prices have risen interest rates have on balance declined. The final market statistic for the broader market I’ll comment on is Median and Mean days on market which stand at 6 and 18 respectively.
Folks continue to ask me about distress sales coming down the pike, and I have commented on this extensively on this in previous blog posts but I’ve got some new data to add to the discussion today. Right now there are only 6 foreclosures and 7 short sales in the entire Northern Virginia region! The bottom line is that there will be some increases in distress sales in the coming months, but there will not be a deluge that shifts the market. Here’s some more data to support my conclusions: Currently 91% of Americans have at least a 10% equity position in their homes. 70% have at least a 20% equity position and less than 1% are underwater!
Now onto some things I am seeing anecdotally. Some sellers have been too ambitious in their pricing which is slowing down bidding on their homes, and in some instances requiring a price drop to get the sweet spot. Sometimes the right strategy is price and promote at the market price and get it bid up on price or contingency adjustments, rather than starting out at the bid up price. Call me and we’ll look and see which strategy would best fit your situation. We are also definitely seeing an increase in appraisal issues. All the more reason to try to elicit some protections from buyers on your contracts.
Let’s close with some projections on interest rates. There is an absence of underlying fundamental economic drivers (read inflation, etc) that would lead to pushing rates up. However the Fed keeps talking about reducing or suspending their purchases of Mortgage Backed Securities. If/when that occurs it will have an impact that I will alert you to.
That’s it for this week! Stay safe.
It’s a good life.