Market Update
Happy New Year! Welcome to 2021! We’re looking forward to an exciting year with lots of new challenges, adversity, change, but most importantly opportunity! The good thing to note is that out of these situations come positive outcomes for many if you keep the right mental attitude, stay adaptable, and take care of yourself and those around you. We do not know what lies ahead but keeping strong is as vital as ever.
I have been asked many, many times “What is going to happen with real estate in 2021”? It depends on whether you are a buyer, seller, renter, landlord, or investor. Inventory levels in Northern Virginia continue to decline. We ended the year with only 1,737 houses for sale in Arlington, Fairfax, Prince William, Loudoun, and Fauquier Counties and all the cities located within this area. As you can imagine, this number is extremely low, historically speaking. This makes purchasing a home extraordinarily difficult for buyers. The only way to have any success in this context is to have a broker like myself who can leverage long time working relationships with listing agents, have top notch local service providers (lenders, title companies, etc) and get creative in sourcing listings and home sellers. Listing agents are overwhelmed with offers and calls and the best way to stand out is not merely numbers or lack of contingencies.
On the flip side, this makes it a great time to sell a home if you are looking to move. Depending on the price point, location and condition, sellers can expect multiple showings as well as multiple contracts with purchasers paying more than the sales price and waiving many, if not all, the contingencies associated with a sale. That doesn’t mean that some prep work and pre-marketing can’t increase your net even more! As you can imagine coordinating a sale and purchase at the same time during this imbalanced market creates a lot of potential complications and the solution to that is something I can help you with. The path forward on that varies greatly depending on your situation so let’s talk about that if you considering a move up or move down.
Renting houses is also a challenge as there is a .4-month supply of homes available, and of those, 40% are single-family or townhouses. Again, this makes being a landlord easier to get results as there is a brisk rental market in Northern Virginia. Most investors like houses that provide cash flow, and with prices being bid up, many investors are choosing to wait on the sidelines to see if more inventory comes on the market prior to getting into bidding wars. Time will tell if we get more inventory or not, but I believe we will experience low inventory throughout 2021.
COVID has spoken loudly in this market in the form of emerging data and the place where that has manifested itself most profoundly in a negative sense in our area is condos. In Arlington County, 84% of the resale inventory is condominiums. The average days on the market for a condo in Arlington is 76 days and the average overall days on the market for all properties in NOVA is 16. Quite a difference, right? I blogged on this extensively in December so be sure to check it out. Bottom line be careful when considering an investment in condos right now.
As always, I am happy to speak with you about your situation as each one is different. Happy New Year, and as always, be safe, make wise decisions and remember…
It’s a good life.
Chris
World’s Largest Study on New Year’s Resolutions Reveals 1 Tip for Thriving in 2021
By Ali Patillo – inverse.com
NEW YEAR’S RESOLUTIONS are lodged in our collective psyche as a step toward a better year. Annually, our tired habits and routines come into focus, and so do our annual vows. Meditate every morning. Hit the gym. Quit smoking. Stop bickering with your partner.
By February, nearly half of people’s resolutions go out the window. Only 19%of people keep their resolutions at least two years after making them.
New research reveals how to avoid the typical drop-off and design a New Year’s resolution that actually sticks. According to the largest study on New Year’s resolutions to date, people who create resolutions that add behaviors rather than erase them are more likely to maintain them for a year. It’s a slight shift that tweaks how you phrase the resolution in the first place — changing “I will quit or avoid” to “I will start to”. The seemingly simple twist can lead to meaningful outcomes, help people achieve their goals, and make behavior changes that last. It may not be possible to transform your life overnight, but the study suggests habitual, additive commitments to your goals can result in big outcomes.
WHAT’S NEW — New Year’s resolutions are wildly popular. Forty-four percent of Americans report being likely or very likely to make a New Year’s resolution for the coming year. But despite their prevalence, scientists don’t know much about how well they work, or how to make the process better.
THE INVERSE ANALYSIS — This study jibes with other psychology research which suggests it’s much easier for people to start stuff, than quit it. The minute you place a limitation on a particular action — drinking beer or watching Netflix — the brain can fixate on that “forbidden fruit.” By sheer will power, it’s extremely difficult to suppress cravings. Instead, give your brain another tempting alternative and bake cues during the day. If you’re trying to stop sweets, stock the fridge with extra fruit. If you want to be less sedentary, try out a new workout class and set reminders on your phone. As the rollercoaster of 2020 comes to a close, build in some reflection time to not only think about what you want to change, but what you are grateful for. Then, intentionally frame resolutions in a way that sets you up for sustainable success. Your future self will thank you.
Recipe Corner
One – Pan Winter Chicken Roast
By Robin Broadfoot – Tasty.com
Yields 4 servings I Total time 1 hour
INGREDIENTS:
- 1 large sweet potato, cubed
- 1 lb brussels sprouts, halved
- 2 apples, sliced
- 4 skins on chicken thigh
- 4 tablespoons olive oil
- salt, to taste
- pepper, to taste
- 3 cloves garlic, minced
- 1 tablespoon fresh rosemary
- 2 tablespoons fresh thyme
DIRECTIONS:
- Preheat the oven to 400˚F (200˚C).
- On a baking sheet, toss the sweet potato, Brussels sprouts, and sliced apples so they’re evenly distributed.
- Lay the chicken thighs on top.
- Drizzle the olive oil over the chicken, fruit, and veggies, and season with salt and pepper.
- Sprinkle with the garlic, rosemary, and thyme.
- Turn the chicken over and season on the other side, then return to skin-side up.
- Bake for 30 minutes, then broil for 5 – 10 minutes so the chicken skin gets golden brown and crispy.
- Enjoy!
2021 Economic and Housing Market Outlook: A Look into the Cloudy Crystal Ball
By Dr. Lisa Sturtevant – virginiarealtors.org
Most of us are ready to put 2020 behind us and to look ahead to 2021. While the crystal ball is cloudy, there are some glimmers of hope that offer optimism for the year to come. Economic conditions in Virginia will continue to improve, and housing market fundamentals will remain strong. The biggest risks relate to the ability to bring COVID-19 under control so that the economy—and life—can return to more normalcy.
A Look Back at 2020
This past year has brought unprecedented economic losses but also a resilient and surging housing market here in Virginia. When the news of COVID-19 first hit, no one knew how the public health crisis would impact the economy or how long we would be coping with its effects.
REALTORS® in Virginia have been remarkably innovative in using technology tools and social distancing measures to comply with public health guidelines while also keeping the real estate industry moving. Virginia REALTORS® partnered with state leaders to help keep real estate open as an essential business during the pandemic, and the real estate industry has been a bright spot in the state’s economy.
The number of total home sales in 2020 will top 2019 sales, despite the economic recession and spring market slowdown. There are projected to be a total of 132,370 home sales statewide in 2020, up 4.8% compared to 2019 sales. Home prices, which have been rising at double-digit rates in recent months, will end 2020 at a record high. It is expected that the 2020 median home sales price in Virginia will be $318,900, up 8.1% from 2019.
A Look Ahead to 2021
Forecasting economic conditions is tricky under the best of circumstances. In these extraordinary times, it is even more difficult to paint a conclusive picture of what to expect in the year to come. A rise in COVID-19 cases, uncertainties in the political process, and a stalling national economy offer reasons to be cautious when forecasting the performance of the economy and housing market in the year to come. Other factors, however, including demographic factors and persistently low mortgage rates point to a strong 2021 for housing market activity.
Housing Market Indicators
Home Sales
While demand for homeownership will continue to be strong in Virginia in 2021, a lack of inventory will be a major constraint on the market. There are no indications that inventory is going to increase in any significant way over the next year. Some would-be home-buyers, discouraged at a limited number of options, may decide to put off their home search. Escalating home prices create growing challenges for some homebuyers, particularly first-time buyers, to get into the market. The home sales forecast suggests that in 2021 there will be a total of 135,018 sales in Virginia, which is up just 2.0% from the 2020 total.
Home Prices
A lack of supply, growing demand, and low mortgage rates have pushed prices up in Virginia. It is expected that those factors will continue to put upward pressure on home prices in 2021. Increased demand in smaller markets, where there is potential for greater price growth, ultimately will lead to a very strong increase in the median statewide home sales price in 2021. These forecasts indicate that the 2021 median home sales price statewide in Virginia will be $349,196, an increase of 9.5% over 2020.
New Housing Permits
Permits for new housing construction began to increase during the second half of 2020, in response to rising demand for single-family homes. While the costs of lumber, a lack of labor, and regulations remain constraints on the new residential construction business, it is likely that the upward trend in new home construction will continue into 2021. Our forecasts indicate that in Virginia, there will be a total of 37,817 permits issued for the construction of new housing units in 2021, which reflects an 8.9% rise over the 2020 total.
Mortgage Rates
The rate on a 30-year fixed-rate mortgage hit historic lows more than 13 times over the summer and fall of 2020. Even as the economy improves in 2021, there are no signs that mortgage rates will move higher in the months to come. The Federal Reserve has given every indication that rates will be held low into next year and beyond. The change in Presidential administration should have no impact on the general trajectory of rates in the new year.
Our forecasts are for the 30-year fixed-rate mortgage rate to end 2021 at 3.2%, which would be 0.3 percentage points higher than the 2020 year-end rate.
While the future may not be crystal clear, the outlook for the economy and housing market in 2021 tends to be positive. Pent-up demand for homeownership and the desirability of Virginia communities, along with the resourcefulness of Virginia REALTORS®, will keep the real estate industry an important part of the state’s economic recovery in the year to come.
