Spring has Sprung!
I can’t believe I’ve already had to mow my lawn twice. Just as my grass has been growing so has buyer activity in the market. Contracts last week are up 23% from last year which was really about the last week of the normal market before the COVID induced market shut downs.
The market numbers are not markedly different from the first part of the year but we are seeing some anecdotal indicators that lead us to believe that there might be a little inventory bump on the horizon. Anything in that realm would be welcome news indeed. Today we are at 1,667 homes on the market in the NOVA region. As a reminder that is inside the beltway, Fairfax, Loudoun, Prince William and Fauquier counties. That translates to a .5 months supply of homes in the for sale market. The rental market is similar at .7 months. The median days on the market (DOM) is 6 and the average DOM is 21. Those of you who have been on the hunt on the buy side may be surprised to hear that the average sales price relative to the original list price is only 100.4%. Several things account for that. Some people are still managing to over price their homes, and a huge part of the inventory is made up of close in condo’s, and that is where the soft portion of the market is.
I keep getting inquiries about distressed properties so I took a little deeper dive and found some things that are instructive and that align with my previous posts on the subject. Right now there are only 5 foreclosures and 4 short sales in the area! Yet that is just a snap shot of right now. What about down the road? At the current time the mortgage Forbearance and eviction moratoriums are scheduled to end at the end of June. But in looking at those who would be impacted by that I discovered that 9% of those in Forbearance have actually continued to make their payments. 83% are in their second phase of the moratorium. In fact, at this point only 1% of those who have exited Forbearance had no payment plan in place upon doing so. And remember over 80% of those in Forbearance have at least a 10% equity position and can thus just sell straight up and not end up in a distressed sale situation. In the broader market only 6% of mortgages are in some state of delinquency. Shake it up and stir, couple it with the nationwide inventory shortage, and you end up with little concern about a bubble and a rush of distressed inventory. I think the earliest you’d even start to see some of these owners move from Forbearance to some sort of loss mitigation negotiation is the 4th quarter. So really great news for all involved!
In the broader economy inflation is running along at less than 2% (unsurprising) and despite a recent rise rates for a 30 fixed mortgage are right around 3%, which is less than a year ago.
Please call me if you have questions or would like more details about the market and it’s implications for you as a home buyer or seller.
It’s a good life.