The REAL Market Update
It’s a new year, and yes a new market!
Market shifts occur when a whole bunch of people make up their mind to do a similar thing at about the same time. These things happen for a host of reasons, but given the contemplative nature of all of us around the turning over of the calendar, the first couple of weeks of the new year are always of particular interest. Here’s what we are seeing in the region There are only 1,331 homes on the market in the Northern Virginia region. This is an incredibly low figure for any time of year and any time in the recent history for our area. Last week we had 415 sales, but only 247 new active listings came on the market. So you can see the absorption rate is getting ridiculous. Sales are definitely down, as has widely been reported, but a huge reason for that is there just aren’t enough good properties out there for the people who want to buy them. If there was more inventory there would absolutely be more sales. We are seeing incredible upticks in showings, contracts, and mortgage applications. The demand is still there.
One part of the market that is relatively soft is the move up market. There are lots of homeowners sitting on 3% mortgages and the idea of adding a couple hundred thousand to their loan balance and doubling the rate to buy a bigger house is causing a lot of folks to pump the brakes. As the months go on people will become accustomed to the market reality of 5%+ interest rates. The run of 3% we had was artificial and never sustainable, and rates in the 5’s and 6’s are still exceptional! Our advise to clients these days: “Marry the house and date the rate”. There will be refinance opportunities on the horizon, and buyers can use 2-1 Buydowns to mitigate payment shocks for a couple of years. This iteration of this program is far superior to when they were being used back in the 90’s. Call me to discuss and I’ll explain how a buydown might be a big benefit to you both for buying and also for marketing your home.
One other interesting thing we are observing. We are seeing some nearly completed new construction homes pop on the market as a combination of materials inflation and rate rises cause some old contracts to fall out. Give me a call whether you are buying or selling and let’s talk about what we can do to position you to take advantage of this evolving market.
It’s a good life.