The REAL Market Update
The calendar has flipped and the 2023 market has begun! The year is off to a very busy start as a lot of folks who deferred house hunting during the holidays have hit the streets. Showings are up as are loan applications. However these buyers are being greeted with an ever dwindling supply of homes to choose from. Inventory is way, way down. Last week we were looking at 1,441 homes in the NOVA market and this week we are down further to 1,257. Ouch. With all this pent up demand out there, this would be an exceptional time to be selling your home, but sellers aren’t taking advantage of it. What gives? The biggest reason is related to interest rates. And I don’t just mean the rate you have to pay to buy a new place, which even while hovering around 6% is a great rate. 60% of US homeowners have a house with a current mortgage rate of less than 4%! So if you are looking to move up the idea of adding a couple hundred thousand to your mortgage balance and bumping up the rate 2%-3% at the same time may not be that exciting. This is really impacting the move up market. The downsizing market is not much effected, as we have gotten used to the current rate range. But the desire to move is still there, so if as projected as the recession factors grow, and we see rates retreat to something that starts with a “4”, I believe we will see a marked increase in inventory.
Absorption continues to outpace new listings, and have less than a 1 months supply of homes on the market, so we are still in a sellers market but closer to a balanced one. With fewer homes on the market there will be fewer sales but as soon as the inventory rises sales will rise commensurately. Prices are stabilizing, and proper pricing is still important. In some instances we are seeing multiple contracts, yet many continue to over price their homes, as we saw 34% of the current listings take a price reduction.
Last week we had 12 foreclosures and 6 short sales in the region. This week it’s 9 and 4. As I’ve said until I’m blue in the face distress sales will happen from time to time but nothing like the 2000’s is coming to this region.
One really interesting loan program that is out there for you folks who have retired but would still like to make a purchase. This is the best program of it’s type I have seen. It allows you to use your retirement assets as a means to qualify despite the lack of employment income and the terms are some of the best and most generous I have seen. Reach out to me for further information about that program, and about anything relating to buying and selling.
It’s a good life.