The REAL Market Update

Perception vs Reality

Folks, there is a lot of misinformation out there about the real estate market, especially the regional market, that is leading to some terribly erroneous perceptions about the market in the coming years.  We were just discussing a survey which found that 67% of the respondents believe that a housing crash is imminent in the next 3 years.

Why is that?  I think more people need to read my blogs!  If you have been a regular reader, you have seen me lay out a consistent, data driven analysis buttressed by high level anecdotal evidence that demonstrates that we are not facing any such thing in the Northern Virginia region.  Check out this week’s update (and previous posts) and see if you agree.

Last week we had a mere 1,252 homes on the market in Northern Virginia (which once again encompasses inside the Beltway, Fairfax, Loudoun, Prince William and Fauquier counties!).  We had 479 properties go under contract, but only 214 new listings.  You can see where this is going.  This translates to a mere .7 (that’s point 7) months supply of houses, which compares to 4.1 months nationally.  The rental front is even worse, with only a half month’s supply.   We are 500,000 new home starts short nationally each year for population growth.  Distress sales?  We had 5 short sales and 6 foreclosures.

My favorite saying now is  “If we had more homes to sell, we’d be selling more houses”.  So while there are certainly some powerful storm clouds in the national economy, which I’ll discuss, we have a long, long way to go before supply and demand equalizes.  There are numerous other fundamentals at play but today I will point you to previous posts for more detailed analysis of those.

On the broader economic front, inflation came in last month at 6.2%, which was “higher than anticipated”.   For that to be true you would have to have stopped going to the grocery store or are a member of the administration crossing their fingers.  Expect the Fed to go back to another .5% rate hike this month, with more to follow.  Inflation is not dying as they wanted, and if anything at this point, after it being highly elevated for this long and not responding to their efforts, expect Powell to likely over-correct.

All of this is to say, if you are a home buyer, don’t be afraid to get into the market.  If you are a home seller, not a lot of competition for you now!  In either event, give me a call and together we’ll navigate this constantly evolving market.

It’s a good life.