The Holiday Season Market is upon us
The Holiday Market has taken full root, but there are some encouraging signs on the horizon for the real estate market. First off some of the raw data. Last week inventory was down 11% from the previous week to a total of 1,673 homes for sale in the Northern Virginia region. A mere 90 new listings came on the market last week. Even for the Thanksgiving week that is a really low number. As a result, the supply of homes has dropped to 1.2 months, down from 1.4 the previous month.
On the brighter side mortgage applications were up 5%, demonstrating continued strong demand, and it looks likely that Fed rate increases are at their end. In fact some reductions are being discussed. Actual market rates continue to trend downward, which benefits both buyers and sellers.
Why sellers, you might ask? There are SOOOO many homeowners now who love their rate, but have fallen out of love with their home. Faced with the prospect, especially in the move-up scenario, of giving up a low rate for a new one that might be 3% higher while taking on a higher loan amount, many homeowners are reluctant to do so. At first blush this is understandable, but it may underestimate some mitigating factors.
The first is that if your current mortgage is a VA or FHA, it is likely assumable and could be a desirable asset to a prospective purchaser, which might allow you to get a premium for your home. Another would be to look at a temporary rate buydown with an eye towards a refinance when rates moderate. Additionally housing prices in the region continue to go up (3.9% in the last year), so if you are moving up, multi-year delays can start to add up on the cost side. And of course this doesn’t even address the non economic costs of staying in a sub optimal living situation. Nevertheless, at the end of the day staying put might indeed be the most wise and beneficial thing to do, but each situation is different, so if you are contemplating a move let’s get together and put it all down on paper for a proper analysis that leads to informed decisions. I’m always here to help.
Have a wonderful and blessed Christmas and Holiday Season!
It’s a good life.