There is a LOT going on that is affecting the local housing market, some of which is a “surprise” to the so-called experts but which probably shouldn’t have been. Ever since inflation reared its ugly head at the beginning of the Biden administration I have been blogging and talking about how a huge component of the inflation was “cost push” due to regrettable (OK tragic) government policies regarding spending and energy in particular. Those conditions have not changed nor will they this year. The inflation report came out this past week at 3.5%, well above the economically desirable target figure of 1%-2%. As a result, the Fed is now saying that instead of the 4-5 looked for and anticipated rate cuts we were looking at this year, we are now likely looking at NONE!. Ouch.
This has created major volatility in the mortgage market. Last week the market moved off 170 basis points in one day, making it one of the 10 worst days in the last decade. That means that some rates moved over a quarter percent in a day. Now more than ever the lender and the agent team are super important so buyers are protected against these volatilities. The rising rates of course eat into qualifying and budgets on the buy side, but also make it less desirable for the move up folks.
So what does all that gloomy news mean for the Northern Virginia market specifically? We are in the full on Spring market now, and so while still incredibly low inventory is up to a tic over 1,600 homes which is good news. This translates to a .8 months supply of homes. We are still seeing multiple offers on most listings unless they are already priced at the “bid up” price, in which case there are some that are sitting. There are only 3 foreclosures and 4 short sales. So the NOVA market is largely shrugging off the negative national trends. If you are thinking of buying or selling in the coming year it’s important for us to sit down now and come up with a game plan that incorporates what is actually happening in the market right now. I’m always available to chat.
Enjoy the Spring!
It’s a good life.
Chris
