You know what’s interesting?
I find the latest statistics published about our Real Estate Market interesting. I find them interesting, but in a confusing kind of way.
Not only are those statistics for LAST MONTH (remember, when we were busy celebrating Christmas?), but those statistics reflect the homes that SOLD last month. Those homes that sold (i.e. closed) last month actually went under contract probably before or around THANKSGIVING.
So, what do the numbers from the Thanksgiving timeframe have to do with today’s market status and its future?
Well… not much… and that’s what’s confusing.
The good news is that we can see the true picture of the Real Estate Market today – although not through the statistics. We can see the true picture right from the trenches.
Today’s Real Estate Market in Fairfax County – from the trenches
By being in the trenches, I can tell you that today’s Real Estate Market is very different from the market back in November.
On one hand, the rules for mortgages are now tougher than last year.
On the other hand, we’re getting into the Spring market, with more buyers and more sellers boosting the activity.
So what we are seeing today from the trenches will be reflected in the statistics published in mid-March – or perhaps later…
Here’s what the statistics are most likely going to show:
- Starter homes (i.e. condos and townhomes) will have multiple offers and will sell for higher than sales price
- Move-up homes (larger townhomes and single family detached) will hold their prices steady
- We’re going to have a very active Spring market
Let’s look at these points one at a time:
1. Starter homes (condos and townhomes) will have multiple offers
When homes for sale have multiple purchase offers, they usually sell for higher than sales price, so we will likely see appreciation of condos and townhomes.
Actually, we’re already seeing multiple offers for the most attractive and well-priced homes in that section of the market.
So if condos and townhomes are appreciating, what’s happening to move-up homes?
2. Move-up homes (larger townhomes and single family detached) will hold their prices steady
Most move-up buyers depend on the sale of their own homes before they can afford to purchase their next one.
And, in the past few years, we have seen buyers who could qualify to purchase their move-up home while still holding onto their previous home.
But as of January 10th 2014, when the new rules for mortgages came into effect, it became more difficult for these same buyers to qualify to purchase a larger home without selling their current home. So we’re going to see more “Home Sale Contingencies” on offers for larger homes, and we’re also going to see that these buyers can’t go as high in price as they used to.
So while the demand for move-up homes will be strong this Spring, their prices will probably stay somewhat steady (perhaps with a more modest appreciation than in the previous couple of years).
And speaking of Spring…
3. We’re going to have a very active Spring market
Based on the number of calls that we have been getting from new buyers and sellers this month, I expect this one to be an exciting Spring season for the Real Estate Market in Northern Virginia.
The good news is that many sellers are getting ready to put their homes on the market. A few sellers who have already listed their homes this year, have seen lots of buyers come through their homes (sometimes over 60 parties over a weekend!).
Since buyers have been scouting the real estate market for a few weeks now, they know the inventory, and when they see a well-priced home that meets their needs, they’re not hesitating to jump into the action (hence the 60 parties over a weekend…).
And, as more and more sellers list their homes in February, March, and April, all this pent-up demand will be met with the new supply of homes, making this Spring a very active time for our real estate market.
Are you planning to move this Spring?
As you can see, the statistics that everyone else is paying attention to are from Thanksgiving (a full 2 months behind of what’s really happening now)!
The good news is that you just got the inside scoop, right from the trenches, and you now know why this Spring is gearing to be an exciting time for buying and selling real estate in Fairfax County.
If you are planning to move this Spring, let’s get you ready: give us a call at (703) 480-6575 or send us an email at: [email protected]. We’d love to be of help.
Happy House Hunting!
Image by rfduck on flickr