Up or Down? How will our real estate market be in 2016?

Did you know that several Redskins players are amazingly frugal?

Kirk Cousins

Kirk Cousins, the Redskins’ quarterback, drives an old van because he likes to be frugal.

Kirk Cousins, the quarterback, drives an old van that used to belong to his grandparents.

Other players who make millions of dollars per year share 2-bedroom apartments with friends, ride their bikes to practice or drive their 1990’s college cars to work.

These players say that it makes sense to be frugal because while they are making pretty good money now, they never know when their income is going to change and they are going to go from enjoying the good times to dealing with the bad times.

The real estate market also reminds us that there are good times and bad times.

At the moment, we are enjoying a good time in Fairfax County

Not so long ago, in 2008, we went through a bit of a rough patch. Thankfully, it didn’t last very long and now we have been on a good patch for a while.

How long will this good patch last?

Nobody really knows, but so far, the last few months and the current market status point to a continuation of a strong market.

Let’s quantify this strong market…

Where are we in relation to the “market crash” of 2008?

Consider this 10-year graph and the current overall trend of median real estate prices in Fairfax County.

Fairfax County Real Estate: 10 year median sold prices

Fairfax County Real Estate: 10 year median sold prices

You can see that we are on the upswing if we compare the most recent official median sales price of $460,000 in November of 2015 with the low of $308,000 in January of 2009.

One good thing to note is the nice, steady upward slope of the price trend.

Another interesting thing to note is the seasonal adjustment of sales prices

The graph above shows peaks and valleys. Usually the peaks (or high median sales prices) happen over the spring months. The valleys are usually in the winter months (i.e. about now).

Winter is the best time to buy a home

If you want to buy at the lowest price possible this year, these few months (January and February) are your best opportunity to get a “good deal”.

However, the downside to buying a home in the winter months is that there is usually low inventory (that is, not a lot of homes to choose from).

But, it just happens that this year the inventory is not low

Right now, there are strong levels of inventory.

The count of New Active listings is at its 5-yr high.  This indicates over 20% more supply for the winter months than we have seen -in average- for the past 5 years.

Current Active Listings & 5-yr average

Current Active Listings & 5-yr average

So what does this all mean?

These numbers strongly suggest that now a great time to buy a home

  • The market is still steadily moving up, without the indication of a “bubble”
  • There is more inventory of homes to choose from than usual
  • Based on historic seasonality, home prices are as low as they will be for the year

And with the warmer temperatures that we’ve been seeing this winter, moving in the next few months (before the spring rush) could be a great option this year.

Now’s the time to be frugal and to buy your largest investment (i.e. your home) when prices are lower than during the rest of the year.

Contact us today so that we can help you buy a home by school boundary

Call or email to work with a Home by School specialist

Call or email to work with a Home by School specialist

Happy home-buying in 2016!

* Image by Keith Allison on flickr, statistics by RBIntel

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