Happy Springtime to all! We wanted to share our take on this year’s market. Before writing,I read my update from this time last year and was struck by how similar the market has remained. Overall we continue to be positive and think it will be a busy year.
We started off the year with low inventory. All of our agents had buyers they were working with, but not many quality homes to show at various price ranges. So when the right home came on the market, it was snatched up…frequently at or very close to list price – sometimes with multiple offers. There are a couple of houses we are putting on the market this weekend that I bet will be gone by next Tuesday.
Right now (April 25, 2012) there are 164 homes on the market in Springfield. There are 290 under contract. That means less than a one month supply of homes. In Lorton, there are 78 homes on the market and 28 under contract. That’s less than a three month supply. In Alexandria, there are 926 homes on the market, with 291 under contract. This would appear to be slightly above a three month supply of houses. Here’s the catch. If you look in detail at the individual sales, you find that page after page in Alexandria has homes that have been on the market from 200 days to two years. This means that those homes are not really getting showings or buyer interest. The superior products on the market in Alexandria are getting a lot of attention and moving quickly.
No, we’re not quite back to the days of 2005. However, owners that have made their properties really shine and have worked with us to price them correctly, have had consistently great results. It just feels like, in many price ranges, there is an upward pressure on prices.
Meeting with appraisers to share relevant comps that support value can be critical to the best properties going to settlement at the originally agreed-to price.
With that said, owners that have chosen not to make needed upgrades or take care of maintenance issues and/or that have placed their homes at unsupportable price points, continue to see them sit on the market month after month. Time and days on the market are not your friend if you are a seller. If a home in the range of $750,000 or less has not had an offer in 45-60 days, then it is not priced correctly or there are staging issues.
The lower the price range, the more people can afford the house. So townhomes under $450,000 and single-family homes under $600,000 should sell more quickly. The good news is that the first-time and the move-up buyers are both actively engaged in finding the right homes to buy.
Over the last year we’ve seen the big influx of people moving into our area as part of the Fort Belvoir base realignment, but what happened last year is that many of them either were not ready to buy or already own homes in other places that they can’t sell. So rental demand and prices shot up quickly. A home that had rented in January for $1,800 would rent for $2,100 by the time June arrived. The rental market is still hot.
In addition to Fort Belvoir, the Springfield Mall massive renovation is moving forward. This will be more of a “town center” feel with apartments, condos, and office components. The mix and density will attract the restaurants that this area has been waiting for. The Hilltop complex with Wegmans is full steam ahead. Across from our office the Inova Hospital will double in size. Several other office buildings will be built as well. The Kingstowne Town Center will have two more towers and the office building next to Kohl’s is going up quickly. These are just a few of the many projects shaping the Kingstowne, greater Alexandria, Springfield and Lorton areas we serve every day. All these things will generate possible buyers as folks like to live close to where they work when traffic can be so tough.
As I write this, interest rates are fantastically low. A 30 year Conventional fixed load is available for 3.875% with no points! A 30 year fixed FHA loan is available for 3.75% with a CREDIT to the purchaser. No one has a crystal ball, but having great rates and stable prices with more people moving to the area and the improving jobs outlook seems to be stacking the cards in favor of home ownership.
It’s true that qualifying for a loan is more cumbersome and regulation changes have made for more paperwork and closer scrutiny, but people with good credit and income to debt ratios are having few problems purchasing.
Every home is different. Every lot is different. Generalities don’t apply in real estate when it comes to your home. If you are thinking of selling, we’d be happy to customize our advice to your own unique situation. No cost, no obligation. It’s just what we do.