January we saw a rise in New Listings, however, those fell off in February and continued to stay in a slump in March showing no recovery from the Sept-Dec 2020 inventory erosion that drove the supply of inventory to week’s not months of inventory. The unique sellers market continues and only time will tell when we hit the apex and homes come to market. Keep reading and check out the report.
This month we are going to discuss the effect this erosion of inventory has brought to the market with regards to pricing and negotiability. You know I am not into Hype News, so I will call it a HIGHLY competitive market with little to no room for negotiability and a buyer MUST have a strategy to cover an appraisal gap with no expectation of concessions (assistance with closing costs) In the video I discuss:
- External Factors – What factor do interest rates play in this market
- Negotiability – Take it off the market offers and closing the appraisal gap
- Speed – Sight unseen offers
- Appreciation Rates – Continue to rise, when will we reach the Apex
A Few Standout Trends for the Region
- There is no flee from the city due to the virus, high density living is still thriving
- Negotiability is waning and competitiveness in offers is extremely high (my way of saying bidding war without creating hype)
- Home Equity is at an all-time high = low supply
- Low supply – High demand – Low Interest Rates double ending the market
- Home appreciation is running 10-15% for detached and townhomes across the region
- Refi’s make up 75% of the mortgage origination market = low supply
- Home owners are reducing monthly home expenses = low supply
- Well qualified buyers = high demand
- Largest consumer first time buyers = high demand
- Cash access = historically low interest rates fueling both the low supply & high demand
- NVA has valuable supply locked up – will home owners become sellers or continue holding?
- Locally, Condominiums are growing in inventory but not shifting to a balanced market – yet
- All 4 counties (Fairfax, Loudoun, Prince William and Fauquier) have sold more homes YTD than 2020, further depleting inventory
Opinion
- Do not buy into the hype news, peel the layers of the onion and develop a winning strategy
- Negotiability is diminishing and competition is rising
- Your strategy has to be how you write an offer to take a home off the market, assume risk and reduce contingencies
- Extremely Unique Sellers Market with all time high valuations
- Supply will not be impacted by foreclosures
- Values will continue to rise at a steady percentage until Inventory grows
- Days on Market remain <7 days with most offers written during Coming Soon Status and sight unseen
- Active Listings is the leading indicator – which means New Listings has to grow to exceed Pending Listings to replenish inventory
The magazine is a very comprehensive and a unique Real Estate Trend magazine for this region covering the same 10 jurisdictions of the Northern Virginia Economic Development Alliance. It is always my goal to look backwards only to provide an opinion of the future and actionable advice.
I’m always open to feedback on the magazine to strengthen it for the community and applying the market information to your specific situation as a seller or buyer. As I tell my nephew all the time, You don’t know what you don’t know – Information is King – Just Ask!
I look forward to supporting you soon!
If you would like to download the report, go to subscribeto.realestateofnva.com and I will send it to you!
