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Updates on The Northern VA Real Estate Market
• In May of last year, Fairfax County had 8,128 real estate listings for sale. Today, there are approximately just over 3,700. That means listing inventory is 54% lower than last year, according to Bright MLS.
• Why is that stat important? It shows that the supply is insanely low right now in Northern VA. Similar reports are coming from national real estate data as well.
• National reports have shown home prices rising slightly, buyer demand up, and a flood of new listings are coming, however not enough to satisfy the low inventory and demand.
• As you can see, showings have increased since mid April and buyers have started to go see more homes.
• Despite economic challenges, non essential businesses remaining close, real estate is strong. High buyer demand means good market for sellers.
• However, if buyers are able to find the right property and get an offer accepted (this can be challenging, but definitely doable) they also get the advantage of locking in a historically low mortgage rate for potentially 30 years.
• If you are just looking around at homes, now is not the time to do that. Please stay home. But if you need to buy or sell, the real estate market is currently thriving in Northern VA.
• If you are staying at home and looking for something to do, check out this article by Margaret Heidenry if you are putting of organizing your kitchen. You are welcome.
• Virginia and many other states still have stay at home orders, and the economy has continued to take a coronavirus beating with job losses increasing.
• It no longer is speculation, the data has shown that real estate is slowing down. There are less buyers and less homes for sale. Which translates to less home sales.
• Fannie Mae’s report last week highlighted this. Below is an excerpt from the report.
“…heading into the second quarter, housing activity is expected to slow significantly. Between declining purchase mortgage applications, falling new single-family for-sale home listings, and waning consumer confidence, it is evident that people are holding off on purchasing and selling homes in light of the major uncertainties surrounding the effects of the virus and the outlook for the economy.”
• However there was also some positives for sellers and buyers that came out of Fannie Mae’s report regarding home values. Fannie Mae adjusted their outlook in price appreciation for the year from 4.6% increase to .4% increase. So basically, home values should not go down much, if at all.
“Besides the expected short-run nature of this economic downturn, we believe there are additional factors limiting price softness. First, entering the current downturn, a lack of housing supply was putting upward pressure on prices. The months’ supply of existing homes for sale was just 3.1, a record low for the month of February. Second, the nature of the current sales slowdown is two-sided.”
The “two-sided” nature of the slowdown refers to supply and demand. Yes, there are less homebuyers out right now. But sellers are also holding back their listings. So, although there are less transactions happening, their is not a significant change in supply and demand that would send prices way down or way up. They should stay steady.
The report also acknowledged the strength of the housing market before the Coronavirus, fueled by low interest rates and healthy demand.
Of course, every area and neighborhood is different. So when buying and selling always check your local data as well.
• Good news for buyers, if you do decide to buy a home during this time you will find less competition. For many buyers, this means you can actually get a home without the huge bidding wars seen previously. And it can also be done safely and, if you choose, completely remotely from showings to settlement.
• The good news for sellers, if you do choose to put your home on the market right now, prices have not shown any sort of significant decline. You still have a chance to sell and it can be done safely by using some extra precautions.
• Mortgage rates also have gone back down after a temporary surge following a flood of refinance requests.
• The national real estate market is beginning to show some signs of a possible slowdown. Redfin, a major national brokerage announced today it was temporarily furloughing 41% of its agents and laying off 7% of its staff. This is days after releasing a report that outlines increase pulling of listings, slowdown in showings, decrease in listing price and more.
• Showing requests through ShowingTime are down in Virginia nearly 62% from this time last year. ShowingTime handles a majority of showings in our local MLS.
• In April so far in Fairfax County, 211 homes went under contract, on pace for 904 for the month. In April 2019, 1,837 went under contract. This would mean homes receiving a contract would be down 50%.
• Inventory is also low, which likely plays into the previous stat. In Fairfax County, there is currently 1.5 months of inventory (this stat refers to how long it would take to sell all of the current homes for sale). Last year April ended with 4.1 months of inventory.
• If inventory were to increase, or buying power decreased further due to continued coronavirus layoffs, it could mean a drop in home values in our area. However, it is hard to say if this will happen because nobody can accurately predict how long the virus spread will be dangerous enough to slow down the economy.
• Have questions about what it means for your particular real estate goals? Get in touch with me and I can talk specifics with you. For those who need to sell and want/need to buy, there is still opportunity in the market.
Today, Governor of Virginia Ralph Northam issued a stay at home order for Virginians. The order says, in a nutshell, stay at home unless you have a reason to be out.
The previous restrictions on non essential businesses remains. The goal is to slow the spread of the virus. The restrictions are in place until June 10th.
What it Means for Real Estate
Is real estate essential? According to both Department of Homeland Security and the Governor, it absolutely is.
That means that you can still buy, sell and lease housing and I can still help you do so.
People still need housing, so the real estate industry will continue. The best real estate professionals are putting in place some new practices.
The emphasis will be more and more on safely showing, negotiating and closing on homes.
If you are not serious about buying right now, and are just in the “research phase” I recommend that you not go to in-person showings.
If you are seriously in the market to buy, only go see homes in person that you are considering writing on offer on. If you are comfortable with a full virtual showing, I can do that as well.
• Virtual showings. I am able to show you your top choices via Facetime or equivalent, or send you a detailed video of strengths and weaknesses of each home.
• Protective gear and disinfecting. As a seller, leave gloves, sanitizer and make sure to keep your home clean after showings. Put a sign out to remind buyers to please not touch any surfaces.
• E-signing offer paperwork. All paperwork can be done virtually to secure your property.
• Virtual earnest money deposit. For buyers, this is much like depositing a check with online banking. You can send in your earnest money deposit electronically to the title company to hold.
• Inspection. For your home inspection, I will attend and the inspector will send you a thorough report on all deficiencies found in the home.
• Remote closing and notarization. Before you are under contract, make sure that your lender and title company are able to perform a fully mobile closing. Then you will not have to go to the title company.
Let’s take Fairfax County for example. Last year, in March of 2019, there were about 3,190 new listings put on the market. This Month, there were 2,784 new listings. A decrease, but not a huge one.
The inventory is a different story. The homes currently for sale, 3,332, is 50% lower than this time last year.
The inventory is very low, and April could show that more sellers are not putting their homes on the market. There is also anecdotal reports from agents in surveys that buyers are holding off as well.
However, it is safe to say that there has not yet been a decrease in home prices, or a large drop in number of homes sold. This could come in April, or could not.
Remember, before coronavirus the market in Northern VA was very competitive. So if you need to buy, this could be a good time to find a house with less competition.
If you want to know what you should do in this market, reach out to me and tell me more about your situation.
Update 3/25/2020: On Monday, Gov. Ralph Northam announced that some businesses would be forced to close.
However, service businesses like real estate will be allowed to continue to operate. They must maintain social distancing and work remotely wherever possibly.
Other areas of country such as New York have seen real estate showings stop because of how rapidly the virus is spreading and how many are infected.
If you are wondering if you should buy or sell during this time, my answer is yes. Many are still doing so and real estate can be bought and sold by using extra precautions.
The supply (sellers) and demand (buyers) have both seen a decrease according to showing data, my conversations with other agents and surveys done by Realtor associations.
Time will tell if that trend will continue. And be reflected in home values.
Update 3/20/2020. As predicted, more restrictions have come. Some states are requiring for non essential businesses to close.
Real estate has been specifically mentioned as non essential in New York City. But that could change, and Virginia real estate remains open for business of 3/20.
The Coronavirus and the impact from it’ss spread are now being felt across the United States.
There has been a run on supermarkets for food and supplies. Professional and collegiate sports leagues have suspended their seasons.
The US government has imposed travel bans and bans on gathering, with more restrictions likely coming.
On the financial side, the stock market has seen huge losses as investors are fearful of what the future holds.
Since my expertise is in Virginia real estate, this page will be devoted to the health of our real estate market in Northern VA as it reacts to Coronavirus.
I will provide updates as the market changes in the coming weeks and months.
The impact that COVID-19, or Coronavirus is having on the world has been devastating. The loss of life we are experiencing is tragic.
My heart goes out to everyone who has been personally affected or has loved ones who have been affected.
I have been called many things in my life. Doctor is not one. So for more information and updates on the spread of the virus, here is the World Health Organization site.
I will stick to keeping you informed on our real estate market.
Real Estate Market Updates
March 25th, 2020
Congress has passed a stimulus worth 2 trillion that is aimed at helping individuals and business that have been affected by the coronavirus.
On the real estate side, agents are beginning to report that some buyers and sellers are holding off because of Covid-19 according to Virginia Association of Realtors.
But overall the real estate market in Northern VA has not been yet affected like other industries.
More will be revealed as the sales data from March come out.
March 21st, 2020
In a sentence, the real estate market has slightly slowed from the frenzy it was in the beginning of 2020, but we do not know the extent just yet.
The real estate market has stayed strong in Northern VA. But we are seeing some signs of potentially moving away from constant multiple offer situations.
Showings have reportedly seen a drop, as buyers have concerns about the risk of being out.
Many agents and sellers are beginning to offer virtual showings via smartphones or other technology.
I have ceased participating in open houses. Some large real estate companies have now also made policies disallowing agents from holding open houses.
NAR has reported that nearly 50% of real estate agents nationwide have said homebuyer interest has decreased since the virus.
The other factor coming into play is the volatility in the mortgage rates. Freddie Mac reported that lenders increased prices in response to a huge amount of mortgage demand.
If mortgage rates increase along with a drop in showings, home values will eventually be affected. For how long and when it will start remains to be seen.
If you are thinking of selling, the market is still strongly a sellers market. However soon could be a great time to buy for buyers who go through a large portion of the process remotely.
March 15th, 2020
While the broader economy has been shaken, properties have been seeing a sharp rise in Northern VA over the last couple of months.
Real estate has been hailed as a bright spot in the economy, and our area is no exception.
Home values have shot up as bidding wars have become the norm, with buyers using escalation addendums and waiving contingencies.
It has been a great time to sell, but also a great time if you are buying to try to lock in a low rate.
Before the Coronavirus became a large factor in the US, our market already had a lack of inventory.
As you can see from the chart above, the number of listings in Northern VA have been decreasing since October at an abnormal rate.
This chart covers Fairfax County, Loudon County, Prince William and some other smaller jurisdictions (Fairfax City, Falls Church City, etc.).
Average days to sell went up as is usual in the season, but then also have declined in recent months.
Much of this has been fueled by low interest rates, coupled with the fact there are so few homes for sale.
So what does this mean? We are not sure how the Coronavirus will affect the market overall. But it so far has had little impact.
Real estate is slow moving so it will take time to see a change.
However, it is almost certain that things will change in the market in reaction to what is happening. The mortgage rates already have moved up a bit from their lows.
The Fed’s stimulus package was released over the weekend, so next week we will see how this impacts the mortgage rates. Remember, mortgage rates are influenced by Fed policy but the Fed does not set the mortgage rates.
I have also heard of sellers who have decided to not list their homes, and buyers who are putting their plans on hold.
This is understandable given the fear surrounding Coronavirus. However, it will also affect the inventory of homes for sale.
I will give a further update this week on what the market is doing. Bookmark this page if you would like to find out more.
Best Practices for Buyers and Sellers
March 20th, 2020 Update: Some title companies, but not all are beginning to allow e-notarizations. This includes closing documents.
Your lender and the title company must approve e-notaries in Virginia, so check with your lender and title attorney as soon as you decide you would like to sign remotely.
For all showings, remember to sanitize, use gloves and only have interactions with people where absolutely necessary.
Maintain social distancing, of at least 6 feet between yourself and other professionals or individuals.
If you are selling, here are some tips to keep your home and family safe while selling.
These also will hopefully cut down on putting a lot of people in close proximity of each other to prevent spread.
• Required gloves, footwear for showings. It is common to see booties to go over people’s shoes at showing to keep floors clean.
This is a good practice, but I would add latex gloves for people to grab. This is especially true if you are living in the house.
• If you can, move out before selling. If at all possible, find some temporary housing so that you do not need to worry about any buyers bringing anything into where you live.
• Restrict showings. Require a pre-approval letter from a bank or a bank statement showing proof of funds before allowing anyone to show your property. This will keep showings to serious buyers only.
•Notify buyers to use caution. Leave a note that tells buyers not to touch items with bare hands, etc. Anything you think is important.
•Avoid open houses. Many people are suggesting practices to keep you safe during open houses. In my opinion, I do not think open houses are a good idea for now.
There are too many people who come in the house who may not even be seriously looking. Remember, we are trying to keep your home safe and cut down on the spread to the community.
•Clean. If you are living in the home, keep it sanitized after each showing. Especially door knobs, etc.
• Remote paperwork, remote closing. All of the contract paperwork should be done remotely.
I use electronic signatures anyway, but even more reason now. You can also close remotely, however a notary will have to come to your home.
Encourage them to wash their hands before you start signing. Use your own pen.
• Remote showings. I am available to go and do a remote showing using video. We can do it via real time with facetime or equivalent, or I can send you a video of a home you may be interested in.
• Wash hands. When you enter a home wash your hands if possible. After you are done with showings and get back home, wash them again.
• Open houses. Avoid open houses. I can show you a house with a private showing before or after.
•Remote paperwork. Same as above, do your paperwork via electronic signatures.
Real Estate Help
If you are thinking of buying and selling, reach out to me. The Coronavirus has complicated things for now, and could complicate them further.
But I am keeping a close eye on the market and the situation as whole and I can give you guidance to navigate these uncertain times.
What can I answer for you? Use the form below to ask me a question.