We have 3 items in our December-January Newsletter for you!
WE WISH YOU A WONDERFUL AND SAFE HOLIDAY SEASON AND GOOD HEALTH AND HAPPINESS IN A PROSPEROUS 2018!
1. PLEASE DO YOURSELF A FAVOR AND GIVE YOURSELF A TREAT – YOU DESERVE IT: If you are considering selling, please visit this link…and, if you are thinking of buying, please visit this link. You should like what you find.
2. MARKET SUMMARY & FORECAST: As owner of The R&R Team and as a graduate economist/research analyst, I take great pleasure in completing monthly analyses of the residential real estate market for the *Dulles Market Corridor (DMC) and in providing the results of these analyses to our clients in the form of a recurring market summary and forecast. We strive to ensure that the analyses are consistently accurate by using only highly reliable data. For those who have followed these analyses over the past 19+ years, nearly all will attest that the analyses have been quite accurate in assessing the current status of the local real estate market and in forecasting a near-term market prospectus.
While we had a hot spring market in 2017, the DMC market cooled some during the summer months and then cooled off quite significantly during the fall market. As is typical beginning with the Thanksgiving holiday, sellers began to withdraw their listed properties from the market and the inventory of available listings dropped by 45% in the past month. At present, the inventory is only 35-40% of normal levels that we expect for this time of year and the inventory will continue to decline through the Christmas-New Year holiday period. Also, while we have seen a 3.2% increase in DMC property values over the past 12 months, data indicate that DMC property values have depreciated slightly during the past 3 months at -0.5% per month. MLS data for the real estate market in the DMC indicate that during the past month buyer contractual activity dropped approximately 20% compared to the previous month. We do not expect for seller or buyer activity to increase until after the New Year.
Our most recent analyzes of market absorption rates indicate that we still have a sellers market. The market absorption rate for single family detached (SFD) homes indicates that we currently have 2.0 months of available inventory, while the townhouse market absorption rate indicates 1.0 months of available inventory and condo data indicate 2.0 months of available inventory. FYI: Market absorption rate represents the number of months needed to sell off existing inventory for a particular property type based on recent buyer activity. Real estate pundits nationally and regionally indicate that market forces typically need to stabilize home inventory levels at a 3-to-4 month-supply-level to constitute a normal or balanced market (where economists say that supply and demand are in equilibrium). A market absorption rate that falls below this norm indicates a sellers market, while a rate that is above indicates a buyers market.
Based on U.S. economy performance indicators, the Federal Reserve Board at its December meeting increased the prime interest rate again by another quarter point to 1.50% and indicated that the Fed anticipates three more similar rate hikes during 2018 to offset inflationary tendencies in the improving U.S. economy. Contrary to expected market behavior associated with Fed rate hikes earlier this year, mortgage interest rates instead declined and remained below 4.0% on new 30-year fixed rate mortgages since July 2017. However, if there are further increases to the prime interest rate in 2018, most pundits believe such actions by the Fed will eventually lead to mortgage interest rates as high as 4.4% during 2018.
Our forecast or prospectus for 2018 is that we expect to see continued job growth in the Capital Region, relatively low residential real estate inventory levels, increased buyer activity and still attractive mortgage interest rates. With this prospectus, the DMC real estate market should be quite robust once again in 2018 and activity levels will pick-up early-on after the New Year.
Again, for sellers and buyers who are already active in the real estate market or planning to enter the marketplace in the near term, we highly recommend that you monitor for updates on the local market and review the latest detailed data for each of the important market status indicators on our Team website at this link: R&R Team Blog: Local Real Estate Market Status..
(The *Dulles Market Corridor (DMC) encompasses the large market area of Herndon/Oak Hill, Reston, Sterling/Potomac Falls/Dulles, Ashburn/ Broadlands/ Brambleton, Leesburg/Lansdowne, South Riding/ Chantilly (Loudoun County), Stone Ridge, Aldie/ Arcola and Chantilly (Fairfax County). The R&R Team has been tracking market data closely in the DMC for the past 19 years.)
3. ASSORTED REAL ESTATE POTPOURRI: Hopefully, you will find one or more of these real estate-related topics of possible interest.…
- Alternative Credit Scoring and Getting a Mortgage Loan: Crying to buy a home with bad credit is hard. But what about trying to buy a home with no credit at all? There is a name for these people: “credit invisibles.” It means they do not have credit or a score with the three major credit bureaus (Equifax, Experian, and TransUnion), usually because they do not have a traditional credit trail such as a credit card or college loan. Far from being anomalies lurking on the fringes of society, credit invisibles are shockingly common. According to a recent report by the Consumer Financial Protection Bureau, roughly 45 million Americans are characterized as credit invisible. Meanwhile, 19.4 million are known by another equally ominous label: “credit unscoreable.” That means they have some credit history but not enough to generate a score.
Typically, invisibles and unscoreables face a tough road if they want to buy a home, because lenders are reluctant to approve individuals with no traditional track record of paying back debts. But hope has arrived for these credit-challenged folks: A growing number of lenders are using alternative scoring methods to assess home buyer creditworthiness for a home loan—which means that many who have been shut out of home-buying might now have a shot. Alternative credit data can include rent payments, cell phone bills, insurance and more. The bottom line is that qualifying for a home loan when you have little or no credit history can be difficult, but it is doable today. You just need to be willing to dig up the documentation to prove your excellent alternative credit history. For those of you who are credit invisible and want to buy a home, you may wish to contact one or more of our many recommended lenders at this link who would be happy to help you. (Source: The FHFA).
- Slaying That Credit Score - New Tips For A New Year: Getting ready to buy a house or just thinking about it? Where to buy, what to buy, and how you'll afford it are probably top of mind. But if you're not also concentrating on your credit score…and by concentrating on, we mean actively trying to raise your scores as much as possible, then you may not be looking at the whole homebuying picture. Not only can does your credit score factor greatly into what you will pay for your house, it can keep you from being able to buy one, period. "Your credit history determines what loans you will qualify for and the interest rate you will pay," said eloan. "A credit score provides an easy way for lenders to numerically judge your credit at a point in time. It gauges how likely you are to repay your loan in a timely manner. The better your history appears, the more attractive you become as a loan customer." Thankfully, your credit score is not static; it can (and does) change all the time, and there are all kinds of ways to improve it, some better than others. If you want to review some of the smartest options to boost your score in the New Year, you may wish to review the article at this link. (Source: Realty Times)
- Solutions To Saving Money On Your Next Move: Whether renting, selling or buying, moving in is going to cost you. There is no way around it. Right? Well, actually, there may just be a way to make it not quite so painful. A willingness to negotiate and put in a little work, plus a little inside info on special deals you can take advantage of, can help you cut some costs. This article discusses eight ways to save money on your next move. (Source: Realty Times)
- Making Your Down Payment With Gift Money: To take advantage of low interest rates while home prices climb higher and higher, some homebuyers need help accumulating enough money for a down-payment. To satisfy secondary market loan package purchasers such as Fannie Mae and Freddie Mac and insurers like the Federal Housing Authority, lenders have strict rules about where down-payment money originates. Lenders prefer that borrowers supply their own down-payment funds. It shows that the borrower has some "skin in the game" and that the borrower is good in managing money and can meet financial goals. However, many homebuyers are turning to their parents, grandparents and other family or friends for help. If you are planning on using gift money to help with a down payment, you may want to review the cautions offered in this article. (Source: Realty Times)
We very much appreciate your continued support and hope that you find our newsletters helpful. Please feel free to pass this newsletter along to your friend and associates and please let us know if there is any particular subject you would like us to address in a future newsletter. Kindly send us your questions or comments in an email or call 703-625-5586. Thank you.
Again, please have a wonderful Holiday Season and a great New Year in 2018!
Ron Layton, Realtor
B.S. & M.S.+ degrees, Licensed in Virginia
Owner, The R&R Team, Inc., 19+ YEARS EXPERIENCE
Awarded Life Top Producer, NVAR Multi-Million Dollar Sales Club
Inducted into RE/MAX Hall of Fame
Affiliated with & Empowered by: United Real Estate
10780 Parkridge Blvd, Suite #80, Reston, VA 20191
Cel: 703-625-5586, Fax: 1-703-997-8772