We have 4 items in our July-August Newsletter for you!
WE HOPE YOU HAVE A WONDERFUL 4TH OF JULY!
1. MARKET SUMMARY & FORECAST: As owner of the R&R Team and as a graduate economist/research analyst, I take great pleasure in completing monthly analyzes of the *Dulles Market Corridor (DMC) residential real estate market and in providing the results of these analyzes to our clients in this blog. We strive to ensure that the analyzes are consistently accurate by using only highly reliable data. For those of you who have followed these analyzes over the past 19+ years, we believe that you will attest that the analyzes have been consistently accurate in providing real-time assessments of the local real estate market and in forecasting a near-term market prospectus.
The DMC real estate market thus far in 2018 has been driven by low inventory levels and surging buyer demand. At the beginning of the year, resale property inventory levels were only 20-25% of normal but in the past 3 months have increased to 55% of normal levels for this time of year compared to the same time periods during past years. With inventory levels have stayed low and after considering the other indicators, the data tell us that we have had a very robust 2018 spring market. Our latest analysis shows that the low inventories levels combined with robust buyer activity since January 1 have resulted in home prices appreciating on average at 1.6% per month during the 3 months comprising the spring market (March-May)...however, this 3-month average appreciation has already dropped to +1.1% per month based on incorporation of June market activity. Our analyses indicate that, while still a sellers market, property values will likely stop appreciating and will begin depreciating ever so slightly as we proceed through the summer months…prices likely may then depreciate even more during the remainder of 2018 if buyer activity continues to wane as is normally expected for the DMC market.
Besides low real estate inventory levels and good buyer demand, another major factor that may have significant impacts on the real estate market are increasing mortgage interest rates. Based on the upswing in U.S. economy performance indicators, the Federal Reserve Board at its June meeting increased the prime interest rate to 1.75% and the Fed indicated it will make two more similar rate hikes yet during 2018. These increases are to offset inflationary pressures in the improving U.S. economy. Thus far in 2018, we have generally seen the 30-year fixed mortgage interest rate increase to the highest levels in over 7 years and have more recently backed off some...the Freddie Mac weekly survey indicated that the average rate was 4.52% this past week. Many pundits believe that added Fed rate hikes may likely result in a 30-year fixed mortgage interest rate of 5.0% by the end of 2018. While these rate increases seem very likely, however, mortgage lenders have reported that they have not seen any reduction in applications for mortgage loans thus far in 2018. However, of concern, the increasing interest rates may serve as a knock-out punch for some homebuyers, particularly first-timers.
It is yet unclear as to the impact of the recently passed Federal tax cuts on the local real estate market, especially for homes priced above $1M. There are possible negative impacts that could be due to reduced tax write-offs by homeowners for mortgage interest and real estate property taxes. The impact of the new tax law is still unclear because Northern Virginia is among the wealthiest areas with highest per capita income levels in the United States, i.e., property taxes and mortgage interest write-offs may be of little concern locally to buyers who can afford homes in the $1M+ price range. We will continue to monitor and advise on this issue.
Our most recent analyzes of market absorption rates indicate that we continue to have a sellers market in the DMC. The market absorption rate for single family detached (SFD) homes indicates that we currently have only 1.4 months of available inventory, while the townhouse market absorption rate indicates 0.8 months of available inventory and condo data indicate 1.2 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.
Our current market prospectus is to expect continued job growth in the Capital Region, to have continuing lower than normal residential real estate inventory levels, for reasonable buyer activity, to have higher but still attractive mortgage interest rates and, while still a sellers market, to have depreciating property values during the second half of 2018. Overall, the DMC real estate market should continue to be healthy but will have reduced activity for the remainder of 2018.
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.)
If you have any questions, please call 703-625-5586 or send us an email today.
2. WHEN SHOULD YOU BUY OR SELL AND WHAT SHOULD YOU DO WHEN YOU DECIDE? Below are some links to our more popular R&R Team articles to assist you as a buyer and/or as a seller: …
- When is The Best Time to Buy or to Sell Real Estate? We are frequently asked when is the best time to sell or to buy real estate. We share this article with hopes that it will help clear up some of the prevailing misconceptions that linger among both sellers and buyers as to when is the best time to sell or to buy real estate. …
- Seller Preparations for the Market: Sellers who wisely complete pre-market preparations before listing a property are rewarded tremendously for their time and efforts. We hope that you these two articles helpful: the first is a getting started checklist for sellers and the second outlines detailed early-on actions for sellers. We are always available to assist you with our first-hand experience.
- Buyer Preparations for the Market: Reduce your stress and better ensure your success in buying your dream home by using these two articles: one article is our getting started checklist for buyers and the second one is our detailed early-on actions for buyers. …
Also, please remember that you will benefit from our NEARLY 20 YEARS OF EXPERIENCE in the local real estate market. If you have any questions, please feel free to call us at 703-625-5586 or send us an email.
3. KEEP THE REFERRALS COMING AND THANK YOU FOR YOUR TRUST! The finest compliment we can ever receive is your referral of our services to your family and friends. Besides using us for your repeat business, please keep telling your family and friends about our services and please keep sending us your referrals! Here are some key points to remember: sellers pay listing fees as low as only 4%; all buyers get generous cash-back assistance; and our support to our clients continues to be the best in the business backed by nearly 20 years of successful results. Please see added information on our service offerings for sellers at this link and for buyers at this link. Our promise: we will continue to take great care of each of you and your referrals. Thank you for your trust!
If you have any questions, please call 703-625-5586 or send us an email today.
4. ASSORTED REAL ESTATE POTPOURRI: Hopefully, you will find one or more of these real estate-related topics of possible interest.…
- The Inside Workings of Credit Scores: Consumers are encouraged to check their credit reports once per year. The primary reason for doing so is to make sure there are no mistakes. Unfortunately, credit reports are prone to contain mistakes. Such mistakes are not really the fault of the three main credit repositories (Equifax, Experian and TransUnion) because all three are just a database. Whatever is reported to them is what you see. This article discusses the ins and outs of credit scores and discusses some points that everyone should know.
- Credit Scores to Get a Boost? McLean Mortgage and CNBC report that because of improved standards for utilizing new and existing public records, the three major credit reporting companies are now excluding all tax liens from credit reports. That means some scores will head higher. The new rules come following a study by the Consumer Financial Protection Bureau that found problems with credit reporting and recommended changes to help consumers. This article discusses these changes in credit reporting.
- Get the Home You Want, Millennials: Smart Strategies for First-Time Homebuyers: It is not easy to buy a home in a hot market where inventory remains at historic lows…and that covers a lot of areas across the country at a wide range of different price points. But it is especially hard right now for Millennials who are not exactly getting a warm welcome from the market that has been begging them to participate. This article provides some sage advice for Millennials to help them succeed in the current real estate market.
- What You Should Know Before Deciding to Buy A Condo: Condos were once thought of as homes that attracted singles or couples, often without children. But today, condos are growing in popularity and attracting families of all sizes. This article reviews some of the pros and cons of buying a condo and offers some cautions that should be heeded.
- Eight Must-Dos Before You List Your Home for Sale: You are considering listing your house and it is time to get it in tip-top shape. You may think your home is already listing ready right now but a real estate agent may not agree. The eight activities mentioned in this article will help you put your house in its best order before listing it.
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.
Very Respectfully,… .
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
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