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September 2020

 

REAL ESTATE NEWS
Brought to you by Ron Layton/The R&R Team

 

 

DULLES MARKET CORRIDOR REAL ESTATE ACTIVITY REMAINS QUITE ROBUST!!!

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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)* (defined below) residential real estate market and in providing the results of these analyzes to our clients. Our analyzes and market forecasts have proven to be consistently accurate over the past 21+ years...we believe that you may find the results of our most recent analysis and forecast for the DMC real estate market to be of interest in the midst of economic reopening efforts from the ongoing COVID-19 coronavirus pandemic.

Overall, the DMC residential real estate market continues to be driven by low inventory levels, historically low mortgage interest rates, continuing robust buyer demand and, to a lesser extent, impacts of the COVID-19 coronavirus pandemic. While the COVID-19 coronavirus pandemic continues, inventory levels of DMC residential housing remained low but increased by 5% in the past 30 days. During the same period, mortgage interest rates remained at or near historically low levels and buyer activity slowed some but remained quite robust in the DMC. At present, overall inventory levels remain at approximately 25% of normal expected levels for this time of year. With continued COVID-19 face mask/social distancing restrictions and historically low mortgage interest rates, buyer contractual activity slowed some but remained quite robust with 850 contracted properties in the DMC in the past month versus 887 newly contracted properties the previous month. This high level of late summer market activity has never been seen previously (July-August are generally referred to as "the dog days for real estate"). With the continuing low inventory levels and continuing robust buyer contractual activity, market absorption rates indicate a continuing SELLERS MARKET. Market data shows that DMC property values experienced increased appreciation (+0.8% per month on average in the past 3 months) and that property values will continue to appreciate with greater DMC fall market activity than is normally expected.

Mortgage interest rates continue to be great news for both home sellers and buyers. The 30-year mortgage interest rates have declined by over 1% in the past year and has continued to decline over the past 2 months. The current mortgage interest rates are holding at or near all-time historical lows (since tracking started in 1971). Freddie Mac weekly survey reporting indicated an average rate of 2.87% this past week for a 30-year fixed rate mortgage. The outlook is for mortgage rates to remain relatively low into 2021 and for the real estate market to serve again as a core contributor in our local, state and national economic recovery. 

Based on our most recent analyzes of DMC inventory levels and competitive buyer contractual activity, market absorption rates indicate that we continue to have a SELLERS MARKET in the DMC. Market absorption rate represents the number of months needed to sell off existing inventory for a particular property type based on recent buyer activity. The market absorption rate for single family detached (SFD) homes indicates that we currently have only 0.6 months of available inventory, while the townhouse (TH) market absorption rate indicates a supply of only 0.4 months of available inventory and condo data indicate only 0.5 months of available inventory. FYI: 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 (a market situation 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 this range indicates a buyers market. 

In summary, based on our recent analysis of available market data and considering that successful economic reopening efforts from the COVID-19 pandemic will continue, our MARKET OUTLOOK for the DMC is as follows: to return to continuing JOB GROWTH in the Capital Region; to experience continuing LOWER THAN NORMAL INVENTORY LEVELS for residential property; to enjoy ROBUST BUYER DEMAND and competitive contractual activity for the remainder of 2020 and into 2021; to continue enjoying historically LOW MORTGAGE INTEREST RATES into 2021; to see no change from a continuing SELLERS MARKET; and to enjoy APPRECIATING PROPERTY VALUES during the remainder of 2020 and into 2021. 

(*NOTE: 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 22+ years.)

For more in-depth data and details from our analysis, please go to The R&R Team website at this link.

Have questions or comments? If so, please send us an email or call us at 703-625-5586.

 

 

How to Buy a Home Sight Unseen

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If you're thinking about buying a house right now, you're probably wondering how best to go about it. The truth is, you can still do in-person tours in some places, depending on the local regulations, but many people are buying homes right now without stepping a foot inside until the deal is done. 

Sight unseen deals are nothing new, but up until recently they were used mostly for foreign buyers, investors, or long-distance home shoppers. These types of remote deals have become more mainstream in the wake of the COVID-19 pandemic, and there is evidence to suggest that this more than a passing trend. 

A survey from 2018 showed that about 20% of homebuyers had made an offer on a home without seeing it first. A more recent, COVID-19-influenced survey, found that 45% of homebuyers in the last year had made an offer without seeing the property in person. In April of this year, Realtor.com found that "24% of 1,300 consumers surveyed said they'd be willing to buy a home without first seeing it in person." 

If you're considering purchasing a home sight unseen, keep these tips in mind:

Work with the right agent 

If you're buying a house without touring it first, you have to depend on your agent to be your eyes and ears. It's crucial that you go with a local expert, especially if you aren't super familiar with the area.

Take advantage of technology 

Online listings with 3D home tours are up by more than 600% since the pandemic hit. Listings that have this functionality are likely to rise to the top because they give you a better feel for the home. Remember, whether you're looking at a carousel of images or a 3D tour, don't forget to ask your agent to go a step further.

"Once you know which homes you're most interested in, have your agent book some showings and take you along on the tour using FaceTime," said HomeLight. Being able to view the property with someone in real-time will allow you to ask questions while getting an understanding of the "flow" of the home.

Ask for a floorplan

Today, you're more likely to find home listings that include a floorplan image. If you don't see one, make sure to ask. While video tours offer an understanding of how a home feels, a detailed floorplan helps you ensure it measures up to your needs. 

Knowing the full layout of a home will give you some insight on what day-to-day life will be like. For example, watching a video tour might not reveal the fact that the new home office you're excited about shares a wall with a noisy laundry room. Also, being able to quickly reference dimensions will allow you to imagine how you and your furniture will fit into the new space.

Order an appraisal and a home inspection 

Even in cases where they're not required, you don't want to skip these steps. Especially when you can't or don't want to tour a home yourself, having expert and objective documentation regarding the value and condition of the home is more important than ever 

 

 

Most Tax-Friendly States of 2020

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Retirees are often the main group we imagine moving from higher-tax states to states considered tax-friendly. The coronavirus pandemic, however, has led younger people, many of whom are in their prime career years, to also look for low-cost places to relocate. Telecommuting has made it possible to leave big (often expensive) urban areas and work from anywhere, which is one factor behind the shift.

The following are some of the country's most tax-friendly states right now, regardless of why you might be relocating.

Wyoming 

There's no state income tax in Wyoming, and the average state and local sales tax is just over 5.3%. The average property taxes are $635 per $100,000 in home value. Wyoming has a strong mineral and energy extraction industry, and that's one of the reasons the state can keep taxes low for residents.

Nevada 

There is no state income tax in Nevada, and the average property tax in the state is $693 per $100,000 in home value. The tax-friendly nature of Nevada may be one reason there's an influx of Californians moving to the state and the scenic Lake Tahoe area in particular. Nevada receives over a billion dollars each year from the casino and tourism industry, which helps them avoid imposing a state income tax.  

Florida 

Florida has no state income tax, but property taxes tend to hover around the national average. The state and local sales tax rate is also somewhere around average for the country at 7.05% combined.

Alaska 

Alaska may not provide you with sunshine and beaches, but it could be an economically sound decision. Alaska residents pay neither state income taxes nor state sales tax. Certain municipalities in Alaska might impose local sales taxes that are as high as 7.5%, but even so, the average local sales tax hovers around 1.76%. There's also the Permanent Fund Dividend ($992 for 2020), which is paid to every Alaska resident who's lived there for a full year.

Tennessee 

Prior to 2016, Tennessee did not tax wages, but still taxed income from investments and other "unearned income." Legislation was passed in 2016 to gradually eliminate taxes on investments by 2021. The state currently carries the third lowest tax-burden in the United States.

 

 

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