The spring market has begun…early. For many home buyers, low November and December home inventories have made winter all that much longer, while many home sellers have been waiting for the spring market to list their home.
The Northern Virginia Association of Realtors indicated that “the January market faced an under three-month supply, [and] buyer foot traffic stepped up.” With a tight supply of homes, the Greater Capitol Area Association of Realtors, which covers the District and Montgomery County, reported that “January’s median sales price was $527,500, a 4.6 increase over last year’s median of $504,250 and the highest January level on record.”
With slowly increasing inventories and warm weather bringing more buyers into the market, some buyers feel like everyone is looking at the same home. In certain neighborhoods within the DMV, many homes are attracting multiple offers leaving many home buyers frustrated by the multiple offer competition. While interest rates remain historically low, some buyers are feeling a sense of urgency to buy. The trend towards rising interest rates will continue throughout 2017 and into 2018. According to Lynn Fisher, vice president of research and economics for the Mortgage Bankers Association, “by the time we get to the fourth quarter of this year, we will still be under 5 percent — we are thinking 4.7 percent…something north of 5 percent by the time we get to 2018, and by the time we get to 2019, we show fourth-quarter rates hitting 5.5 percent.”
The key for buyers in this market is to be prepared for competition around their home of choice. Our Capital Estate Group team knows the market and how to position a buyer by evaluating all possible scenarios and offer strategies. For sellers, strategic pricing – and sometimes underpricing – combined with our 3 Pillar marketing plan will attract more home buyers and position the home to sell for the highest possible price under the best possible terms.
We envision the seller markets to continue through 2017 and 2018. Will we see a market shift in 2019? Perhaps. A recent Trinity University study shows that home prices are rising faster than rents in 29 states, up from 14 states just two years ago. The upside? When interest rates rise, buyers see sellers start to flex on price and terms. Still, we seem to be quite a way from the next market shift.