We find ourselves at an interesting point in the real estate market right now. Within just a few weeks we’ve gone from a frenzied sellers’ market and a flurry of re-financings as mortgage rates hit historic lows…to our “new normal” of closures, cancellations, and shutdowns that the tragic COVID-19 has brought.
People are wondering if the strong sellers’ market in northern Virginia will continue — after all, it’s been one of the most resilient markets in the country.
If you find yourself questioning whether it’s a good time to buy or sell…or if you should “wait it out,” please read on for some perspective…
Is now a good time to BUY?
If you have a secure job and have been considering a move — especially “moving up” to a larger home, low interest rates and the new economic uncertainly can certainly work in your favor. You’ll be able to get more for your money, and sellers may be willing to negotiate a bit…something that wasn’t happening in the midst of our low inventory environment. As an example, in February Loudoun County’s active listings were down over 20% from February 2019. But February sales were up over 11% over February 2019. There were more people buying, but choosing from a decreased supply of homes. This resulted in a lot of frustrated would-be buyers.
Our current situation may present an opportunity for buyers to have a fighting chance at the home of their dreams, versus our recent climate of competing against numerous other buyers.
But be aware that with physical distancing, sellers and agent have to be creative about showing properties (likely virtually). Everything, including appraisals and inspections may be done a bit differently. With that said, there has continued to be strong activity in northern Virginia over the past couple weeks, with contracts being ratified and people moving forward with their home buying plans. Activity on the new construction front has also been pretty steady, as I experienced last weekend when out looking at new homes with a buyer client. Showings are by appointment only and need to adhere to safe protocol, but they are still happening in person (or virtually if you prefer).
Is now a good time to SELL, or should I wait it out?
This may be a bit harder to read, but what we’ve learned from past economic downturns is that sellers who list their property sooner, rather than later, tend to be glad they did. We don’t know for sure how long an economic downturn in our country might last, once we emerge from our current business standstill. But I think we can all agree that it may be a long road back to economic strength. It may be better to take a bit less for your home now than risk a bigger price adjustment later on. Fortunately, sellers are coming from a position of strength, and the market is very different than it was preceding the 2008 housing bust.
Demand has been strong.
Again, it bears repeating: We’ve just recently been in an incredibly strong sellers’ market with high demand and low inventory
The market can certainly support a bit more inventory for sale.
Historic low mortgage rates bode well for the housing market going forward, helping to sustain demand.
Supply shouldn’t hit the levels it did in 2008 because…
We are unlikely going to see a rash of foreclosures, because sellers aren’t as over-leveraged as they were back in 2008, when many homeowners tapped their over-inflated equity and ended up upside down on their mortgages when the market crashed.
Lenders’ standards have been stricter than preceding the 2008 housing bust.
If you’ve been thinking about listing your home but are a bit spooked, remember that buyers are still out there! People who list early — before any downward pressure on the market may set in — are typically very thankful. Contact either me or Maggie to discuss your own situation. At 15 West Homes and Keller Williams, we continue to find smart and creative ways to serve our clients and get business done, even under the toughest and most unprecedented circumstances.