Presently, mortgage interest rates on a 30-year fixed loan are down to around 6.8%. This is a big difference from just one month ago when rates were closer to 7.8%. This is great news for anyone thinking of buying a home as they can expect to be able to afford more. For example, a home loan for a $500,000 home with 20% down at 7.8% is about $3,500 per month (with taxes and fees). The same conditions at 6.8% is about $3,200 per month. A $300 savings each month adds up to about $108,000 over the life of the loan. So the benefits of lower mortgage rates is quite obvious for the home shopper. But what about homeowners? Here is what home sellers should know about mortgage interest rates.
5 Things to Know
Home sellers might not be directly impacted by mortgage interest rates, but these rates can significantly affect the pool of potential buyers for their homes. Here’s why sellers should pay attention to mortgage interest rates:
Impact on Buyer Demand: Lower interest rates can attract more buyers as it makes borrowing cheaper. This increases the the number of potential buyers interested in purchasing a home. This can lead to a higher demand for homes on the market and a better bottom line.
Affordability for Buyers: When interest rates are lower, buyers can afford more expensive homes because their monthly mortgage payments are reduced. This expands the range of homes that buyers can consider purchasing.
Faster Selling Process: Lower interest rates can speed up the selling process. With more potential buyers and increased affordability, homes tend to spend less time on the market. This is great news for home sellers with plans for the future.
Price Negotiation: In a market with lower interest rates, sellers might have more negotiating power as there can be multiple buyers interested in the same property. This can lead to higher offers and better selling prices.
Market Activity: Mortgage rates can influence the overall health of the real estate market. High rates might discourage potential buyers, slowing down market activity and making it more challenging to sell a property.
Ultimately, while sellers might not be directly affected by mortgage interest rates in the same way as buyers, understanding their influence on buyer behavior and market dynamics is crucial. These mortgage interest rates set the tone for pricing, timing the home sale, and attracting potential buyers.
What home sellers should know about mortgage interest rates is that it affects how they will want to sell their homes. Mortgage interest rates play a significant role in shaping the dynamics of the real estate market. With lower interest rates, home buyers can afford more. And home sellers will enjoy more activity in the selling process. Lower interest rates invigorate the home buying process for bother buyers and sellers.
The current real estate market in Northern Virginia continues to be steady. Inventory levels are lower than normal and this is keep home prices high. Mortgage interest rates remain around 7.5% and it appears that this is the new normal. This is just some of the indicators of this Market Update for November 2023.
Statistics and What it Means
Using statistics from MarketStats by ShowingTime, we looked at 10 counties in Northern Virginia – Alexandria, Arlington, Fairfax, Falls Church, Fauquier, Loudoun, Manassas City, Manassas Park City, and Prince William. Here are the highlights for Northern Virginia in general, Prince William, and Loudoun counties.
The median sale price for a home in Northern Virginia is now $619,000, which is the same as last month and up 3% from this time last year when the median sold price was $599,900.
At the end of October 2023, there were 2,078 homes sold in Northern Virginia. This is up about 3% from last month and down 9% from last year. So this illustrates the low inventory we’re currently experiencing compared to last year.
The number of Days on Market for Northern Virginia is now 17 days, the same it was last month and down from 8 days this time last year. This is good news for buyers as they have more time to see the homes they are interested in.
Inventory Levels
Inventory levels seem to be the new normal. There are 2,850 homes for sale, which is about the same it was last month. It’s also down about 38% from this time last year. Month’s Supply is another factor to consider. This refers to how many months it will take to sell all the current homes currently on the market. Most consider a balanced market, where buyers and sellers are on the same playing field, to be about 3-6 months supply. Currently, Northern Virginia has a month’s supply of homes for sale of 1.4; this is the same as the 5-year average. These numbers appear to be the new normal.
Many home owners are hesitant to sell their homes. They are unwilling to give up their 3-5% mortgage interest rates to buy another home at 7.5%, no matter the profit margin.
According to Bright MLS Home Demand Index, buyer demand in the Washington Metro Area (which includes Northern Virginia) remains “Slow”, the same as the previous month. The Bright MLS | T3 Home Demand Index measures and tracks consumer and real estate professional behavior related to shopping for real estate. They look at metrics such as views of homes online and in-person showings. Ratings are categorized into 5 score points: Limited (under 70 points), Slow (70-89), Steady (90-109), Moderate (110-129), and High demand (over 130).
This month. the highest ranking areas in Northern Virginia are: STEADY in Arlington (104); SLOW in Alexandria City (83); and LIMITED in Prince William County (69), Manassas City (67) and Falls Church (64).
What the Experts are Seeing
The good news of the market update for November 2023 is that home prices seem to holding steady and strong. When correctly priced, homes continue to sell for what sellers are asking. Multiple offers are no longer the norm. There are exceptions, however. When proper pricing and excellent condition meet, multiple offers are an advantage to homeowners.
This is the new normal for now. The annual percentage rate on 30-year conventional mortgages hovers around 7.5%. The latest Consumer Price Index figures (used to measure inflation) were announced to be at 3.2%. This percentage shows change over time in the prices for a basket of consumer goods. The Federal Reserve has stated that they want to see the inflation figure down to 2%. The next Consumer Price Index report announcement is December 12, 2023 and the next Federal Reserve announcement is set for December 13, 2023.
Advice to Sellers
Home pricing and good condition remain crucial ingredients to ensure a smooth sale. If done properly, expect to get close to your original list price and go under contract in under 3 weeks.
Advice to Buyers
For the home shopper, the mortgage interest rates are lower than a month ago. Rates around 7.5% is the new norm. Most agree that Northern Virginia has a very strong real estate market grounded in its proximity to Washington DC, solid job market, great schools, and endless amenities. This means that home owners will see financial gains the longer they own a home in the area.
Bottom Line
The market update for November 2023 is all about STRONG and STEADY. This is our new normal. We’re here to help you decide on what is best for you.
More and more homeowners are thinking about renting out their homes. This could include parts of their homes or even buying an investment property. More than likely, they’ve heard that it’s a great way to make passive income and build generational wealth. And this is very true. If you have thought about investing in real estate, it’s important that you know as much as possible before getting started. There are so many factors such as financial stability and an interest in real estate. The question is: have YOU been bitten by the real estate investment bug?
CHARACTERISTICS OF REAL ESTATE INVESTORS
A great real estate investor should have most of these characteristics before getting started.
Financial Stability:
Individuals with a stable financial situation. This includes a reliable source of income and a good credit score. These are well-suited for investment property ownership. If this is you, congratulations.
Cash Reserves:
It’s important you have sufficient cash reserves. You will need this for down payments, property maintenance, mortgage payments even when property is vacant. The need for repairs are another issue to consider. This is essential for property investment.
Long-Term Investment:
You should plan to hold the property for an extended period, usually five years or more. This will likely benefit you with solid gains in real estate appreciation and rental income.
Knowledge of Real Estate Market:
You should have a good understanding of the local real estate market, including trends, property values, and rental demand. My Northern Virginia Market Update for October 2023 gives you an example. This type of information is crucial to your success.
Risk Tolerance:
Real estate investments carry some level of risk. You should be comfortable with potential market fluctuations and property management challenges. This includes a lower than normal demand for rental homes and tenants who are delinquent in making payments.
Property Management Skills or Support:
You should decide if you will be a landlord or pass the responsibilities on to a property manager. Those who are willing and capable of managing the property themselves is great. If not, you should have access to professional property management services are well-positioned.
Interest in Real Estate:
It’s also important you have a genuine interest in real estate and a willingness to learn about the industry. This is an important attribute of an investor.
There is no reason to begin the journey of becoming a landlord on your own. So if you’ve been bitten by the real estate investment bug, consider finding and reaching out to your trusted team members in the following areas:
Financial Planner
They will work with you to discuss your plans and assist you in crunching to numbers to make sure you are financially prepared to become an investor.
Certified Public Accountant
These professionals will be able to guide you on how to account for the costs of investments and save as much as possible come tax time.
Real Estate Professionals
These advisors will help you find the best home to meet your budget. The old adage is “Make Profit in the Purchase”. With the right help, you can negotiate a fair price for your investments property.
Property Management Company
If you prefer to not work as a landlord full time, management companies are great. They assist with communicating with tenants and address repair issues. These services cost on average between 8-10%.
BOTTOM LINE:
Are you still excited at the prospects of buying an investment property? If so, you have probably been bitten by the real estate investment bug. Additionally, it’s important to note that real estate investment is not one-size-fits-all. There are different types of investments and different circumstances to consider. Before investing in an investment property, it’s advisable to consult with the right advisors. Also, you’ll want to conduct thorough research to ensure the investment aligns with your financial objectives, risk tolerance, and resources. I’m here to help get you started. With years of experience and a slew of investor clients, I’m happy to help you on this journey.
NOTE: This article is not to be construed as legal advice. This is the opinion of the Author and has not been vetted by a lawyer.
The current real estate market in Northern Virginia appears to be the new normal. Inventory levels match the 5-year averages. Home prices are leveling off. Additionally, the average sold price to list price is just at 100%. The latest Federal Reserve announcement also suggests that we should get used to higher interest rates for the next few years. They are waiting for inflation levels to go down to the desired 2% level. Here is the full breakdown of the market update for October 2023.
Statistics and What it Means
Using statistics from MarketStats by ShowingTime, we looked at 10 counties in Northern Virginia – Alexandria, Arlington, Fairfax, Falls Church, Fauquier, Loudoun, Manassas City, Manassas Park City, and Prince William. Here are the highlights for Northern Virginia in general, Prince William, and Loudoun counties.
The median sale price for a home in Northern Virginia is now $620,000, which is down about 5% from last month ($651,000) and up 6% from this time last year when the median sold price was $585,000.
At the end of September 2023, there were 2,024 homes sold. This is down a whopping 22% from the previous month and down 23% from last year. The number of Days on Market for Northern Virginia is now 17 days, up 1 day from the previous month and down from 5 days this time last year.
Inventory Levels
Inventory levels seem to be the new normal. There are 2,840 homes for sale, which is a 8% increase from the previous month but down 40% from this time last year. Month’s Supply is another factor to consider. This refers to how many months it will take to sell all the current homes currently on the market. Most consider a balanced market, where buyers and sellers are on the same playing field, to be about 3-6 months supply. Currently, Northern Virginia has a month’s supply of homes for sale of 1.2; this is the same as the 5-year average. These numbers appear to be the new normal.
Many home owners are hesitant to sell their homes. They are unwilling to give up their 2-3% mortgage interest rates to buy another home at 7%, no matter the profit margin. So for now it seems that only those who must sell at this time are doing so.
According to Bright MLS Home Demand Index, buyer demand in the Washington Metro Area (which includes Northern Virginia) remains “Slow”, the same as the previous month. The Bright MLS | T3 Home Demand Index measures and tracks consumer and real estate professional behavior related to shopping for real estate. They look at metrics such as views of homes online and in-person showings. Ratings are categorized into 5 score points: Limited (under 70 points), Slow (70-89), Steady (90-109), Moderate (110-129), and High demand (over 130).
This month. the highest ranking areas in Northern Virginia are: MODERATE DEMAND in Arlington (126) and Alexandria (119); STEADY in Manassas City (100) and Prince William County (91); and SLOW in Fairfax (73). Loudoun County buyer demand was recorded as LIMITED (59).
What the Experts are Seeing
The good news of the market update for October 2023 is that home prices seem to be leveling off. The days of rapid 20% price increases appear to be a thing of the past. When correctly priced, homes continue to sell for what sellers are asking. Multiple offers are no longer the norm. There are exceptions, however. When proper pricing and excellent condition meet, multiple offers do happen.
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Mortgage Interest Rates
This is the new normal for now. The annual percentage rate on 30-year conventional mortgages hovers around 7.7%. This is 6 basis points lower from the previous week and also up 78 basis points from last year. The latest Consumer Price Index figures (used to measure inflation) were announced in June to be at 3%. This percentage shows change over time in the prices for a basket of consumer goods. The Federal Reserve has stated that they want to see the inflation figure down to 2%. The next Consumer Price Index report announcement is October 12, 2023 and the next Federal Reserve announcement is set for November 1, 2023.
Advice to Sellers
Home pricing and good condition remain crucial ingredients to ensure a smooth sale. For those not needing to buy another home right away or who are downsizing, this is a great time to sell their home.
Advice to Buyers
For the home shopper, the mortgage interest rate around 7.8%. This is the new norm. Most agree that Northern Virginia has a very strong real estate market grounded in its proximity to Washington DC, solid job market, great schools, and endless amenities. This means that home owners will see financial gains the longer they own a home in the area. This means securing you home now and then waiting to refinance once rate fall again. As a reminder, those who own their home have a median net worth 40 times that of renters.
The market update for October 2023 is all about stabilizing this Fall. This is our new normal. No matter how many reports we read, no matter how may experts we listen to, there is NO crystal ball as to EXTACTLY what happens next in the housing market. What we DO know is that everyone’s situation is different. Some may be living in a home that is too large and requires too much maintenance. Others may want want to buy their first home and begin to build wealth. Regardless of your needs, it’s important to know that we are here to give you up-to-date and accurate information ALWAYS. We’re here to help you decide on what is best for you.
Fewer than one in five Americans live in rural areas, whoever, over half of Americans say they would prefer to live in the country. This is according to a recent poll. And Northern Virginia is no exception. Factors such as lower property prices, larger living spaces, and a quieter lifestyle attract individuals and families wanting a simpler, more “wholesome” environment. However, it’s important to note that this trend may vary depending on various economic, social, and personal factors. Here are some reasons this phenomena is trending upward and why many are looking for country living in Northern Virginia.
BACKGROUND – CURRENT HOUSING MARKET CONDITIONS
To understand the reasons people want to move out to the country, it’s important to understand the current real estate market. As we outlined in our August 2023 Market Update, housing is marked by high interest rates and low inventory. Those wanting to buy a home are either renting or own a home that no longer meets their needs. Some may need to downsize as they become empty nesters or are going through some other life change. Others may need more space for a growing family of children or aging parents. With interest rates higher than last year’s, home buyers realize they may not be able to afford the home they could have afforded before.
WORK FROM HOME OPTION
One major reason people are thinking more about moving out to the country is the ability to work from anywhere. The pandemic made remote work a realty for many who never had that opportunity before. In Northern Virginia, with so many technology companies, a great proportion of the population were already doing this. Still, while many employers are asking their workers to return to the office setting, there are also some employers who see the benefit of having more of their staff work from home.
The Wall Street journal article comments, that companies that “allow at least one work-from-home day each week are higher in the Northeast. They appear to be fading across much of the South, Midwest and parts of the West.” It makes sense that for many in Northern Virginia, where tech jobs are in demand, there is less of a need to live close to where you work. This opens up areas where buyers can start looking. This means moving away from high concentration areas closer to Washington DC like Arlington and Alexandria and looking out west to Loudoun and Fauquier counties.
MORE HOME FOR MONEY
Affordability is another major issue people are looking to live in more rural areas. With interest rates closer to 7%, home buyers cannot afford as much as they could have last year this time. Pair this with home prices in Northern Virginia going up year over year and it’s easy to understand the dilemma.
As an example, based on today’s interest rates, a person wanting to keep the monthly mortgage payments under $3,000 could afford a home for about $484,000. When compared to the median sale price for Northern Virginia at $650,000, it explains the dilemma for many. To stay in a larger city, this means considering condos and small townhomes. The option is to continue renting until a salary increases or looking where you can get more home for your money.
To remedy this, many home buyers are now looking in counties where home prices are closer to what they can afford. This usually means they will look further away from large metropolitan areas like Washington, DC. Homes tend to be larger and you can get more land as well.
CHANGE IN LIFESTYLE
Another reason homebuyers are looking further out for homes is a significant change in lifestyle. As we all transition through different stages of our lives, the peace and tranquility promised by country living lures many away. A growing family may want more safety and wholesome living for their little ones. Empty nesters closer to retirement may want a more quiet and less fast paced setting. Others may be looking at a more modest frugal lifestyle and no longer have the desire to be in high cost areas. Whatever the reason, moving out to more rural areas offers more opportunities for starting fresh.
Country Living in Northern Virginia offers more open space, quiet, and a more natural setting to live in. People tend to feel more connected to nature than when living in more urban settings. Home buyers enjoy more home and land for their money and a more laid back lifestyle. While not for everyone, it does have an undeniable appeal.
The real estate market this summer has been a waiting game. Home sellers are waiting for mortgage interest rates to come down so they can justify moving; buyers are waiting for more homes to come on the market so they can achieve their dreams of home ownership; mortgage lenders are waiting for the Federal Reserve to stop raising the rates; and real estate agents are waiting for a busier fall season. Here is the market update for Septembr 2023.
Statistics and What it Means
Using statistics from MarketStats by ShowingTime, we looked at 10 counties in Northern Virginia – Alexandria, Arlington, Fairfax, Falls Church, Fauquier, Loudoun, Manassas City, Manassas Park City, and Prince William. Here are the highlights for Northern Virginia in general, Prince William, and Loudoun counties.
The median sale price for a home in Northern Virginia is now $651,000, which is about the same it was the month before (at $650,000). This is up 9% from this time last year.
At the end of August 2023, there were 2,640 homes sold. This is up 6% from the previous month and down 15% from last year. The number of Days on Market for Northern Virginia is now 16 days, up 3 days from the previous month and down from 19 days this time last year.
Inventory continues to be low with many home owners hesitant to sell their homes with no place to go. They are unwilling to give up their 3% mortgage interest rate to buy at 7%, no matter the profit margin. Still inventory appears to be improving. There are 2,640 homes for sale, which is a 6% increase from the previous month but down a whopping 42% from this time last year.
According to Bright MLS Home Demand Index, buyer demand in the Washington Metro Area (which includes Northern Virginia) remains “Slow”, the same as the previous month. The Bright MLS | T3 Home Demand Index measures and tracks consumer and real estate professional behavior related to shopping for real estate by looking at metrics such as views of homes online and in-person showings. Ratings are categorized into 5 score points: Limited (under 70 points), Slow (70-89), Steady (90-109), Moderate (110-129), and High demand (over 130).
This month. the highest ranking areas in Northern Virginia are: MODERATE DEMAND in Arlington (126), Alexandria (119), STEADY in Prince William County (103), Manassas City (100), and SLOW in Stafford County (81). Loudoun County buyer demand was recorded as LIMITED (59).
What the Experts are Seeing
The good news in this Market Update for September 2023 is that home prices seem to be remaining constant though interest rates remain elevated. The Month’s Supply of inventory of homes has gone from 0.97 from 1. Month’s Supply refers to how many months it will take to sell all the current homes currently on the market. Most consider a balanced market, where buyers and sellers are on the same playing field, to be about 3-6 months supply.
This is the new normal for now. The annual percentage rate on 30-year conventional mortgages hovers around 7.3%. This is 3 basis points higher from the previous week and also up 172 basis points from last year. The latest Consumer Price Index figures (used to measure inflation) were announced in June to be at 3%. This percentage shows change over time in the prices for a basket of consumer goods. The Federal Reserve has stated that they want to see the inflation figure down to 2%. Being just 1% off of the target is good news for everyone. Many experts are hopeful that the inflation rate of 2% will be achieved soon. When this happens, the Federal Reserve can then halt raising the central bank’s rates. This will result in lower interest rates for everyone.
Advice to Sellers
Homeowners are still enjoying low available inventory/competition, which helps them get above asking prices on the sale of their homes. It’s seems this will stay the same for now. Home pricing and good condition remain crucial ingredients to ensure a smooth sale. It also appears inventory levels are beginning to increase. Still, the real estate market remains as strong as ever.
Advice to Buyers
For the home shopper, the mortgage interest rate around 7.4% is the new norm. Most agree that Northern Virginia has a very strong real estate market grounded in its proximity to Washington DC, a strong market, great schools, and endless amenities. This means that home owners will see financial gains the longer they own a home in the area. As a reminder, those who own their home have a median net worth 40 times that of renters.
The real estate market this summer has been a waiting game. Home sellers are waiting for mortgage interest rates to come down so they can justify moving; buyers are waiting for more homes to come on the market so they can achieve their dreams of home ownership; mortgage lenders are waiting for the Federal Reserve to stop raising the rates; and real estate agents are waiting for a busier fall season. Here is the market update for August 2023.
Statistics and What it Means
Using statistics from MarketStats by ShowingTime, we looked at 10 counties in Northern Virginia – Alexandria, Arlington, Fairfax, Falls Church, Fauquier, Loudoun, Manassas City, Manassas Park City, and Prince William. Here are the highlights for Northern Virginia in general, Prince William, and Loudoun counties.
The median sale price for a home in Northern Virginia is now $650,000, which is down 2% from the previous month and up 5% from last year. This may be the result of measures taken by the Federal Reserve to curb inflation. In our July market update announcement, we shared their warning as they “would be prepared to adjust the stance of monetary policy as appropriate if risks emerge”.
At the end of July 2023, there were 2,454 homes sold. This is down 22% from the previous month and down 22% from last year. The number of Days on Market for Northern Virginia remains the same at 13 days.
Inventory continues to be low with many home owners hesitant to sell their homes with no place to go. They are unwilling to give up their 2.5% mortgage interest rate to buy at 7%, no matter the profit margin. Still inventory appears to be improving. There are 2,488 homes for sale, which is a 8% decrease from the previous month.
Bright MLS Buyer Demand Index
According to Bright MLS Home Demand Index, buyer demand in Northern Virginia remains “Slow”, the same as the previous month. The Bright MLS | T3 Home Demand Index measures and tracks consumer and real estate professional behavior related to shopping for real estate by looking at metrics such as views of homes online and in-person showings. Ratings are categorized into 5 score points: Limited (under 70 points), Slow (70-89), Steady (90-109), Moderate (110-129), and High demand (over 130).
This month. the highest ranking areas in Northern Virginia are: HIGH DEMAND in Manassas City (141), MODERATE DEMAND in Arrington (126), Alexandria City (119), STEADY in Prince William County (108) and Stafford County (92).
Most agents agree that pricing homes correctly is important these days. Homeowners whose homes are in great condition and priced well often receive multiple offers, settle over asking price and in shorter number of days.
Inventory remains extremely low at this time. Once a home shows well and is priced at market value, serious buyers are compelled to compete for the home. This means offering above asking price and waiving contingencies like a home inspection, if needed. This may be needed to ensure an offer is accepted.
The Month’s Supply of inventory of homes has gone from 1.2 to 1. Month’s Supply refers to how many months it will take to sell all the current homes currently on the market. Most consider a balanced market, where buyers and sellers are on the same playing field, to be about 3-6 months supply. It illustrates just how low inventory is for this market update in July 2023.
Mortgage Interest Rates
This is the new normal for now. The annual percentage rate on 30-year conventional mortgages hovers around 7.4%. This is 3 basis points higher from the previous week and also up 172 basis points from last year. The latest Consumer Price Index figures (used to measure inflation) were announced in June to be at 3%. This percentage shows change over time in the prices for a basket of consumer goods. The Federal Reserve has stated that they want to see the inflation figure down to 2%. Being just 1% off of the target is good news for everyone. Many experts are hopeful that the inflation rate of 2% will be achieved soon. When this happens, the Federal Reserve can then halt raising the central bank’s rates. This will result in lower interest rates for everyone.
Advice to Sellers
Homeowners are still enjoying low available inventory/competition, which helps them get above asking prices on the sale of their homes. It’s seems this will stay the same for now. Home pricing and good condition remain crucial ingredients to ensure a smooth sale. It also appears inventory levels are beginning to increase. Still, the real estate market remains as strong as ever. Northern Virginia is NOT about to CRASH, as some are speculating. The area remains a great place to live and own a home and home prices keep going up each year.
For the home shopper, the mortgage interest rate around 7.2% is the new norm. Most agree that Northern Virginia has a very strong real estate market grounded in its proximity to Washington DC, a strong market, great schools, and endless amenities. This means that home owners will see financial gains the longer they own a home in the area. As a reminder, those who own their home have a median net worth 40 times that of renters.
Bottom Line
It appears the Summer market is more comparable to pre-pandemic times. We’re remain optimistic in this waiting game to see what happens next in the Northern Virginia real estate market.
A great real estate agent is a valuable member of your team of experts that can help you throughout your lifetime. They can assist in home sales, finding new homes and rentals, estimate the value of your home for a refinance, and the list goes on. Ever wandered how to choose your real estate agent? There are so many things to consider when choosing a true professional. Here are some signs of a great real estate agent.
THE ROLE OF A PROFESSIONAL REAL ESTATE AGENT
The most important role your real estate agent has is to provide you with representation. Representation refers to the relationship between a real estate agent and a client, where the agent acts as a representative or advocate for the client in buying, selling, or renting properties. This takes place officially when there is a signed agreement between an agent and a client but oftentimes occurs without one.
The agent’s goal is to protect and promote the client’s best interests while ensuring a smooth and successful real estate transaction. The agent’s role is to provide guidance, expertise, and support throughout the real estate transaction process – before, during, and after. This includes providing Confidentiality, Problem Solving, and Putting Clients’ Best Interest First. Here are the skills a true professional possesses:
KNOWLEDGE AND CONTINUOUS EDUCATION
A real estate professional takes a great deal of time in continuing education to ensure they represent their client in the most effective manner. In home selling, this means everything from knowing the current real estate market, to reading books, to staying on top of local news and developments.
Additionally, agents can pursue continuous education through various avenues to stay updated on industry trends, regulations, and best practices. One common method is by attending professional development courses and workshops offered by real estate associations, such as the National Association of Realtors (NAR) or local real estate boards. These courses cover a wide range of topics, including legal updates, marketing strategies, technology advancements, and ethical practices.
Agents can also take advantage of online platforms that offer real estate education and certification programs. These platforms provide flexibility in terms of timing and location, allowing agents to learn at their own pace. Additionally, agents can participate in webinars, podcasts, and virtual conferences that offer insights from industry experts and thought leaders. Furthermore, agents can seek mentorship or coaching from experienced professionals in the field. This provides an opportunity to learn from their expertise and gain practical knowledge.
By actively pursuing continuous education, agents can enhance their skills, stay informed about industry changes, and provide better service to their clients.
INDUSTRY, COMMUNITY AND CLIENT INVOLVMENT
Great realtors stay involved in industry affairs, in the community, and with their clients. Realtors stay involved in industry affairs through various means. They often join professional associations such as the National Association of Realtors (NAR) or local real estate boards. This provide opportunities for networking, continuing education, and staying updated on industry trends and regulations. Realtors also attend conferences, seminars, and workshops to enhance their knowledge and skills. Additionally, they may participate in online forums, webinars, and social media groups dedicated to real estate discussions. By actively engaging in these activities, realtors can stay informed. They monitor market changes, policy updates, and best practices, enabling them to better serve their clients and stay competitive.
Realtors stay involved in the community by actively participating in local events and initiatives. They often join community organizations, such as chambers of commerce or neighborhood associations, to connect with residents and businesses. Realtors may volunteer their time and expertise for community projects, such as organizing fundraisers, participating in charity events, or serving on local committees. They also engage in community outreach by hosting educational seminars or workshops. By being visible and involved in the community, realtors build relationships, establish trust, and demonstrate their commitment to neighborhoods.
Realtors stay involved with clients throughout a transaction by maintaining open and effective communication. They provide regular updates on the progress of the transaction, including any new developments or changes. Realtors also ensure that clients understand the various steps involved in the process, addressing any questions or concerns they may have. They coordinate and schedule necessary inspections, appraisals, and other appointments, keeping clients informed of the dates and times. Additionally, realtors assist in negotiating offers, counteroffers, and contract terms on behalf of their clients. They guide clients through the paperwork and documentation required for the transaction, ensuring accuracy and compliance. By staying actively involved and accessible, realtors provide support and guidance to clients, helping them navigate the complexities of the transaction smoothly.
CONFIDENCE AND CONVICTION
Great real estate agents with knowledge, experience, and involvement develop the confidence and conviction to truly represent their clients as they are meant to. This means putting the needs of their clients first and foremost in their jobs. It is important for a real estate agent to put their clients’ needs first because it establishes trust, fosters strong relationships, and ultimately leads to client satisfaction. Real estate transactions are significant financial and emotional investments for clients, and they rely on their agent to guide them through the process.
By prioritizing clients’ needs, real estate agents demonstrate their commitment to serving their best interests. This includes actively listening to clients, understanding their goals and preferences, and tailoring their services accordingly. Putting clients first also involves providing honest and transparent advice, even if it means advising against a particular property or course of action. By acting in the clients’ best interests, real estate agents build a reputation for professionalism and integrity, leading to referrals and repeat business. Ultimately, the success of a real estate agent is closely tied to the satisfaction and success of their clients.
BOTTOM LINE
Clients with experience, knowledge, involvement, confidence and conviction are best able to provide best representation of their clients through each transaction and oftentimes, throughout a lifetime. This is what professional real estate agents are made of.
As the weather heats up and we experience longer days, it seems we become more active in all areas of our lives. The housing market is no different. The full month of June saw an increase in the number of homes sold and the number of homes on the market for sale. The latest real estate statistics for Northern Virginia are showing signs of an early Spring market being pushed into our summer months. Here is the market update for July 2023.
Statistics and What it Means
Using statistics from MarketStats by ShowingTime, we looked at 10 counties in Northern Virginia – Alexandria, Arlington, Fairfax, Falls Church, Fauquier, Loudoun, Manassas City, Manassas Park City, and Prince William.
The median sale price for a home in Northern Virginia is now $663,000, which is down 1% from the previous month and up 4% from last year. This may be the result of measures taken by the Federal Reserve to curb inflation. In their June announcement, they did not increase their key interest rate but warned they “would be prepared to adjust the stance of monetary policy as appropriate if risks emerge”. This ensured that interest rates stayed between 6.5 to over 7%.
At the end of June 2023, there were 3,158 homes sold in that month. This is up 5% from the previous month and down 18% from last year. The number of Days on Market for Northern Virginia remains the same at 13 days.
Inventory continues to be low with many home owners hesitant to sell their homes with no place to go. They are unwilling to give up their 2.5% mortgage interest rate to buy at 6.5%, no matter the profit margin. Still inventory appears to be improving. There are 2,676 homes for sale, which is a 9% increase from the previous month.
Bright MLS Buyer Demand Index
According to Bright MLS Home Demand Index, buyer demand in Northern Virginia remains “Slow”, down from “Steady” buyer demand the month before. The Bright MLS | T3 Home Demand Index measures and tracks consumer and real estate professional behavior related to shopping for real estate by looking at metrics such as views of homes online and in-person showings. Ratings are categorized into 5 score points: Limited (under 70 points), Slow (70-89), Steady (90-109), Moderate (110-129), and High demand (over 130).
The highest ranking areas in Northern Virginia are: MODERATE DEMAND in Arlington (126), Alexandria (119), Prince William County (115), Manassas City (110), and STEADY DEMAND in Stafford County (102).
What the Experts are Seeing
Most agents agree that pricing and condition have become extremely important in this current market. Homes priced well and in excellent condition are going under contract quickly, over-asking price, and with few contingencies. This is because inventory is so low at this time. Once a home shows well and is priced at market value, serious buyers are compelled to compete for the home. This means offering above asking price and waiving contingencies like a home inspection. This may be needed to ensure an offer is accepted.
The Month’s Supply of inventory of homes has gone from 0.8 to 1.2 in June 2023. Month’s Supply refers to how many months it will take to sell all the current homes currently on the market. Most consider a balanced market, where buyers and sellers are on the same playing field, to be about 3-6 months supply. Though improving, it illustrates just how low inventory is for this market update in July 2023.
Mortgage Interest Rates
Source: NerdWallet.com
This is the new normal for now. The annual percentage rate on 30-year conventional mortgages hovers around 6.8%. This is 17 basis points lower from the previous week and also up 130 basis points from last year. The latest Consumer Price Index figures (used to measure inflation) were announced in June to be at 3%. This percentage shows change over time in the prices for a basket of consumer goods. The Federal Reserve has stated that they want to see the inflation figure down to 2%. Being just 1% off of the target is good news for everyone. Many experts are hopeful that the inflation rate of 2% will be achieved soon. When this happens, the Federal Reserve can then halt raising the central bank’s rates. This will result in lower interest rates for everyone.
Advice to Sellers
Homeowners are still enjoying low available inventory/competition, which helps them get above asking prices on the sale of their homes. It’s not sure how long this will last. Home pricing and good condition remain crucial ingredients to ensure a smooth sale. It also appears inventory levels are beginning to increase. Still, the real estate market remains as strong as ever. Northern Virginia is NOT about to CRASH, as some are speculating. The area remains a great place to live and own a home.
For the home shopper, the mortgage interest rate around 6.5% is the new norm. Most agree that Northern Virginia has a very strong real estate market grounded in its proximity to Washington DC, great schools, and endless amenities. This means that home owners will see financial gains the longer they own a home in the area. As a reminder, those who own their home have a median net worth 40 times that of renters.
Bottom Line
It appears the Spring market was delayed and now just beginning. We’re optimistic this energy will continue into the fall and make for an active Northern Virginia real estate market.
5 IMPORTANT STEPS AFTER YOUR HOME GOES UNDER CONTRACT
For a home seller, there’s no better feeling than having your home go under contract quickly and at the price you wanted. It’s important to know that this is an important time to stay vigilant and maintain realistic expectations. After your house goes under contract, a Realtor typically assists with various tasks to facilitate the closing process. This may include coordinating with the buyer’s agent, ensuring all necessary documents are submitted, scheduling and negotiating inspections, and providing guidance and support until closing is finalized. After your home goes under contract, the real work of an experienced real estate agent begins.
1. Send HOA/CONDO Documents to Purchasers
One of the first responsibilities of an agent is to ensure that Home Owners Association (HOA) and Condominium (CONDO) Resale Packages are delivered to the prospective buyer as soon as possible. In Virginia, the Virginia Property Owners’ Association Act allows for a Buyer to cancel the contract “within 3 days, or up to 7 days if extended by the ratified real estate contract”. This allows the purchaser time to fully review important information about the rules, regulations, fees, and restrictions imposed by an HOA and/or CONDO.
By delivering these documents earlier rather than later, the Realtor ensures that the buyer has access to all relevant information about the property right away. These packets contain information such as: Governing Documents, Financial Information, Meeting Minutes, Insurance Information, and Resale Certification. If a buyer chooses to cancel the contract after 3 days, it allows the agent to immediately put the home back on the market while marketing is still fresh.
An earnest money deposit (EMD), also known as a good faith deposit, is a sum of money provided by a buyer to demonstrate their serious intent to purchase a property. It is typically given to the seller via a title company upon the acceptance of an offer. The purpose of the earnest money deposit is to show the seller that the buyer is committed to the transaction and to provide some financial security in case the buyer fails to fulfill their obligations under the contract.
The amount of the earnest money deposit is negotiable and can vary depending on factors such as the local real estate market, the purchase price of the property, and any specific terms agreed upon by the parties involved. The deposit is typically held in an escrow account until the closing of the transaction, at which point it is applied towards the buyer’s settlement costs.
If the buyer successfully completes the purchase, the earnest money deposit is typically credited towards the cost of settlement for the buyer. However, if the buyer fails to fulfill their obligations as outlined in the contract, the seller may be entitled to keep the full or partial amount of the earnest money deposit as compensation for the time and effort lost during the transaction.
3. Inspections
The listing agent can help the seller prepare for the inspection by providing guidance on what to expect and how to make the property presentable. Before a home is put on the market for sale, an agent will offer suggestions on repairs or improvements that could enhance the home’s condition and appeal. These will help to make the home inspection process go more smoothly. In more remote or larger parcels of land, well and septic inspections are also the norm.
In addition to coordinating the date of the home inspection with a homeowner and a purchaser’s agent, the Realtor may also facilitate access to the home and/or property. During the inspection process, the agent will make themselves available to answer any and all questions from the home inspector and buyer’s agent. They also ensure that all areas are accessible and any necessary utilities are turned on. They will also keep the homeowner up to date on everything that is going on.
If the inspection reveals any issues or deficiencies, the listing agent can help the seller navigate the negotiation process with the buyer. They can provide guidance on how to respond to repair requests or negotiate any necessary adjustments to the sale price. Overall, the listing agent acts as a liaison between the seller and the home inspector and the buyer’s agent, providing support and guidance throughout the inspection process.
4. Appraisal
The listing agent can play a significant role in the appraisal process by providing relevant information and supporting documentation to the appraiser. Here are some ways in which a listing agent can assist:
a. Accompanying the appraiser during the inspection: The listing agent can be present during the appraisal inspection to answer any questions the appraiser may have and provide additional information about the property.
b. Providing property details: The listing agent can provide the appraiser with accurate and detailed information about the property, including its features, upgrades, and recent improvements. This helps the appraiser understand the unique aspects of the property.
c. Presenting a comprehensive listing package: The listing agent can prepare a comprehensive package that includes relevant documents such as floor plans, property surveys, and any recent appraisals or inspections. This package provides the appraiser with a complete picture of the property.
d. Sharing comparable sales: The listing agent can provide the appraiser with recent comparable sales in the area that support the listing price. These comparable properties help the appraiser assess the market value of the property being appraised. It also helps to ensure the appraisal amount is as close to full sale price as possible.
It’s important to note that while a listing agent can provide assistance, the appraiser is an independent professional who ultimately determines the appraised value based on their own analysis and methodology.
5. Communicate with Buyer’s Lender
An experienced real estate agent is skilled in communicating with a slew of professionals throughout the transaction process. The purchaser’s lender is no exception. The agent provides the lender with all necessary documents such as disclosures, property information, etc. If the buyer’s lender has any questions or requests for additional information, the listing agent can promptly respond and provide the necessary details to keep the transaction on track.
The listing agent can help ensure that any lender-required repairs or conditions are addressed promptly, working with the seller to meet these requirements within the specified timeframes. One of the most important roles a real estate professional plays in the closing process is to ensure the completion of all requirements and that deadlines are met.
It’s important to note that while a listing agent can assist with communication between the buyer’s lender and the seller, they cannot provide financial or legal advice. Buyers and sellers should consult with their respective professionals for guidance on specific financial and legal matters.
Bottom Line
A real estate professional provides many crucial roles in the real estate settlement process, from start to finish. A Realtor’s presence is most valuable when something does not go as planned. Having a trained and experienced real estate professional to gauge situations, plan in advance to avoid unnecessary delays, and negotiate on behalf of their clients, is ABSOLUTELY VITAL.
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