Inventory is still low and it remains a seller’s market. Compared to last year, less homes are being sold. Still, buyers are not doing the same. There are less showings, less offers, and more contingencies in contracts. The days of multiple offers, $100,000 over asking, and going under contract in a day seem to be trends of the past. Buyers report fear of higher interest rates, inflation, and soaring home prices. So while the month’s supply of home is low, average home prices continue to rise. Here is the latest Real Estate Market Update for May 2022.
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Statistics
Homes that Sold
The median sale price for a home in Northern Virginia is now $645,000, up from $615,000 at the end of March. This is a 10% increase from the same time last year and a 5% increase from the previous month.
By the end of April 2022, there were 3,645 homes sold. This is 15% less than last year’s figure BUT a 6% increase from March 2022 sales.
The average number of days it took to sell a home went up from 12 days to 9 days in April. This is 7 days less from last year and 3 days less than last month.
The median price per square foot for homes is now $301 per square foot. This is up 12% from last year and 2% from last month. The cost of homes continue to rise.
The total value of homes sold amounted to $2,539,171,510. This is down 8% from this time last year and up 7 % from last month.
Month’s Supply
The month’s supply for April is 0.7%. This is up from March’s figure of 0.58. This number shows how many months it would take to sell all the current homes now on the market. Most consider a balanced market, where buyers and sellers of homes are on the same playing field, to be about 3 months supply. This figure is significantly low especially for a Spring market but there seems to be good news on the horizon as more homes are coming on the market each week.
Mortgage Interest Rates
According to Nerd Wallet, mortgage interest rates on a 30 year conventional are at about 5.6%. This is as of May 31, 2022 and is up from 5% reported last month.
What Agents are Seeing
As the Spring market continues on, there are more and more homes on the market. Activity waned a bit in most locations as buyers tackled some bad weather, high mortgage rates, and higher priced homes. Still, the market is picking up and homes in sought after locations and in great condition are going under contract in just a few days. This trend is expected to continue as long as inventory stays low.
What Does This All Mean?
The data highlights the current lack of inventory. There are 16% less homes up for sale compared to this time last year. The good news is that it is also 10% more than last month’s inventory. It remains a sellers market and is projected to remain through Spring, at least. For now, Sellers still have the advantage while Buyers are finally seeing more options to choose from.
Bottom Line
The market is definitely changing as buyers are less likely to get into bidding wars on homes or waive all contingencies. It’ important to work with someone who has the information to prepare you for this unique and ever-changing housing market.
Will the Spring make our housing depression go away?
The housing market has seen extremely low inventory of homes for sale for the past 2 months. It seems like things are finally turning around and there are more homes on the market than the previous month. Home value is also still on the rise. Spring, it seems, will help to make the housing depression go away.
Here is March’s market update looking at the latest statistics from MarketStats by Showing Time. It includes a good hard look at the data, what agents are seeing, and what it all means to you.
Statistics
Homes that Sold in November
The average sale price for a home in Northern Virginia is $666,457. This is an 10% increase from the same time last year and almost a 2.8% increase from the previous month.
At the end of February 2022, there were 2,269 homes sold. This is over an 11% increase from last year and a whopping 16% increase from January sales.
The total value of homes sold amounted to $1,478,052,519. This is down 3.5% from last year and up 17% from the previous month.
The average number of days it took to sell a home went up from 28 days to 21 days. This is the same amount of time from last year and 25% less time than last month.
The average price per square foot went up about 4% – from $307 per square foot in January to $319 per square foot in February. This is also a 10% increase in value from last year.
Homes that Came on the Market
By the end of February, there were 1,308 homes up for sale. This 5% more than the previous month and 38% less than last year this time.
The month’s supply for February is now at 0.58. This is about the same as it was last month at 0.64. This figure represents how many months it would take to sell all the current homes now on the market. Most consider a balanced market, where buyers and sellers of homes are on the same playing field, to be about 3 months supply. This figure is significantly low but keep in mind that this time of year is traditionally slow. February 2021 months supply was .
Mortgage Interest Rates
According to Housing Wire, higher mortgage interest rates do affect the housing market. Some buyers, especially investors, will want to take advantage of the rates before they get even higher. Still, some buyers will no longer be able to afford to buy a new home if the rates become too high.
“The mortgage company Freddie Mac reports the 30-year-fixed rate averaged 3.85 percent last week. That’s up .11 percent from the week before.”, according to the abc23 website. The gradual increase in mortgage interest rates are now certain so buyers have limited time left to take advantage of locking in good rates.
What Agents are Seeing
While January and February are typically slow months in the real estate market, the good news is that activity is picking up. There are more homes coming on the market each day and buyers are still facing waiving contingencies and above asking prices. This is expected to last at least a few more months. There also seems to be an increase demand for rentals as those prices are rising as well.
What Does This All Mean?
The data highlights the current lack of inventory and an increase in the value of homes. It remains a sellers market and is projected to remain through Spring, at least. For now, Sellers still have the advantage and Buyers are still trying to take advantage of historically low mortgage rates.
Bottom Line
The Spring, it seems, will help to make the housing depression go away. While inventory is low, the market still favors the Sellers. The forecast is for more of the same through Spring 2022.
As we head into the end of the winter season, more and more real estate experts are commenting on the very low housing inventory around the country. The number of active listings is down 25% from last year. In Northern Virginia, the same seems to be holding true. On average, the area saw a 28% decrease in active listings from last year. There is most definitely low housing inventory in Northern Virginia.
STATISTICS
Looking at number of closed home sales by county using Bright MLS data, it shows some areas more affected than others. While Prince William and Fairfax counties saw closer to the national average in home sales, Loudoun county experienced a 54% decrease from January 2021 and Fauquier had only a 12% decrease.
WHY AREN’T HOME OWNERS SELLING?
One reason for the low housing inventory in Northern Virginia is that we are in the winter season. Traditionally, this has always been a slow time for real estate. Most people are just not making major moves during this time compared to summer months when the weather is better and kids are out on break.
Another reason is that those who have considered selling don’t think this is a good time to move. According to a recent survey by Realtor.com, 1 in 4 potential home sellers said they will not list their homes because they would have no where to move to. The market for buyers is that difficult. They are afraid of not being able to compete with buyers for existing homes. Realtor.com Chief Economist Danielle Hale said, “With housing costs rising, as home prices and mortgage rates both increase, affordability is more important than ever to households. Data suggests that this may be as true for sellers, many of whom will also purchase a new home, as it is for homebuyers.”
WHAT ARE BUYERS TO DO?
So with low inventory and high demand, buyers are still facing competition when submitting an offer on a home. Wanting to take advantage of low mortgage interest rates, buyers have three options: (1) be prepared to pay well over the asking price on homes and waive some contingencies, (2) wait to buy and risk high interest rates, or (3) consider sectors of the housing market like condos that are not going through the same jumps in price.
Some surveys suggest that homeowners will begin selling their home in the next 3-6 months. Until then, the market appears to remain in the seller’s advantage.
Selling your home can stir up a range of emotions. Many don’t realize when it’s happening to them. While you may feel excited about the opportunity to move into a new house and get a fresh start, you may also experience feelings of sadness or loss. Your reactions may surprise you. Stress is usually brought on by changes in routine and familiarity. According to the Zillow Group 2019 Consumer Housing Trends, 95% of home sellers are stressed by some aspect of the process. It is a big deal. The question is how to handle these strong powerful emotions at a time when you need to make big decisions for you and your family. Firstly, it’s important to remember that these feelings are natural. It’s also good to know that there are tools on how to cope during this time. I’ve been reading of articles and have put together a list of my favorites. Here are my 5 tips on how to handle your emotions when selling.
1. Concentrate on the Future
If emotions of selling overwhelm you, it’s important to remember WHY you’re selling your home. Whether you want to downsize to adjust to a new family life or upsize for a growing family, make sure you are ready. Create and write down a list of reasons to reassure you that you made the right decision. Do this early in the process and look over your notes when doubts start to creep in. By concentrating on the future, your will create positive feelings of what is to come after your home sale is final. If you already have a new home to look forward to, keep photos nearby and imagine all the new memories you will create. Also start planning projects you’d like to tackle or how you are going to decorate your new home.
Visualize your Future
2. Trust your Real Estate Agent
The right agent will make all the difference. Remember that they are being paid to take much of the hassle and burden off you. Allow them to do their job by paying attention to their advice to come up with the most suitable game plan for you.
Be sure to spend time going through the steps of selling a home and ask lots of questions. If repairs are needed to increase your sale price, get them done all at the same time to avoid more disruption to the family. Review how long each step will take and plan accordingly.
This also includes listing your home at the right price to get your home under contract as quickly as possible. There is no way to get around people touring your home so at least try to reduce this time but trusting your agent to do what is necessary to get your home sold fast.
If you have concerns, voice them to your agent. The right agent will help you to feel less anxious by maintaining a high level of communication throughout the process. Choosing the right agent early will help you through this difficult time. Take time to interview them and establish a good repertoire and feelings of trust.
3. Practice Self Care
During home sales, it’s normal that there will be disruption to normal schedules and routines. At the same time, i’s important to keep as many routines as you can. This will help you to handle stress better. Many may begin to skip workouts; others may start buying fast food more even before the packing up begins. Don’t fall into this trap. It will only hurt you in the long run. When going through major life changes, your health will become even more important. Eating a balanced diet and exercising will help to see your get through the move. Also use relaxation techniques such as breathing and listening to music during difficult times.
Take Time for YOU
As much as possible, keep as many routines as possible. If you usually take long walks at the end of the day, then continue. If you usually like curling up with a book on the weekends, then keep doing that too. It’s also worthwhile that as schedules change to make up for losses with a little pampering. Consider treating yourself to a long tub bath or a massage. Take breaks when you start to feel tense or go see a movie. These little perks are rewards for you handling such an overwhelming process so well. Set deadlines for getting things done and then do something nice for yourself. Remind yourself that this is a difficult time but “you’ve got this”.
4. Distance Yourself from the Process
Good agents will also advise you on “decluttering” your home. This is a part of getting ready for your sale and may include staging as well. To learn more, see my article on Getting Ready to Sell. The purpose is to have buyers tour your home and see themselves living there. As much as possible, they will not want reminders that this home belongs to someone else. Additionally, buyers often associate how a home shows with how well the house was maintained. Trust your agent when they ask you to put in the work of decluttering, removing personal items, and making changes to your home. While it may be difficult and there will be emotions when selling, it’s important to go through memorabilia of living there, the end result will be a “depersonalized” home. Once your personal photos and such are boxed up, it will be easier for you to get involved in the process and not be too emotional.
Call on Family and Friends
You should also plan to leave your home during showings to avoid making buyers feel uneasy or pressured. Sticking around the home will cause you more stress as you try to figure out what buyers are thinking or whether they are judging you. Plan to take drives or visit with friends. Have a plan of what you will do during the times you must leave the home.
Additionally, some homebuyers may say upsetting things about your home. You don’t need to get involved. Your agent will get feedback from the buyers and let you know if additional repairs or changes to your home need to be made. Also know that once you find a buyer, they may request repairs. There is no need to take this personally. This is all part of the negotiation process. Remember that the goal is to sell your home so you can move on to the next chapter in your life.
5. Establish Worse Case Scenarios
When you go through the steps of home selling, take time to establish worse case scenarios. Get an idea on what your net profit will be depending on different sale prices and plan accordingly. Establish a bottom line and also consider your options if you don’t get the amount you want. It’s best to think through these scenarios soon rather than later so the stress is not as great. The same holds true to closing dates and how long home repairs may take.
We all have emptions when selling. Don’t be afraid to ask for help from your realtor, your family, and your friends. This could mean getting friends to help you box up personal items or keep your company when you’re feeling overwhelmed. Once you’ve imagined the worse and come up with possible solutions, you realize what NOT a big deal it is. For example, if you need to buy a new home after going under contract on your current home, do all the research of renting or moving in with family beforehand. That way, if you can’t find a new home before closing, you have options ready to go.
Bottom Line
Selling a home is a stressful life event that starts when you are thinking of selling your home. It doesn’t end until after you have closed, have money in the bank and have moved out. During this time, it’s important to remember these tips on how to handle emotions when selling.
Mortgage interest rates have been rising consistently for the past 4 weeks. Some buyers are surprised how their estimated monthly payment rose so dramatically in just a week. While this increase will cause panic and a sense of urgency in some buyers, it will make others no longer able to afford to buy. Pair this with low inventory and sellers still have a major advantage. Using statistics from SmartCharts by Market Quest, I looked at figures for the end of December 2021. Here is your market update for January 2022, which was marked by these mortgage interest rates going up so fast. See how interest rates are affecting the housing market.
Statistics
Homes Sold in December
The average sale price for a home in Northern Virginia is 651. This is up 7% from last year and down 1% from last month
By the end of December 2021, 3,332 homes were sold in Northern Virginia. This is down 6% from last year and down 8.5% from last month.
The total value of homes sold amounted to $2,161,928,434, which is up 0.8% from last year and down 7% from last month’s volume.
The average days on market went to 24 days which is up from 20 days in December 2020 and up from 21 days last month.
The average price per square foot was $303/sq ft. This went up 8% from last year and 1% from last month.
Analysis
Month’s Supply
By all accounts December was another very quiet month in the housing market. Almost all the indicators went down, with month’s supply remaining about the same. Month’s supply went from 0.97 in October to 0.6 in November and then 0.59 in December. This follows the usual slow cycle of real estate with the busiest months being March – June and the slowest from November to January.
Mortgage Interest Rates
According to Forbes Advisor, “Today, the average rate on a 30-year fixed mortgage is 3.59%, according to Bankrate.com, while the average rate on a 15-year mortgage is 2.93%. On a 30-year jumbo mortgage, the average rate is 3.59%, and the average rate on a 5/1 ARM is 2.76%.” Mortgage interest rates are affecting the housing market.
There has been increases in the last 4 weeks, with rates going up a full half percent. And buyers are taking notice. Reuters reported “Overall loan application volumes rose 2.3% last week on the back of a 7.9% increase in loans to buy a home, while refinancing applications dropped 3.1% to their lowest level in more than two years”. This will increase buyer activity in the short term as time is running out to take advantage of the still historically low mortgage interest rates.
What Agents are Seeing
January seems to have started off with a “bang”. There were more homes coming on the market and buyers were out looking and putting in multiple offers at over the asking price. Once statistics for January come out, we’ll be able to confirm this. I felt the activity level felt more like a Spring market than a typical January. If you want to know what I saw, be sure to see the video in my blog “2022 Housing Forecast“.
What Does This All Mean?
The data shows a slow holiday season, more typical of pre-pandemic seasons. Still the value of homes continue to go up. Northern Virginia property values just keep going up. Though the rate of appreciation is slowing, it remains an excellent area to own a home.
Market Update Bottom Line
While inventory is low, the market update still favors the Sellers. The forecast for the market going into Spring 2022 is that inventory will remain low while buyers demand will slowly decrease due to rising mortgage interest rates.
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