November Northern Virginia Market Update
As we enter the shift from fall to winter, we're all wondering if the market will bring us stability or change. It's tough to tell right now, as we are on a real estate market roller coaster, not only in Northern Virginia but the rest of the United States. Soaring interest rates and inflation, declining house sales and buyer demand, plus the overall negativity about the economy have put us off (number wise) when we compare this market to last year and 2020. We should stop comparing today’s real estate market to 2021 and 2020. Those years were outliers, and I can explain why.
It all began with the pandemic, which resulted in historically low interest rates, remote working conditions, lack of inventory and then resulted in irrational exuberance when it came to making offers. On top of that, the overall mindset about the future contributed to the unique situation we were all in. Taking all of this into consideration, we really should be benchmarking against pre-Covid times and post Great Recession times instead of the pandemic years. If we do this, we're having very comparable years regarding yearly sales, months supply of homes, and weekly absorption rates, which means we should end up with a historically good year.
The biggest differences are inventory and number of weekly sales. Inventory is down 22% from 2019, down 45% from 2018. At the same time, weekly sales are down 40% from 2019 and 39% from 2018. People seem to remember what their neighbor’s sale was like last year, or even earlier this year, and not what happened when they sold in 2015. Our perspective when selling a home today should change to a more realistic approach to the market we are currently in.
So, what’s the moral of the story? If you are a seller, get your house in the right condition to sell, price it right, be patient, and wait for it to sell. You also have the option to sell later. If you are a buyer and you are ready to buy, then buy - don’t wait! If the house fits your needs and lifestyle, make the move. In most cases, you can negotiate and get a home on your terms. When the economy shifts and rates come down, refinance and then it becomes a win-win for you.
If you have any questions at all, feel free to reach out to me. I am always here to help you.
Have a great holiday season with your family and friends!