Myths about our Market

It is amazing what you hear on the news, around the water cooler at work, at the school bus stop, at neighborhood parties, at cocktail parties or any place else you hear people discussing real estate. The myths about now being a bad time to sell a house, wait to buy because prices are going to drop further, rates are going to get lower, and the market is slow are over exaggerated and incorrect.

As long as you didn’t buy from late 2004 to 2007 and you didn’t obtain a “cash out” refinance and over leverage yourself, now is a great time to shift your equity and move up. Sure, prices are down in your neighborhood but so are prices in the neighborhoods you would most likely move. There has never been a better time than now to negotiate with builders, take advantage of foreclosures and short sales or make the move to the home of your dreams. Also, if you can “qualify” to carry the mortgage on your current home and new home – our advice is to keep your current house, rent it out (the rental market is hot!) and sell when the prices are higher again. The prices in our area will rebound, we just need to look at the fundamentals within our market and analyze the stats to know it will happen!

When people say that prices and rates are going to drop further – ask to see their crystal ball and all of their bank accounts with the commas in them to make sure they know what they are talking about. Let’s be honest, no one knows where prices are headed – for sure - but we can make very educated guesses based upon statistical data and the theory of supply and demand. We have the data to show that prices have stabilized in many areas and have increased in others over last year by analyzing our recent sold information through our MLS and availability to research tax records. Additionally, there are people looking to buy. In conversations with agents, they are seeing agents leaving houses with buyers when they are on their way in to show them to their clients, and agents coming in with their own clients when they are leaving. We also continue to see multiple contracts on homes that are priced right, show well and are in the right condition. Another critical stat to look at is inventory levels. Last year, inventory levels of resale homes in Northern Virginia were in excess of 16,000 and we had a 6.6 month supply of houses. This year, inventory levels are just above 9,450 and we have a 2.8 month supply of houses.

When analyzing interest rates – they dropped into the high 4’s then promptly increased into the mid 5’s. There are too many factors to consider when looking at rates dropping lower – unemployment rates, inflation, bond prices, the stock market, International economies, demand, etc. Again, ask to see the crystal ball and bank accounts of the people saying rates are coming down further. What we do know is that historically, mortgage rates are near all time lows. Don’t wait for what might not happen – buy now!

All in all, it looks like there is improvement in our market and things don’t appear to be slowing down – at all!