5 House Hunting Tips for Buyers

Here are five tips to think about when you are looking at someones home for possible purchase:

1. Shhhh! - When touring a home refrain from discussing your reactions until you have left the house. While far from common it is possible that the seller is recording your comments with listening devices.  This could compromise your negotiating position and you wouldn't want to insult the owners by making fun of their home.
2. Social Media No-No's - Comments made inside sellers homes are not the only ones that could get back to the owners; buyers should think similarly about anything they say on social media sites. Buyers should also refrain from posting photos of the homes they've toured online (unless the seller has granted permission).
3. Amateur Inspections - Remember, you don't have to do a thorough inspection of the home while on tour, you should hire a home inspector to do that once an offer is accepted.
4. Online Research - Once you find a home you are interested in run a Google search of the address and review any information that comes up.  Also consider a Google or Bing map search and take a look at the satellite view so see what is around the property.
5. Door to Door Research - It can also be helpful to knock on neighbors doors and say "We're thinking about buying this house. What can you tell me about the home and the neighborhood?" (Plus, you'll get to meet potential neighbors.)

As always, if you or any of your friends are thinking about buying a home I am here to help.  Rates are low and its a great time to buy.

The Northern Virginia Real Estate Market

So here is an interesting chart which can help explain what is going on in the real estate market in Northern Virginia.  From top to bottom the lines indicate the Active Listings (in yellow) All Pending Sales (in purple) and Closed Sales (in blue).

In about April the Active Listings line and the All Pendings line started to diverge. The Closed sales also started to diverge from Active Listings shortly thereafter in June. The gap between Active and Pending is the inventory available for sale and as you can see, that gap has grown significantly through September (the last month for which data is currently available).  We know from the economic law of supply and demand that when supply increases or demand falls downward pressure is put on prices. We have been seeing that to some extent in our local markets.

The Pricing Trends chart to the right shows that pricing pressure. The median price of new listings (red line) are coming on the market substantially below the median price of existing listings (top line) while the median sale price (at the bottom) indicates what homes are selling for. As you can see the newer listings have pricing which more closely reflects the price that buyers are willing to pay.  Existing listing may need to adjust their prices to compete with them or be prepared to sit on the market for a longer time.

The days on market chart to the left shows that it is taking longer for homes to sell in the current market. Again this is a function of inventory and pricing. All of these factors interact to create the overall market in Northern Virginia.  As we see interest rates change the market changes.  As inventory grows, generally the prices decline but the season also affects sales. Winter is always a slower time of year and the spring is usually faster, often with greater selection but also more buyers competing for homes.  Our spring market seems to be starting earlier.  Early March has had more homes coming on the market.

Your hyper-local market may be different than this. Markets down to a particular subdivision or school boundary area can have completely different characteristics.  These statistics show the complete Northern Virginia situation. I can give you statistics for your specific neighborhood and would be happy to show you exactly how your neighborhood is performing.  Just give me a call today.

So Hows the Real Estate Market?

This is a question I get asked all the time, so here is a quick update about what is going on in Northern Virginia.  This information comes from an article in the Sept/Oct 2014 issue of RE+VIEW, the magazine of the Northern Virginia Association of Realtors. The full article is available here.

The red arrows indicate that things have changed from last year.  In each case this year's metrics are not as good as last year.  I have seen this in the market as homes are staying on the market longer and pricing is softer than it was.  It is taking some more aggressive marketing and price adjustments to get homes sold.

In Fairfax Station subdivision, there was only one home on the market which has since sold after a rather significant price adjustment.  Currently there are no homes on the market in our subdivision.

Overall, the market is shifting from single family detached homes to more condo and townhouse sales.  This reflects more first time buyers and fewer move up buyers that typically purchase detached homes.  This has the effect of reducing the average sale prices for the area as a whole.  In 2014 only 5000 jobs were added May to May. By comparison, the 2011-2012 and 2012-2013 job growth for that time period was around 40,000.  Projections of job growth for the next 4 years are approximately 40,000-50,000 per year.  Since housing is a function of job growth, the outlook remains positive. Despite the dip from last year, the overall market is still much stronger than it was three or four years ago.

How Does Your Home Compare?

How Old are America's Homes?

America has approximately 132 million homes. The median age of a home built in the United States is 40. In 1974, when those houses were built, interest rates on 30 year fixed mortgages averaged 9.1 percent; the median existing home price was $32,000; President Gerald R. Ford had announced a $300 million mortgage credit initiative to help alleviate the housing market recession; and the energy crisis had spurred the incorporation of energy efficient feature new construction.

Source: The U.S. Census Bureau's 2011 Housing Profice, published July 2013, which examines owner-occupied housing and homes in the single-family, multifamily, and manufactured/mobile categories as presented by American Home Shield in Realtor Magazine July/August 2014.