Is Our Housing Market Shifting?

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Real estate, much like the stock market, can change dramatically within just a few years. Over the last 24 months in Stafford County, we’ve seen huge increases in home values as well as major swings in inventory. This has led many people to wonder if our housing market is shifting. I recently wrote an article that goes into detail about the current market and whether I believe that we’re seeing a shift. To read it in its entirety, follow this link.

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Market conditions can vary widely depending on your exact location.

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If you have any questions or would like more information on the real estate market, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Where Are Interest Rates Headed in 2018?

Interest rates have risen since the beginning of the year and are expected to increase again. Let’s discuss what this means for buyers and sellers in today’s market.

Looking to buy in the Stafford/Fredericksburg area? Perform a full home search 

Looking to sell in the Stafford/Fredericksburg area? Get a free Home Price Evaluation

A question many have been asking lately is, “What’s going on with interest rates?” The short answer is that they are going up. Rates have already risen this year and are expected to do so again in the future. Based on positive indicators in the US economy, the Fed is pushing rates back up and tempering years of policy that has been keeping them artificially low. Since the first of the year, rates have increased from around 3.99% to 4.5% as of May 2. It’s hard to say what the future holds, specifically, but I think it’s safe to anticipate a couple more increases by the end of the year. This could put us at, or even above, the 5% mark. However, even if rates do reach this level, they would still be low compared to historical averages. Freddie Mac has easily accessible data going back to the 1970s that supports this.

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If you’ve been thinking of buying, now is absolutely a great time to take advantage of our market.

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So if you’ve been thinking of buying, now is absolutely a great time to take advantage of our market. That said, it’s also a good time to sell. Rising rates will translate to decreased buying power, meaning the current market presents an opportunity for sellers to capture higher prices before this happens. Affordability has a major impact on how buyers make decisions. Even what seems like a small rate increase can have a significant effect on the dollar amount buyers pay for a home. If a buyer would have bought a home for $350,000 at the beginning of this year when interest rates were around 3.99%, their monthly mortgage payments would be $115 less expensive than if they bought a home at that same price today. By the end of the year, a buyer for that same home could see a $200 difference. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

What Does the Fed’s Recent Announcement Mean for You?

Now that the Fed has announced they’ll start reducing their balance sheet, you should consider buying or selling sooner rather than later.

Looking to buy in the Stafford/Fredericksburg area? Perform a full home search 

Looking to sell in the Stafford/Fredericksburg area? Get a free Home Price Evaluation

As you may have heard already, the Federal Reserve had a meeting on September 20th. At that meeting, they announced that they are going to start reducing their balance sheet. This means they’ll start reducing their massive holdings of the mortgage-backed securities they bought during the height of the economic crisis. What does this mean for buyers and sellers? The first thing to keep in mind is this isn’t an immediate situation. This program is getting ready to start, but the Fed owns $3.5 trillion in these securities, and they’ll only be selling back $10 billion a month initially.

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Whether you’re a buyer or seller, it’s a good idea to think about how this might affect your situation.

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If you’re planning on buying a house and getting a mortgage loan to do so, the monthly amount you’ll be paying on that mortgage will be affected in a huge way by how much the interest rate is. Over time, the Fed reducing their balance sheet will increase borrowing costs for consumers, which in this case means interest rates. Essentially, if you wait as long as six months to a year from now to buy, it will either cost you more to buy or you’ll be able to afford less house. If you’re considering selling your house a year or two down the road, you want to think hard about doing it sooner rather than later because of the effect this decision is having on buyers. If you wait, they won’t be able to afford as much house or they’ll have to purchase at a lower price. This is especially true if your house is in the upper price ranges of your area or it’s considered a move-up house for buyers. Whether you’re a buyer or seller, it’s a good idea to think about how this might affect your situation. If you have any other questions about this subject or you’re thinking of buying or selling a home in our area, don’t hesitate to reach out to me. I’d be happy to help you.

October Market Snapshot

In our market, sales prices are up and interest rates are still sitting at historic lows. What does this mean for buyers and sellers?

Looking to buy in the Stafford/Fredericksburg area? Perform a full home search 

Looking to sell in the Stafford/Fredericksburg area? Get a free Home Price Evaluation

What’s happening in our local market?

Overall, we’re seeing really great activity. There have been some really good price gains over the second quarter—right around the 4% range. Over the year, we’re sitting at a 2% to 2.5% sales price increase, which is pretty healthy growth. In general, listings are getting great showing activity.

As far as home values go, they’re going to be directly affected by the amount of activity that’s happening in the market, so that 2% to 2.5% increase that we’re seeing tells us that we don’t have a glut of inventory. Though things are moving quickly, we’re not in a pure seller’s market, either. That said, the ratio of a seller’s list price to actual sale price is up almost a whole percent over the second quarter of 2015. This is a hugely positive statistic!

Currently, our market is carrying three to four months of inventory. This generally indicates a market that’s in balance – the number of buyers is sustaining the inventory that’s hitting the market but isn’t eating it up at a rate that would severely deplete inventory. The average days on market can vary between price ranges, but in the area as a whole, we’ve seen 18 to 20 days on market. Our Team Gillies listings in the area’s core price range average 12 to 13 days on market.

Interest rates are still at historic lows.

Interest rates are still at historic lows, so it’s an awesome time to get a mortgage. Money on a home priced between $300,000 and $600,000 is still super cheap. A lot of the government loans are still well under 4% as well. The Fed is about as split on this as we’ve seen, though, so a lot of speculators are looking for a possible rate hike in December.

These numbers mean it’s a good time to be both a buyer and a seller, but it’s an especially good time of year to be a buyer because you have less competition from other buyers that are moving into the area and we’re still seeing a good amount of homes coming on the market. Also, low rates mean your purchasing power near historic levels. I can explain further if you’re interested.

If you have any questions about the market, please feel free to email me or give me a call. I look forward to helping you!

What Can Buyers and Sellers Expect in Virginia?

Looking to buy in the Stafford/Fredericksburg area? Perform a full home search
 Looking to sell in the Stafford/Fredericksburg area? Get a free Home Price Evaluation

Today we’re going to talk about whether we’re seeing a buyer’s or seller’s market here in Virginia. We’ve had a lot of questions about this lately, and we are going to give you a rundown of exactly what you can expect in this market.

Truthfully, both buyers and sellers are in a great position. Our current inventory has dropped by 9.2% compared to last year, and this low inventory can bump sale prices up for sellers as more and more buyers are bidding on fewer homes. This can lead to multiple offers and bidding wars, which sellers love to see.

 

As far as buyers are concerned, interest rates are still historically low, in the 3-4% range for 30-year fixed loans. The lower the interest rates, the higher purchase prices buyers can qualify for. We are anticipating a strong market for both buyers and sellers this year and if interest rates continue to stay low, sellers are going to continue to be in a great position as well. An interest rate hike would take some buyers off the fence to purchase, which would lead to a lot more activity on seller listings.

If you have any questions, or are thinking about buying or selling, give us a call or send us an email. We would love to hear from you!