CRUCIAL BUYER INFO
Ignore the national headlines...it's the local housing market that counts!
What you read online/in the paper or hear on the radio/TV about real estate is based on general data for the nation or regionally. Contrary to what you may hear in the media, there are "hot spots, hot prices and hot locations". And, if property condition and terms are flawless in the hot areas, it is not uncommon to have multiple offers driving the price up.
So, what do you need to know about the DC Metro Area?
The key word to describe the DC Metro Area’s housing market is resilient. Time and time again we see other parts of our country impacted more strongly by national issues than is felt here. While not sugarcoating the challenges the real estate market faces, the fundamentals of our local workforce and economy remain strong. During 2016 we saw new contract activity up minimally at 3.0% in Northern Virginia and 2.3% in DC.
Mortgage interest rates are likely to be the big story for the first quarter of 2017. While rates are still low from any historical perspective, the increase of almost a full point since the national elections has an undeniable impact on affordability. Homes just got more expensive for borrowers and that will ease the upward pressure on home prices nationally and regionally. The relatively tight inventory will help balance that negative pressure to some degree, but remember that supply isn’t tight in all areas and in all price ranges. There is a more than ample supply of expensive homes, where absorption rates -- the likelihood that a home on the market will sell in a given month -- are in the single digits. Townhouses priced between $300,000 and $500,000 have an absorption rate just above 50%. Overall, we think that 2017 will end up looking a lot like 2016.
Special note, while the numbers are saying there is high inventory, time and time again, buyers are still having trouble finding a home.
At McEnearney Associates, we also look to the “Urgency Index” to help us take the temperature of the market – think of it as a rudimentary consumer confidence index for housing. We look at the number of new contracts in a month and see how many of those homes were on the market for 30 days or less. The Urgency Index provides insight into the direction of the market over the next few months and highlights the significant differences in our region.
The average December Urgency Index during the past 12 years for all four of the jurisdictions we track is 48.1%. For the first time in years, Washington, DC is not the top area, eclipsed -- just barely -- by Loudoun County. Northern Virginia is in third place this month. As noted above, it is higher than its 12- year average.
This is the real message behind the numbers: the lower the Urgency Index, the slower the market will be over the next few months. That bodes well for DC, while things will be a bit slower in Northern Virginia and Montgomery County, and even slower in the outer suburbs.
What you need from your Realtor, and what you can expect from Marilyn:
- Expert consultation on your options
- Timely and accurate information
- Constant monitoring of the market
- Outstanding negotiation skills
- Master of all the details
Let Marilyn's 28+ years of successful results in selling hundreds of homes give you the advantage. The next step is to contact Marilyn to learn more about the added value she will bring to your home purchase.
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