By Paul Valentino
Northern Virginia real estate is on a wild ride! The “Spring” market is off to an early start!
Buyers wading into the housing market to take advantage of low-interest rates will find some challenges out there.
Low Inventory – Inventory in virtually every Northern Virginia market is at historic lows. Lots of buyers and fewer sellers means – guess what? An upward tendency in prices.
At the end of January 2012 there were 5,795 properties for sale in Northern Virginia. That number declined to 4,075 in January 2013, a decline of 29.68%. New listings coming onto the market also declined 6.99%.
If submitting an offer, expect to be in competition with another buyer(s). This experience is increasingly common now, and unless inventory picks up, will remain a challenge for buyers.
Prices - In 2012, the average sold price in Northern Virginia increased 5.12%. Already in January, according to RBI, the average sold price has escalated 7.9% over January last year. Why? Basic economics; there is a lot of demand and not enough supply. We have a strong steady economy here in Northern Virginia and a lot of people have confidence in the job market. They’re flocking into the market to lock in the low interest rates and grab a house at prices that most likely won’t remain at these levels for long.
If you’ve thought about moving up to something a bit larger, this may be the time. Many sellers want to wait for their home price to escalate along with the market and fail to realize that the house they purchase is also escalating! Question; with these two factors equal, how long will rates remain this low? No one can accurately forecast this, so think about what a potential rate increase will do to your payments and how much you will qualify to buy if you wait.
Interest Rates - Interest rates are still attractively low and enticing a steady flow of buyers into the market. This is causing some processing challenges for many lenders to handle the increasing volume of new, as well as refinancing, applications. In addition, buyers will find lenders asking a lot of questions before obtaining that all important loan approval.
Be prepared and have patience. Be sure to obtain a solid pre-approval letter from a bona fide lender used to doing work in this market area. This will go a long way to having your offer accepted by the seller.
Discuss your loan options with the lender. There are still a plethora of programs out there and ways to obtain closing cost assistance. Be sure you’ve tailored your offer and the financing to your best advantage. Nothing will replace your selection of a real agent who understands this phase of the purchase in tandem with a loan officer who can offer a broad array of financing options.
Hang onto your hats, our local real estate market is alive and well!
For more information on Northern Virginia activity, click here .
Paul Valentino is the President of Coldwell Banker Residential Brokerage in the Greater Washington, D.C. Metro, and is a 30-year real estate veteran. . A certified residential broker, Valentino holds the National Association of Realtors® e-PRO professional real estate designation, and is a member of the National Association of Realtors®, the Virginia Association of Realtors®, and the Northern Virginia Association of Realtors®.