Let’s talk about what’s going on in the real estate market.
If you look at our real estate market from a macro point of view, you’ll notice a couple things:
In 2006, we were at the top of the market. In 2009, we were at the bottom of the market. In 2013, there was a recovery. And today in 2019, there’s been a small appreciation. Between 2013 and today, we’ve been at a median average home price increase of around 5%.
Interest rates are now at about 4.5%, but a few months ago, they were up all the way to almost 5%. This is important to understand because economists are suggesting that, over the next year, rates will rise back up to around 5%.
It may not seem like a huge jump, but that increase will impact both buyers and sellers. When interest rates go up, housing affordability goes down because it means that the buyers can’t afford as much, and that, in turn, can cause prices to stall.
Economists are suggesting that, over the next year, rates will rise back up to around 5%.
If we look at home affordability as the combination of prices and mortgage rates, our market right now looks both good and affordable for buyers and sellers.
Inventory, on the other hand, really depends on your location, since Northern Virginia has so many micro-pockets. Typically, for the $450,000 price range, we have around a 30-day supply of homes for sale. Once you go over the $1 million price range, though, we have about a 120-day supply of homes on the marketplace.
If you’re thinking of undergoing a real estate transaction this year, keep these points in mind. In the meantime, if you have any questions or would like to discuss a topic you’re interested in, feel free to reach out to me. I’m always happy to speak with you and answer your questions.
