The market is still humming along in a very balanced fashion. Open houses are very busy and folks are still out looking, but they are getting increasingly frustrated by the lack of inventory in general and good inventory in particular. And it’s likely not ready to improve. We have a 10% drop in week over week inventory from a year ago, and as we head to the Thanksgiving and Christmas holiday season folks who have not sold will be pulling their home off the market to reset the “Days on Market” counter and come back on early in the new year. That’s not good for the numbers but remember that many of these homes aren’t selling because they are not priced realistically or are in poor shape and not discounted enough to reflect that fact.
As a result of these dynamics I am counselling anyone thinking of going on the market in the near future to strike now. Still lots of folks looking and little real competition.
Next let’s talk about Amazon’s likely move to Crystal City. We have been following this anticipated development in great detail in both the commercial and residential spheres. There is a TON of bad info and conjecture out there about the impact on the local real estate market. Most of it involves very shallow thinking and inaccurate comparisons to Amazon’s history in Seattle. Proper analysis involves some second level thinking.
First off as I have noted in previous posts, over the last 2 years we have already seen major companies relocate or expand their presence in the region in significant fashions. Companies such as Nestle, Bechtel, Microsoft and BAE systems have brought in thousands of employees and taken together these actions have a huge, though more disbursed, region wide impact. Second with the proposed split into 2 locations you are talking about 25,000 jobs over 10 years, or 2,500 a year. This effect will be punched up over time as ancillary employment follows in areas like service business, restaurants, etc sprouting up. This will surely have an impact on the local housing market, but where and when? First off much of the immediate effect will be felt in the commercial sector. But in the residential sector we believe it will be more broad based than many who aren’t in the field are anticipating.
I believe the first salvo will be felt in the rental market. Right now there is only a 2 WEEKS supply of homes for rent in the NOVA region. As new employees move to the area many will want to rent for a short period to take time to figure out a new area and where they will want to purchase. So get ready to see rental rates rise dramatically. Great news for all of you investors out there. There will also be some interesting demand and price spikes in areas outside of the immediate Crystal City area. For instance Eastern Prince William in areas with VRE access.
All of this leads to me predicting a period of market confusion, as some sellers and their agents will be too aggressive with their pricing, feeling they have a lottery ticket. Stay tuned for more developments and analysis and call me to discuss how you can take advantage of the coming changes.
It’s a good life.