An Unexpected Fall Market
Real estate continues to be the shining light in the current economic recovery. Buyer demand, housing prices, and new and existing home sales continue to be strong – not only in Northern Virginia but also across the country. Our issue continues to be low inventory levels for the demand that we are presently experiencing. As of today, we have 30% less inventory of homes for sale versus this same time last year. The median days a house stayed on the market in August was just six days, so as you can see, demand is there.
Additionally, prices are up year to date 7.95% over last year’s pricing. The pandemic pushed the housing market back about three months, so what would typically be a slower time of the year is one of our strongest. If you are considering selling, now is an ideal time as we couple all this data with the fact that we have the lowest interest rates in the history of tracking. Call me to discuss your situation in more detail if you are considering selling.
So, where is the market headed into the future? There is talk of another foreclosure crisis that could lead us into another Recession… will this happen? Some say there is a housing bubble, and prices are going to crash… will this happen? My answer is a no to both. First, we have low inventory levels and high demand. In October 2006, we had just under 23,000 houses for sale; today, we have 3,014. If properties are foreclosed on by banks and released to the market, they would sell quickly and not put us into a housing crisis. Again, back then, we had a 10-month supply of houses, today we have a .8-month supply of houses – a considerable difference. Back then, people “walked away” from their homes because of price drops and lending practices; this is not going to happen now. Today’s loan products, loan qualifications, and lending guidelines are nowhere like what they were prior to the Great Recession, and even most people in distress have enough equity in their homes to sell and get out free and clear.
Back then, we had exotic loan programs, 100% financing programs, teaser rate loan products, and just bad underwriting guidelines. Homeowners today are more financially stable, which will result in fewer foreclosures. If there is an area that may be in jeopardy, it would be in the Mom and Pop landlord arena. Basically, people who have one or two investment properties may not be able to “carry” the houses if their tenants are unemployed. This is a small segment, so I don’t see it significantly impacting our market.
Additionally, prices are rising, but not at the rate they were in 2004 – 22% year over year increases, 2005 – 24% price increase year over year and in 2006 it was 23%. As I mentioned, we are at a reasonable pace of 7.95% today; therefore, I do not foresee a crash in prices like we saw in the past. We will see a decline in housing price increases, but not a decline in prices… big difference. Our market is stable and will continue to be so for some time, in my informed opinion. If you would like to discuss this further, please feel free to call me.
Enjoy the cool weather! Have a safe and Happy Halloween!
It’s a good life.
Chris
Tips to Celebrate Halloween Safely During the COVID-19 Pandemic
Source: Janet Loehrke and Veronica Bravo, USA TODAY
Halloween 2020 doesn’t have to be canceled by coronavirus. Here are tips to keep your little ghosts happy, even without traditional trick-or-treating.
This Halloween, there’s one more monster lurking: the coronavirus. The Centers for Disease Control and Prevention unveiled its guidelines for celebrating safely on Oct. 31. The health organization advised against traditional trick-or-treating this year and suggested lower-risk activities such as Halloween-themed scavenger hunts at home or placing prefilled treat bags at the end of your driveway for kids to pick up.
Parents: What to consider before going out on Halloween
Sandra Kesh, an infectious disease physician at Westmed Medical Group in Purchase, New York, says it’s possible to safely trick-or-treat this year. She advises limiting trick-or-treating to three or four kids. If heading out in groups, families should ask each other if they’ve been taking precautions and wearing masks. Parents can wipe down candy or let it sit for a couple of days if they are worried about surface transmission of the virus.
If COVID-19 is not well-controlled in your area, you should refrain from going out, Kesh says. Health departments and government websites typically offer public tracking of coronavirus infections, or you can ask your physician. Enclosed spaces, such as apartment buildings, should be avoided, she says. Keep things outdoors. Kesh advises having “a very serious conversation with your kids that if you are going to take them trick-or-treating, the rules have to be followed and respected. Otherwise, the game is over.” She recommends an adult chaperone even for older children to ensure safety protocols are followed. Trick-or-treaters should use hand sanitizer regularly and avoid touching their face.
Outdoor activity: Form a candy line
The CDC says one-way trick-or-treating in which individually wrapped goodie bags are lined up for people to pick up while maintaining social distance (such as at the end of a driveway or at the edge of a yard) is a moderate-risk activity. If you plan to participate in one-way trick-or-treating, wash your hands with soap and water for at least 20 seconds before and after preparing the bags, the CDC says. If you’re sick, don’t hand out candy. If you’re in good health, be sure to wear a mask. Several contactless delivery ideas have circulated online: a “candy chute” – a 6-foot-long cardboard tube to slide candy to trick-or-treaters; a table stationed 6 feet away from the front door with individual bags of candy for children to grab or a large handmade spider web with candy taped to the strings.
At-home activities: Virtual costume parties and movies
If you refrain from going out on Halloween because you’re in a high-risk area, there are several ways you can celebrate the holiday at home. The CDC suggests having a candy scavenger hunt in your home or outside in the yard. Also suggested are Zoom parties with friends, which include a costume contest. Netflix has a free extension that allows you and your friends to watch a movie at the same time online. Another fun way for children to get their candy at home is to have a piñata as the ending to a spooktacular Halloween.
Recipe Corner
Apple Pie Bars
source: delish.com
Yields 18 servings | Total time 2 h, 10 m
INGREDIENTS:
FOR THE CRUST
· Cooking spray
· 1 c. (2 sticks) butter, softened
· 1/2 c. granulated sugar
· 1/4 c. packed brown sugar
· 2 1/2 c. all-purpose flour
· 1/2 tsp. kosher salt
FOR THE FILLING
· 6 apples, peeled, cored, and sliced
· Juice of 1/2 lemon
· 1/2 c. packed brown sugar
· 1 tsp. ground cinnamon
· 1 tsp. pure vanilla extract
· 1/2 tsp. kosher salt
FOR THE TOPPING
· 1 1/2 c. all-purpose flour
· 1 c. chopped pecans
· 1 c. packed brown sugar
· 1/2 tsp. kosher salt
· 3/4 c. (1 1/2 sticks) butter, melted
· Caramel, for serving
DIRECTIONS:
- Preheat oven to 350°, line a 9”-x-13” pan w/parchment then grease w/cooking spray. In a large bowl using a hand mixer, beat butter & sugars together until light & fluffy. Add flour & salt, mix until combined.
- Press into prepared pan, 1/2” up sides. Bake until lightly golden, 20 minutes.
- In a large bowl, toss apples, lemon juice, brown sugar, cinnamon, vanilla & salt. Spread apples over crust.
- In a medium bowl, whisk together flour, pecans, brown sugar & salt. Stir in melted butter until coarse clumps form.
- Sprinkle crumb topping over apples, bake until top is golden & apples are soft, about 1 hour. Let cool for 15 minutes, slice into squares, drizzle w/caramel before serving.
Fall-ing Inventory Means Bidding Wars Could Continue This Autumn
by Stephanie Visscher | news.remax.com
Homebuyers are looking to make a move, but current homeowners are staying put, adding to inventory constraints. Real estate agents share how buyers can still win in a competitive market.
As pent-up demand from the spring compounded to create one of the busiest summers for residential real estate on record, the demand is promising to spill over into the fall months.
“Normally, my brokerage’s sales start to dip after September, and we generally have a slowdown all the way through the end of February,” says Christy Walker, Designated Broker/Owner of RE/MAX Signature in Phoenix, Arizona. “But in this case, it doesn’t seem to be slowing down. We are expecting to see this pressure of demand continue through the fall.”
Several agents are saying buyers, many eager to relocate due to the flexibility offered by remote work, are looking to move to the suburbs for more space and lower housing costs, while current owners seem content to stay put. It’s all contributing to competition for limited inventory taking place across generational lines.
Melvin Vieira, an agent with RE/MAX Destiny in the Greater Boston area, says before COVID-19, there used to be a cycle of younger generations trading condos in the city for single family homes, while older generations would downsize and move into those smaller homes closer to the city. That’s no longer the case. The result was a heavy demand for single-family homes even before the pandemic began, which has now heightened due to the real estate market restarting post-quarantine.
In Phoenix, Walker is seeing a different competition between generations play out. Boomers are retiring and downsizing, but they’re eyeing the same properties millennials view as the perfect starter home. “I’ve got several millennial first-time buyers who deferred buying a home until now,” Walker says. “They’re realizing they just need to move forward with their dreams and not put things off.”
Low interest rates are creating opportunity – and competition
Low mortgage interest rates have played a large role in making those dreams achievable, encouraging more buyers to enter the market. The average interest rate for a 30-year fixed mortgage in early September was just over 3%, according to Bankrate. “We’re finding now that even though homes may have escalated $50,000 in price due to demand, lower interest rates could mean the monthly payment is still low. It’s creating affordability most people didn’t have before. With an increased ability for buyers to bid above a listing price, sellers in certain areas may get top dollar for their home this fall, but buyers have more flexibility in negotiations than they may realize.
How buyers can win in a seller’s market
It starts with a competitive offer, which contrary to popular belief, isn’t always bidding to pay more for the home, according to Walker. “If you’ve seen several houses and you’re confident that a home is worth $15,000 more than what it’s listed for, then go ahead and bid higher,” Walker says. “But buying over value to compete in a bidding war is not going to help you in the long run. You need to consider your exit strategy.”
Life can change on a dime, and sometimes owners need to sell sooner than planned. If they overpaid for a home in a bidding war and aren’t able to recoup those costs in a sale, they may end up losing when all is said and done. Instead, Walker says buyers should work with their agent to see if their inspection period in the contract can be shortened. If a seller says they will be reviewing offers on a certain day, buyers can use the time before then to have an inspection (with the seller’s permission). That way buyers can waive the inspection in the offer without actually taking on the risk of having no inspection at all.
In a competitive market, an agent’s role is also more critical than ever. You need an agent by your side that knows the business and the proper questions to ask. Your agent will always be thinking of what can go wrong and help make sure you’re well-informed about the real estate process.
As low housing inventory is likely to continue into the future, it’s important for buyers to keep an open mind. A home might need a few upgrades to become the home of their dreams. “Look at the house and understand what it has to offer. Not every house is going to be 100% of what you want,” Vieira says. “As long as it’s 75% of what you’re looking for, you can typically make that house a home.”
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