These economic times are characterized by uncertainty, and the area’s housing market looks a lot different today than it did last year. In fact, we have probably seen the greatest changes in the market in the past 10 years than any decade in the past 50 years.
Sales
Sales in September since 1998 have averaged just over 2,000 for Northern Virginia jurisdictions. The peak year was 2004 with 2,760 sales and the lowest September was 2007 with 1,072 . Sales in September of 2008 were 1,650, which is a 53.9 percent increase from 2007.
Prices
Median prices of houses sold in September of each year went from $226,000 in 1998 to a peak of $543,000 in 2005, and have since fallen back to $408,000 as of September 2008. That is an increase of 140 percent from 1998 to 2005 and then a decline of 25 percent from 2005-2008. The 2007-2008 decline represented most of the drop with a decrease of 20.9 percent since September of 2007. From 1998-2008, the average annual percentage appreciation in median housing value in Northern Virginia has been 6.3 percent. This is very close to the long-term average during the past 40 years. As prices have fallen in 2008 and sales have increased, it is interesting that within the Northern Virginia area, houses in the more affordable ranges are seeing big increases in sales while sales of higher priced houses are flat to slightly negative.
Days on Market
For September data for 1998-200, the highest average days on market was in 1998 at 137. The average days dropped precipitously in 1999 and for the four years from 2001-2004, average days on the market was between 20-22. As of 2008, the measure is up to 93, which is fairly close to a long term norm.
Looking at these few measures of the past 10 years in the market shows some significant changes. What lies ahead is uncharted territory, but there are some positive signs. Prices had risen to unreasonable levels in rapid fashion, and some major adjustments were needed because the pace of house price increases far exceeded the pace of income increases. The higher house prices were also making it more difficult for area companies to recruit employees and for economic development agencies to recruit companies to come to the region both of which are important to long-term and sustained economic growth. The pain that some have endured is unfortunate, particularly families caught in the foreclosure problem.
But it may be that the worst is behind us. Prices have fallen to sufficient levels that sales are now increasing. This will eventually lead to price stability and then to price growth. Some areas of the region have already achieved that, while for other areas it will take a while longer.
I’m neither Democrat or Republican, but this video explains a lot on how our real estate housing market and current economic crisis came about. You’ll probably need to use the pause button throughout the video since it moves fast… watch it and post up your thoughts and comments.
I was at lunch the other day with some real estate agents and lenders from around the Northern Virginia area.Unfortunately, I was the only Re/Max agent in the restaurant but I can hold my own ground with these middle aged women.Anyhow, we all got started on the topic of the current market situation.Somehow by the grace of God we all agreed that finally, it’s a buyer’s market out there.Surprisingly, no one had anything to say when the topic was brought up.Usually some smart ass will go on a rant about all his/her experiences while the rest of us realize this is our chance to ignore them and dive into our food.
So why do we think it’s a buyer’s market?For the past few years the quickly increasing prices kept many first-time home buyers out of the housing market.However, now those rising prices have started a downward spiral.With the interest rates hovering at relatively low levels, it only makes sense to become a homeowner.
Now don’t go out and try to buy a home if you don’t have a secure job and good credit.The lenders are going to be stricter with income and credit requirements.Take it from my friend at Bank of America.He said that they’re not pushing everyone away, it’s just that they have to start being realistic with who they give the loans to.
You want stats?Here they come.The U.S. median home price was $201,000 in January which is down 4.6% from last January in 2007.The home-price index for the fourth quarter was down 8.9% from a year earlier which was the biggest drop in 20 years.There is a 10-month supply of existing homes right now.
An approach that you might want to take when buying right now is K.I.S.S.This means keep it smart and simple.To sum it up, you’re investing into something big so buy cheaper.Do your research before starting your home search.You can also call me at 888-998-9455 and I’ll explain the home buying process to you and the steps you need to take fully understand everything.
Here’s an insider tip:you have all heard it before, but now more than ever, LOCATION is crucial.You want to make sure that you’re in a good school district if you want to start a family or if you want to sell your home in the future.Also compare your estimated monthly costs for the mortgage, taxes and other expenses with the cost of renting a similar place nearby. If you can rent virtually the same house for a much lower cost, the seller is asking too much.
So if you have been waiting for the right time to buy it’s right in front of your face.Do your research, contact a HomeZill agent, and we’ll take care of you.
The rising number of foreclosures and short sales over the past year have dramatically affected the supply of homes on the market for Northern Virginia real estate. This has in turn, brought the housing demand down (”economics 101″), along with NOVA area home values. The average home stayed on the market 21 days longer in Jan ‘08 versus Jan ‘07. On the other hand, the recent increase in conforming loan and FHA loan limits should give a boost the the DC Metro area real estate market. We should see a good amount of activity over the next few months into Spring and Summer as home buyer confidence rises. The stars are aligned for a buyer’s market in Northern Virginia!
Dr. Stephen Fuller of George Mason University’s Center for Regional Analysis (CRA) located in Fairfax VA, noted in a report in Feb ‘08 that the regional job picture is very strong. More than 20,000 new jobs are projected for Northern Virginia each year through 2011. The report stated that of the 15 largest U.S. job markets, the D.C. Metro area showed the lowest levels of unemployment: 3% - compared with a national unemployment average of 4.8%.
*Data from the Metropolitan Regional Information System, Inc (MRIS). Northern Virginia real estate figures include data collected from Fairfax County and Arlington County, and the cities of Alexandria VA, Falls Church VA, Fairfax VA, and the towns of Vienna VA, Herndon VA and Clifton VA. (Sales figures do not include most new home construction sales and For Sale By Owner sales since the data was not entered in the MLS. Only Northern VA Realtors can access the MLS to enter the sales data)
I’m a sports guy and as far as sports are concerned, it’s been a (for lack of a better word) bizarre year.Just to mention a few things such as, Marion Jones’ fall from Grace, the steroid scandals, Michael Vick and company, spygame, and our beloved Sean Taylor.No one ever said life was easy or that every path was paved with gold.The American housing market had its fair share of ups and downs as well.
However, 2008 has a better outlook.Even through the ghastly headlines of 2007, there were still a number of positive paramount economic forces bolstering real estate and keeping it from a complete pitfall.As these forces continue, it will put the recovery cycle into gear.
Look at the mortgage rates.The 30-year fixed rates were in the 6 percent range for a majority of the year with a few weeks in the high 5’s.This allowed many borrowers to refinance into alternatives such as Federal Housing Administration or conventional Fannie Mae or Freddie Mac loans.Not to mention that the announcement of the national loan-modification and rate-freeze will help those struggling subprime homeowners from going to foreclosure.
The national job growth, economic expansion, and thank goodness for low inflation has helped the national housing market in 2007 and will continue to in 2008.For all of you skeptical people out there listening to the news, the sales of new and existing homes totaled nearly a whopping 6.5 million, which by the way marks the 5th-largest sales year in American real estate history!!!
Another needle that got lost in the haystack in ’07 was the inexperience of all things that come with a market boom as well as the unfelt pains of a credit crunch.The latest quarterly home-price data from the Office of Federal Housing Enterprise Oversight found that while significant declines have occurred in dozens of speculative markets in the past year, prices were flat or up in 204 of the 287 metropolitan markets surveyed.
What goes around comes around.At some point in the correction cycle whether it be, sports, life, love, or real estate peoples’ psychology begin to change.In the case of real estate, people who want or need a house start to look around and realize prices are low and there is affordable financing.They say to themselves, “This is a smart time to buy.”The cycle has done its work.
That psychology should begin taking effect as 2008 starts to unfold.
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These economic times are characterized by uncertainty, and the area’s housing market looks a lot different today than it did last year. In fact, we have probably seen the greatest changes in the market in the past 10 years than any decade in the past 50 years.
I was at lunch the other day with some real estate agents and lenders from around the 
