These are uncertain times for sure and the real estate market is not exempt from that but does that mean you should hold off from buying or selling? I’ve read more than my fair share of coronavirus articles that have given different points of view and information. I’ve also seen many COVID-19 related real estate posts and articles doing the same so I figured I’d throw my hat in the ring.
Since the start of 2019 we’ve been sitting in the lowest inventory and most competitive real estate market that I have seen in my career. Buyers have been out in full force because of low interest rates but there’s little to nothing for them to buy. When a property comes on the market, it’s very common to see ten plus offers with the final price escalating well above list price. In order to compete we started seeing buyers submitting offers that were non-contingent on home inspection, appraisal and financing. All of which in a “normal” market would be contingencies that would protect the buyer throughout the course of the sale. By the start of 2020 it got the point where you didn’t even have a chance of getting your offer accepted with these contingencies in place.
In order to give you a comparison of the local real estate market in 2019 vs 2020, I’ve posted the numbers for each Northern Virginia county including DC for April of 2019 and April of 2020. As you can see, not much as changed. Keep in mind, an equal buyer/seller market has a SIX month supply of homes for sale. Anything less than that is considered a sellers market.
Arlington County:
April 1 2019 vs. April 1 2020
Active Listings – 2019: 249 / 2020: 210
Pending Listings – 2019: 334 / 2020: 247
Sold in Last 30 Days – 2019: 245 / 2020: 215
Days on Market – 2019: 9 / 2020: 7
Months Supply – 2019: 1.01 / 2020: 0.97
DC:
April 1 2019 vs. April 1 2020
Active Listings – 2019: 1,373 / 2020: 1,254
Pending Listings – 2019: 1,353 / 2020: 1,093
Sold in Last 30 Days – 2019: 801 / 2020: 786
Days on Market – 2019: 15 / 2020: 10
Months Supply – 2019: 1.7 / 2020: 1.59
Fairfax County:
April 1 2019 vs. April 1 2020
Active Listings – 2019: 2,045 / 2020: 1,490
Pending Listings – 2019: 2,300 / 2020: 1,737
Sold in Last 30 Days – 2019: 1,472 / 2020: 1,302
Days on Market – 2019: 11 / 2020: 6
Months Supply – 2019: 1.38 / 2020: 1.14
Loudoun County:
April 1 2019 vs. April 1 2020
Active Listings – 2019: 956 / 2020: 725
Pending Listings – 2019: 1,075 / 2020: 834
Sold in Last 30 Days – 2019: 498 / 2020: 535
Days on Market – 2019: 14 / 2020: 6
Months Supply – 2019: 1.91 / 2020: 1.35
Prince William County:
April 1 2019 vs. April 1 2020
Active Listings: 2019: 943 / 2020: 594
Pending Listings: 2019: 1,208 / 2020: 930
Sold in Last 30 Days: 2019: 604 / 2020: 567
Days on Market: 2019: 20 / 2020: 6
Months Supply: 2019: 1.56 / 2020: 1.04
The question that I’m getting from sellers in this market is whether or not they should sell right now. My suggestion from what I’m seeing is that if you’re ready to go and list in the coming weeks or months, stay the course and get your home ready for sale. We’re still seeing multiple offers on properties and I don’t expect that to change any time in the very near future. The buyers that were in the market prior to COVID-19 seem to be staying in the market until they find a property. With inventory levels as low as they are, it’s going to take some time before those buyers are cleared out of the market. If we start to see a shift you can re-evaluate at that time. However, trying to time the market can end up costing you. Even if the market does shift in the direction of a “buyers market”, it will take some time before we actually get to the point where the negotiations are in the buyers favor.
The question that I’m getting from buyers in this market is whether or not now is a good time to buy. I get it, prices are high and it’s extremely competitive. However, interest rates are low and that affects your overall buying power. For every point that interest rates go up, that affects your buying power by 8-10%.
Ex: includes principle, taxes, insurance
$500,000 purchase price with 3.5% interest rate with 5% down payment: $2,830
$450,000 purchase price with 4.5% interest rate with 5% down payment: $2,844
If you wait to buy and interest rates go up one percentage point, you’re now in a position where you’re buying a $450,000 property instead of a $500,000 property AND your monthly payment is still a bit higher. Interest rates are fluctuating right now and I understand that this can be concerning while you’re looking for a home. However, trying to time the market is a dangerous game. Even if interest rates go up, 4.5% is still a historically low interest rate and very similar to what we were looking at last year. Imagine what your buying power looks like if we go to 7,8 or 9% interest rates.
The bottom line is that even with COVID-19 properties are still selling and now is a great time to buy and/or sell. Take advantage of selling in a high market and buying while interest rates are extremely low.
Check out some of our past articles and look forward to some Coming Soon articles:
- Best time to Sell
- How long does it take to close on a home?
- Does staging make a difference?
- Relationship between home price and days on market
- Does a higher down payment help with negotiations?
- What are Closing Costs and who pays them?
If you have specific questions or would like to set up an in-person meeting to discuss your scenario, please call or email me directly at 703-915-2244 / [email protected]. If you enjoyed this post and would like access to more of my articles/videos, visit the video/blog section of my website at: https://jcurrygroup.com/videos/
Jason Curry
Licensed Realtor: VA & DC
J Curry Group at KW Metro Center
2101 Wilson Blvd #100
Arlington, VA 22201
703-224-6095
