Loudoun County Housing Market Update – September 2012

In case you’re wondering what the Loudoun County housing market is like, here’s the 411… In layman’s terms, it’s really good for sellers and tough for buyers. Why? Because Loudoun’s housing inventory is very low while an increasing number of buyers are out taking advantage of the ridiculously low interest rates. This makes for more buyers looking at the same properties (good for sellers) and fewer options and increased competition for buyers (not good for buyers).

If you’re a numbers person, here are the statistics broken down for you (if you can’t see the document below, click here)…

Loudoun Housing Market Stats – September 2012

If you would like a more detailed market statistics report for your specific town, subdivision or property type, click here and send me a note with what you need.

Loudoun Housing Market Good for Sellers, Tough for Buyers

Loudoun County’s housing market has been getting better for sellers while becoming tougher for buyers. The main reason behind it all is inventory.

Loudoun’s housing market has seen inventory levels go down over the past 5 years. But this year has really seen a drop. Or actually…a lack of a rise during the “spring market” of 2012.

As you can see in the following chart, the number of active listings (houses for sale on the market for buyers to choose from) went from 3,540 in September 2007 to 1,087 in December 2009. This was mainly due to the number of short-sales and foreclosures/bank-owned properties for sale dwindle.

Once we got to 2010, the market got back to its’ typical cycle of seeing inventory rise during the spring and fall markets and drop during the summer and winter months. This was a good sign because it signaled a return to a healthy(ier) market.

But then take a look at what happened this year…

Rather than the previous two year’s 42 percent jump from about 1200 to 1700 active listings on the market in Loudoun County, this year’s spring market saw only about a 15 percent increase in active listings in Loudoun County. But the number of buyers increased (mainly due to new-record low mortgage rates and increased consumer confidence). This created a low-supply/high-demand scenario which is ideal for sellers and not so great for buyers.

What does this mean if you are a seller in Loudoun County?

• more buyers fighting over your house (multiple offers if your home is priced correctly)
• higher sales prices (home values have been steadily increasing for about 2 years now and it’s especially the case in 2012)
• your home will sell faster (average days on market is lower than it has been in several years – it’s as low as 8 days in some areas)
• the ball is in your court when it comes to negotiating (not saying you can be completely ruthless in your demands to the buyer, but sellers have more leverage now than they have in over half a decade)

What does this mean if you’re a home buyer in Loudoun County?

• less homes to choose from and more time to find one (you may have to be more patient and spend more time looking for your perfect home in your perfect location and/or make some compromises to the home and/or location)
• you may be competing against other buyers’ offers (very much the case if the property is priced at or below market value)
• you may not get all of your demands met come negotiating time (the ball is in the sellers’ court right now so asking for reasonable things is one thing, asking for the sun, moon and stars included with the house is another)
• you will have to act quickly once a good deal this the market (guarantee there is at least one other buyer with serious eyes on the same “good deal” who is contacting their agent to go see it and probably submit an offer immediately)
• you may want to look at new home construction options – many other buyers are (blog post on this coming soon)

There are more bullet points than just the ones above, but this gives you a general idea of how the market is like and what it means to sellers and buyers. If you would like to know more or to find out what the market is like in the specific community/subdivision you live in or are interested in buying within, click here to contact me and I’ll get back to you right away.

How’s the Loudoun/Northern Virginia Real Estate Market?

It’s the question on the mind of ever seller, buyer, homeowner and even renter, “How’s the real estate market?” And not just in Loudoun County, but Northern Virginia and the DC metro area in general. Well, you may be surprised at the answer…

It’s pretty darn hot.

Yes, I said “pretty darn hot”. Because that’s what it is.

It’s not crazy hot like the boom market back in ’03 – ’06. But it’s still got some heat to it. If you’re in the market to buy a home or selling your home, you probably know what I’m talking about. If you’re not, let me fill you in…

1. Inventory is down (less to choose from)
2. Buyer demand is up (more buyers fighting over the same properties)
3. Interest rates have hit two new historic lows within the past month (money is cheaper than ever before)
4. General consumer confidence is on the rise (buyers waiting on the sidelines are now becoming active buyers)

This is the ultimate formula for a pretty darn hot market with increasing market values.

The Loudoun and general Northern Virginia real estate market has been getting better and getting hotter for about a year now. But the last 5 months have really been on fire.

• Days on market is down to 55 days (signals a seller’s market)
• Average sold to list price is up (less negotiating room)
• Sold listings are up (buyer demand is up)
• Median sold price hit a double bottom and is on the way up (signals price appreciation/values going up)
• The number of homes going under contract each month went from 337 in December 2011 to 642 in April (buyer demand is up)

Sellers have noticed and become more optimistic and firm in their asking/list prices. But savvy buyers are still looking for the best deals, know market values better than ever before and are continuing to negotiate hard.

In the end though, sellers do have the upper hand mainly because there is so little inventory to choose from and that tips the supply/demand scale in sellers’ favor.

Personally, I think we need more inventory on the market. I’m all for a healthy market with rising market values. But buyers are getting frustrated at how little they have to choose from and/or how long they have to search to find a house that meets their needs. More inventory would help out buyers while giving sellers one of the best markets to sell a home in since the middle of the last decade (hint hint).

Loudoun County Spring Real Estate Market Is In Full Effect

The Loudoun County “spring real estate market” is in full effect. The number of available homes for sale is on the rise. And the number of homes going under contract is on the rise as well. If you are waiting for the “spring market” to get here, you’d better jump in now because it’s about halfway over.

That’s right…about halfway over. I’ve been saying it for years (because it’s true) – the “spring market” starts in January. The number of homes that go under contract starts to rise sharply in January and continues through the end of May/early June. In plain English…lots of home buyers get super serious and start writing offers on homes in January and continue doing so through about the end of May/early June. Then the hot, humid, vacation and kids-back-in-school months of July, August and September roll around and the market fizzles out a bit.

To put it in visual terms, here is a graph showing the number of new, ratified contracts on homes for sale in Loudoun County…

And here is a graph showing the number of new listings coming on the market…

There are pros and cons to this time of year. If you’re a buyer, you have more choices. But you also have more competition when submitting offers. As a seller, you have more buyers looking at your property. But you also have more competition from your neighbors who are also getting looked at by the same buyers that looked at your house.

P.S. The same holds true for the rest of Northern Virginia. And this is not just a “2012 thing” – this trend repeats itself year after year in this area.

If you have questions about a specific town, community or subdivision, let me know. I’d be glad to send you a hyper-local report for the area you’re in or thinking about buying in.

 

State of the Loudoun County Housing Market

Wondering what the current state of the Loudoun County housing market is and where it’s trending? Here’s a detailed breakdown…

Loudoun County Home Buyer Activity Up

As you can see in the graph below, the average number of homes that go under contract each month in Loudoun County has been around 400 for the last half of 2010. But, starting January 2011, the number of homes going under contract increased dramatically and has been averaging just below 600 per month for the past 4 months. This means that buyers are out in greater force and actively buying properties – almost 50 percent more this year than they were the last half of 2010.

Loudoun County Housing Inventory Up…Down…Up

The number of active listings (homes for sale) in Loudoun County makes me think of the Grizzly in King’s Dominion. After hitting 1742 in September 2010, the number of active listings dropped quickly to a mere 1200-something in December, January and February (that’s a ridiculously low amount). But then it climbed quickly and is back up to 1696 as of June 2011. The increase is a trend that points away from a seller’s market, but don’t be fooled…1700 is still considered low when it comes to the total number of homes for sale in all of Loudoun County.

Loudoun County Median Sales Price Up

While the median home price in Loudoun County took another dip in the last half of 2010, it’s been on the rise in 2011. After going down in the last half of 2010 and hitting a low of $317,500 in January 2011, the median sales price hit $410,000 in June 2011. That’s almost a $100K/32% increase!

Loudoun County Average Days On Market Down

After hitting an average of only 49 days, the average days on market in Loudoun County went up to 86 (which is still not too shabby) in February 2011. Since then, the average days on market has dropped back down to 60. That’s only 2 months and is an important technical indicator that points to a seller’s market (though we need to keep an eye on the increase in active listings which may soon start to put upward pressure on the average days on market).

These statistics reinforce what my clients, myself and other active agents have been seeing on the ground…

• More buyers and investors are out buying a home or investment property this year than last year
• The extremely low interest rates have made a positive impact on the market
• Inventory is down so finding the right home for a buyer takes longer now than it did last year (patience is a virtue)
• Sellers that price, market and present their homes correctly are getting offers sooner than they would have last year
• Sellers have more negotiating power this year than last year (while buyers have less)
• Prices are higher today than they were last year (supply vs demand)

If you’re thinking about buying or selling a home in Loudoun County or would like to know what the market is like in your specific community, click here to contact me – I would happy to provide you with a free hyper-local market analysis and CMA.

River Creek Real Estate Market Update – Single Family Homes

Here’s the latest on the single family home real estate market in River Creek (Loudoun County)…

Overview

The overall single family home real estate market in River Creek is balanced – neither a seller’s nor buyer’s market. Buyer activity is up (though it’s not a buyer’s market by any means) and homes are selling in a timely manner if they are priced, marketed and presented correctly.

If you are a River Creek buyer, you will see everything from overpriced to underpriced single family homes on the market. Have your Buyer’s Agent give you the comps on any properties you’re interested in so you know how the asking price compares to current market value. If a property is at or below market value, don’t expect to “steal” the property from under the seller. If the property is underpriced by a significant amount, expect to battle it out with other buyers’ offers (yes, even in the $1M+ price point).

If you are a River Creek seller, you don’t have an overabundance of competition, but you still have competition. If you price, market and present your property correctly, you will have buyers come through and an offer in your hands in a timely manner. If you are selling your house “short” and under price it to get an offer quickly, you may very well see multiple offers on the property.

Numbers/Statistics

The number of single family homes listed for sale 2011 YTD is up 7.5% from this time last year. Not so good for sellers, but good for buyers because they have more choices. But, in the end, this stat is washed out because…

The number of single family homes sold 2011 YTD is up 28% from this time last year. This increase is much higher than the increase in homes listed which is why it washes out the previous stat. This is great news for sellers because there is more demand and helps with market values. For buyers, it means that there are more buyers actively buying properties in River Creek and you may have to face some of them in competition for the same property.

The average number of single family homes that sell each month 2011 YTD is 3.13. This is a 28% increase over this time last year (2.26 per month average). More activity in the River Creek single family home market is good news for sellers and home owners. For buyers…see the paragraph above.

The current number of active single family homes in River Creek is 21. Based on the absorption rate (3.13 per month), there is a 6.71 month supply of single family homes in River Creek. Generally speaking, anything over a 4 month supply is considered a “soft/buyer’s market”. But considering the price point, 6.71 shows a balanced market. The reason for this is because the higher the price point, the longer the average days on market and months supply of inventory.

Summary

The single family home real estate market in River Creek continues to show increased buyer activity and is considered to be a “balanced market”. Though sellers will be happy about this, some buyers may not. But remember buyers…once you move in and become a River Creek home owner, you’re going to want the exact same thing you dreaded as a buyer – a strengthening real estate market in River Creek rather than a weakening one.

If you would like more information about the real estate market in River Creek or are interested in selling or buying in River Creek, click here to contact me.

Loudoun County Housing Inventory and Days On Market

Let’s take a look at Loudoun County’s housing inventory and average days on market (DOM). This is important to know because it gives you a sense of how to negotiate as a buyer and how to position your property as a seller.

Loudoun County inventory – new and active listings

There are just under 1500 active listings in Loudoun County, which is on the low side. To give you some comparison points…active listings hit a decade-low 1087 in December 2009 (seller’s market and values went up). And active listings hit an all time high of 4659 in the summer of 2006 (that’s when everything really hit the fan, prices started tanking and it was a buyer’s market).

Note: Yes, inventory has risen in the recent weeks. But that’s a yearly/seasonal thing called the “Spring market” when sellers believe they can get the most for their homes and put their home on the market.

Loudoun County average Days On Market (DOM)

The general rule of thumb in this area has been that when DOM goes above 4 months (120+ days), it signals a buyer’s market. If DOM is below 3 months (<90 days), it signals a a seller’s market. Right in between 90 and 120 days typically signals a balanced market. As you can see, DOM is below 80 and was even as low as 40 for a while there.

What does all of this mean?

For home owners that are able to sell their home at its’ present value, the market is on your side. DOM and inventory are low, two things that bode well for sellers.

For buyers, it means that your choice of homes is limited. In addition, you’ll see a lot of competition on the current homes on the market and even stiffer competition (aka multiple offers) on the homes that are priced very well and a great value.

Even though the signs point to a sellers’ market (and recovery), don’t get overly excited. Among other things, there is a lot of shadow foreclosure inventory to still get through and lending guidelines are making it harder and more expensive for consumers to get financing.

If you would like statistics about a specific town or community within Loudoun County, don’t hesitate to contact me.

Washington, DC Metro Area Rental Rates Rising

Rental rates in the Washington, DC metro area (including Northern VA and MD) are rising. They’ve risen so much that the Washington, DC metro area came in 9th in the list of metro areas in the U.S. with the greatest increase in rental rates.

Here’s the list in order…

1. Greenville, SC (+11.2%; $669 average monthly rent)
2. Chattanooga, TN (+10.4%; $726 average monthly rent)
3. Savannah, GA (+8.4%; $866 average monthly rent)
4. Portland, OR (+8.1%; $875 average monthly rent)
5. San Jose, CA (+8.0%; $1,716 average monthly rent)
6. Nashville, TN (+8.0%; $786 average monthly rent)
7. Tacoma, WA (+8.0%; $900 average monthly rent)
8. Denver, CO (+7.5%; $873 average monthly rent)
9. Washington, DC (+7.4%; $1,473 average monthly rent)
10. Raleigh, NC (+7.4%; $785 average monthly rent)

Good for landlords and investors

This is good news if you’re a landlord/investor because it’s more money in your pocket and a higher return on your rental property investment. For those that are renting their property out because they are upside down, but don’t want to or can’t do a short-sale, the rental rate may soon able to cover your mortgage rather than you losing money every month.

Not good for renters

This is not good news for renters. It means more money and less negotiating power when getting a rental. For several years now, rental rates have been very low compared to mortgage amounts for the same property making renting a very attractive prospect. But that’s starting to change. For those on the fence about renting or buying, you want to start explore your options when it comes to buying. Rental rates are on the way up yet, prices are at realistic levels and mortgage rates are still very low (for the moment).

Note: This figure is for the general DC metro area – each specific area and subdivision is different. Contact me to find out what the rental market is like in your specific area or the area you’re looking to rent in.

H/T Bill Lublin

Loudoun County Housing Inventory Cause for Caution

After a year of steadily diminishing housing inventory throughout Loudoun County, inventory has spiked over the last 2 months. After dropping almost 30 percent from the beginning of May 2009 to the middle of April 2010, inventory has spiked up almost 10 percent in a matter of a few weeks…

More Loudoun County housing inventory statistics…

• The number of new listings coming on the market in March 2010 was 50 percent higher than in March 2009 (1092 versus 727)
• The number of new listings coming on the market in April 2010 was 32 percent higher than in April 2009 (994 versus 752).

The increase in new listings and overall inventory may be a very welcome thing if you ask buyers. Most buyers can’t seem to find a home that meets their needs or they’re competing against multiple offers every time they do.

But if you’re a seller, that’s a different story. More homes on the market means more competition, lower selling prices and increased days on market.

Loudoun County housing inventory and the rate of new listings coming on the market is something we all need to keep our eyes on because if inventory continues to go up AND interest rates go up this summer as everyone is saying they will, the market will soften.

Loudoun/Northern Virginia Housing Market Conditions per Price Range

The question I get asked most often is, “How’s the Loudoun/Northern Virginia housing market?” Today’s housing market conditions do not allow for one, general correct answer. For the purpose of giving you a good, general idea of the Northern Virginia* housing market conditions, I’m going to break it down by price range – you choose the price range you fit into.

*I am referring to all of Northern Virginia, which includes Loudoun, Prince William and Fairfax counties (including Arlington, Falls Church, Alexandria, etc)

Note: If you would like to know what the specific housing market conditions are within your community or the area you are interested in buying within, click here to contact me so I can provide you with the specific details and statistics.

Less than $150K

• This is probably the most competitive price range to be in. The majority of properties in this price range can be found in Prince William County
• Most of the properties you’ll find in this price point are foreclosure/bank-owned and short-sale properties. But this price range is also very popular with investors so you’ll see investor flips/rehab properties on the market
• A buyer I’m currently working with had to go through countless properties and compete against over 50 offers before finally getting their offer accepted on one. One reason is because a significant amount of the offers being placed on properties at this price point are all-cash offers with no contingencies whatsoever. Trying to compete against cash offers with FHA, VA and even conventional financing offers is extremely tough – though it definitely can be done
• Properties in this price point that are priced at or below market value typically receive multiple offers within a matter of days so buyers have to jump on them as soon as they hit the market
• I have seen properties in this price range in some areas sell for 10 to 20+ percent more than they did at the beginning of 2009
• If you’re a buyer, expect to see 5, 10, 15+ offers on well-priced properties. But don’t be scared or intimidated by that – just make sure you have some extra patience and are ready to jump on a property you like as soon as it hits the market. And if you don’t get it, don’t be too down – it happens a lot at this price point. You have to just keep plugging along
• If you’re a seller in this price point, you’re sitting pretty and can expect an offer quickly if you’re priced correctly

$150K to $350K

• This is also a very competitive price range to be in. Properties in this price range are a mixture of foreclosure/bank-owned properties, short-sales and traditional resales
• The type of properties in this price range depends on how close or far you get away from Washington, DC. The closer you are to DC, the smaller and/or older of a property you typically get
• Cash offers are also becoming more common in this price range though not as much as in the sub$150K price point
• I have seen properties in this price range in some areas sell for 10+ percent more than they did at the beginning of 2009
• As a buyer, expect to compete against many other offers especially on properties priced at or below market value
• As a seller, you’re still sitting pretty as long as you price your property correctly

$350K to $500K

• This price range is also competitive especially within the Beltway. Properties in this price range are also a mixture of foreclosure/bank-owned properties, short-sales and traditional resales
• Though there are fewer instances of cash offers in this price range, they’re still out there. Though you may not be competing against 10+ offers as is common in the lower price points, I’m still seeing a handful of offers on well priced properties
• I have noticed values in this price range remain steady with some areas showing a slight increase in values
• As a buyer, expect to compete against other buyers on well-priced properties. You should be aggressive and jump on a property that interests you as soon as it hits the market
• As a seller, you’re still in a price range that has a decent amount of buyers in it. But don’t get greedy because of that fact – you still have to market and price your property correctly

$500K to $700K

• This price point puts the majority of buyers into the ‘”jumbo” loan/financing category (financing over $417K), which makes for a smaller number of buyers. The reason why is because it’s harder and more expensive to secure “jumbo” financing these days. Fewer buyers means less competition though there are still so few properties on the market that it’s still competitive
• Nevertheless, buyers are out there. A recent listing of mine in Broadlands has many buyers come through as soon as it hit the market and it the sellers received and accepted an offer within 10 days of being on the market
• Most of the properties in this price range are short-sales and traditional resales though you may see a foreclosure/bank-owned property here and there
• Though cash offers are rare at this price point, they’re still out there. I had a buyer who put 20 percent down, use conventional financing and offer the highest amount of all the offers lose to a lower priced, all cash, non-contingent offer
• I have seen values in this price range remain relatively steady since 1/1/09
• If you’re a buyer, you still have to be aggressive on finding and buying a property in this price range. But it’s definitely not as crazy as the sub-$350K range
• If you’re a seller, make sure you’re aware of your competition/other homes on the market so that you price your property correctly and adjust to comps and new properties as they come on the market. The higher the price range, the more important it is to have an experienced and knowledgeable Listing Agent working for you

$700K to $900K

• This is where the pendulum starts to swing the other way a bit (generally speaking). Properties in this price range tend to stay on the market longer and have fewer buyers competing for them. Nevertheless, if the property is priced at or below market value, buyers will come out from everywhere
• For example, there was a foreclosure/bank-owned “McMansion” in Fairfax listed just last month that was priced at $722K. This was an incredibly attractive price because the property was worth well over $800K. A buyer I’m working with offered $800K using conventional financing with a down payment of 30 percent. Their offer was not chosen because the winning offer was…take a guess…all cash, non-contingent. (Yes, someone paid $800K+ cash for a house)
• The example I just gave is not isolated to Fairfax – it’s happening in Loudoun and across Northern Virginia
• I have seen values in this price point remain steady or go down since 1/1/09 depending on location and how hard the particular community has been hit with foreclosures and short-sales
• As a buyer, this price point can be good and bad. It’s good because the market is not as crazy as the lower price points. But it’s bad because there is so little inventory on the market to choose from. You may have to wait weeks or even a few months before a property that fits your criteria. Some of my buyers have made adjustments to their criteria so they can have more properties to choose from
• As a seller, price and marketing are key in this price range. Make sure your Listing Agent is knowledgeable and is on top of your local market

$900K+

• This is the least competitive price range especially in Loudoun County. Properties in this price range in Loudoun have been known to be on the market for months and months. As you get closer to DC, the average days on market is less, but still much higher than lower price points
• Some of the properties in this price range are foreclosure/bank-owned properties, but most are short-sales and traditional resales
• This price range is still showing signs of weakness and depreciation especially the farther you get from DC
• If you’re a buyer, you’re in a good position in this price range. There are few buyers that are in the market for a $900K property and a fairly decent amount of inventory for you to choose from, including new construction
• If you’re a seller, you’ve got an uphill battle especially in Loudoun County. Be patient and realistic when selling your home. Even more so than in any other price range, make sure you have a knowledgeable and aggressive Listing Agent who will market your property correctly and will price it where it should be to get an offer

Please remember that these are general market conditions. To find out what the housing market conditions are within your community or the area you are interested in buying within, click here to contact me so I can provide you with the specific details and statistics.

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