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.

Sub-$300K Loudoun Housing Market Remains Hot

The $300K or less housing market in Loudoun County continues to be hot. Properties in this price point are often selling within days and buyers are rushing to see the properties and put an offer in before they’re gone. For sellers, this a good thing. For home buyers, not so much.

Buyers

Just ask any of my first time home buyers or investors looking to pick up a property in that price point and you’ll see their facial expression change instantly. Why? Becuase the process usually goes something like this…

• The property is typically a short-sale or foreclosure
• The asking price is below market value so that the seller/bank will get an offer as quickly as possible
• Multiple offers are received on the property within 48 to 72 hours – sometimes up to 10+ offers
• Many of these offers are cash offers from investors with no contingencies and able to settle within 2 weeks
• Many of the offers are for more than the asking price because the seller/bank has purposefully priced the property below what’s it’s really worth
• Even though your offer (with financing) may be higher in price, the seller may go with a lower priced, all-cash offer because it’s less hassle with a higher chance of closing

Does this mean that first time home buyers in Loudoun County can’t compete with investors?

No. It means that road will be tough and you will need to have a lot patience. You will most likely write several offers on several different properties before your offer gets chosen. Despite the road being tough, every first time home buyer and investor I have worked with in this price point, both in Loudoun County and the rest of Northern VA has eventually found and bought a home that they love and that works for them.

Does this mean that investors will drive first time home buyers with financing out of the market?

Yes and no. Yes because I have heard from other agents that their first time home buyers have either given up from frustration or are waiting for the market to become less hot and cut throat before getting into it. But there are still plenty of first time home buyers out there that are patient and have prepared themselves well for this market through research and/or through their Buyer’s Agent.

Sellers

• There is a lot of demand for properties in the sub-$300K price range (aka lots of buyers looking at your house)
• Even if you’re house needs work, if you price it accordingly, buyers and investors will buy it in its’ current condition
• If you price and market your property correctly, you will have an offer, if not several offers in your hands within days
• If you have multiple offers, you are able to pick the best one that fits your specific situation and needs rather than picking the first one that comes through

Does this mean that sellers can price their property for more than market value and get away with it?

No. Sellers should be confident and smart, not greedy. Buyers are smart – they know what market values are like whether it be from their own research or their Buyer’s Agent providing them with comps (aka the sales price of similar homes that have sold in the same community within the past 90 days). Buyers would rather pass on an over priced property and wait for a properly priced property than spend more on a property than what its’ worth.

Does this mean that sellers should accept an all-cash offer rather than one with financing?

Not necessarily. Seller should always look at the big picture and the small details of every offer. In most situations, an all-cash offer is most desirable. But not every situation nor every all-cash offer is the same. Sellers and their Listing Agent should discuss the pros and cons of each and every offer before making a final decision on which one to accept.

Need more info or a list of homes for sale in the sub-$300K market? Contact me via email or on my cell and I’ll be glad to help.

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.

The Latest Loudoun County Housing Inventory Statistics

The number of homes for sale in Loudoun County (and the entire DC metro area) is definitely either down or trending down. Let’s look at the following charts showing inventory levels of single family homes and town homes in the Sterling, Ashburn, Leesburg and South Riding/Chantilly areas:

(Note: These are new interactive flash charts – feel free to play around with them, move the slider around, etc., and let me know what you think)

Sterling

Ashburn

Leesburg

South Riding/Chantilly

Home Buyer Demand, Sales Up Across Loudoun and Fairfax County

Home buyer demand/sales in Loudoun County were up 11 percent in the 3rd quarter of 2009 over the 3rd quarter 2008. And it’s up 53 percent over 2007. (Buyer demand is defined by the number of homes that go under contract during a set time period)

Fairfax County had an 18 percent increase in home buyer demand/sales in the 3rd quarter 2009 over 2008. And it’s up 62 percent over 2007.

Why the increase?

1. Lower prices – prices have come down considerably since the peak making it more affordable and appealing for home buyers. And the less expensive something is, the more people can afford it
2. Low interest rates – interest rates hit historical lows and are still very low. Lower interest rate = greater purchasing power
3. Programs/benefits – Programs such as the $8000 first-time home buyer federal tax credit has helped spark demand (click here for more info on first-time home buyer tax credit). I’ve worked with more first-time home buyers this year than in any of the last 6 years (and it’s only October). Other programs such as the Freddie Mac HomeSteps SmartBuy program have also helped increased demand (click here for more info on Smartbuy program)

Will it continue?

Maybe. If rates remain steady and/or the tax credit get renewed or a similar program come out, then we’ll probably see home buyer demand steady or continue increasing (though I don’t think there’s room for too much more increase in buyer demand).

Maybe not. If rates creep up and/or the first-time home buyer federal tax credit not be renewed and/or (more) bad economic news come out, we may see buyer demand taper off or even decrease.

Who wins?

The buyers that purchased a home at a much lower price than years prior and at a low interest rate while taking advantage of the first-time home buyer federal tax credit made out the best.

Sellers came in at a close second – increased demand and very low inventory make for a winning combination when selling your home.

Leesburg Single Family Home Median Price up $35K

The median price of single family homes in Leesburg (20175 and 20176 zip codes) has gone up $35K since April. With inventory down 33 percent since 9/08 and buyer demand up, median prices have gone up. You can feel the effect of this in the housing market conditions in the area – Buyers have less inventory to choose from and more competition from other buyers while sellers are seeing more buyers coming through and competing for their property (if priced correctly) than since 2005.

Leesburg Single Family Home Median Price – up $35K

Leesburg Single Family Home Inventory – down 33 percent

Good News For Home Buyers Using FHA Financing!

Good news for  home buyers using FHA financing! The Federal Housing Administration (FHA) has no plans to implement the Home Valuation Code of Conduct (HVCC), which has been the cause of a wide array of problems for home buyers, sellers and lenders.

The FHA is looking at alternatives to the HVCC it feels would insulate appraisers from pressure from lenders while not hurting consumers and lenders.

I’m all for keeping lenders from pressuring appraisers to “hit the number”, but the HVCC is not the way to do it. Glad the FHA realizes this too and that it’s taking steps other than adopting the HVCC to accomplish this.

If you are thinking about buying a home and using FHA financing, there are several great FHA lenders in the area you can speak with. Email or call me and I’ll send you a list (click here to contact me).

“On The Streets” of the Loudoun County Housing Market

You read the news and see the statistics. You hear what you’re neighbors and friends are saying. But what is really happening “on the streets” of the Loudoun County housing market?

Here you go…

Buyers looking to get a great deal on a property are seeing well priced properties sell within weeks if not days of coming on the market. Many very well priced properties are seeing multiple offers and bidding wars – 2, 5 even 10+ offers. Many buyers are bidding on 2, 3 even 5 properties before finally having the winning offer and buying a house.

Sellers who price and market their property correctly are seeing lots of buyers coming through their property almost immediately after coming on the market. An offer within the first few weeks on the market is common for properly priced properties. On the other hand, no activity and no offers is the norm for overpriced properties. In a nutshell, Value is King.

We’re also seeing an up-tick in median prices in some areas of Loudoun County (as well as some areas of Fairfax County) – though this does not necessarily reflect an increase in any one specific property’s value. Take a look at the latest statistics regarding median prices and inventory levels in different parts of Loudoun County to see for yourself.

The local market is such because inventory levels (number of homes on the market) have decreased an average of 50 percent since 2007 and an average of 20 percent since this time last year. At the same time, buyer demand (aka number of homes being sold) has increased by an average of 50 percent thanks to historically low interest rates and the $8,000 first-time home buyer credit. This translates to more buyers trying to buy the same type of property, but there are less homes to choose from. But even though more buyers are fighting over fewer properties, buyers are not being suckered into or getting frustrated to the point of overpaying for a property.

Note: Despite the majority of the Loudoun housing market showing signs of stabilization, the $1M+ home sector is not fairing as well. Inventory is stagnant as is buyer demand. This is bad for sellers of $1M+ properties, but good for home buyers in that price point.

Another trend we’re seeing is a substantial decrease in foreclosure/bank-owned inventory on the market (thanks to the foreclosure moratoriums of late 2008/early 2009) and a significant increase in short-sale inventory. This has led to increased frustration on the part of buyers and agents some of whom are not familiar with the nuances of short-sale transactions and don’t know how to properly navigate through such a transaction. Getting a response from the bank(s) on a short-sale can take as little as 45 days and as long as 6 months with the average being about 90 days (more on this in a future post over at LoudounForeclosures.com).

Up until this year, many real estate investors were sitting on the sidelines as median prices continued their downward trend and good investment opportunities were rare. But that has changed. We’re seeing investors getting back into the market buying up distressed properties, doing rehab on them and then either flipping them for a 10 to 30 percent profit or renting them out as part of their long-term investment plan. Investors are especially prevelant in parts of Sterling and Leesburg.

And that folks, is the reality of the Loudoun (and Northern Virginia) housing market.

If you would like me to go into more detail or need information about a specific town, neighborhood or subdivision in Loudoun (or north/east Fairfax County), feel free to contact me.

Sterling Housing Market Update

Here’s a look at what’s going on with the Sterling housing market (all zip codes)…

Sterling Median Price

The median price has been falling in Sterling since the market turned until about March of this year. Over the past rew months, the median price has spiked significantly (by almost $100,000).

Sterling Inventory

Inventory of single family and town homes in Sterling has dropped by 60 percent since 2007 and 56 percent since this time last year. The condo inventory in Sterling has dropped by 45 percent since this time last year. This is most significant decrease of inventory out of any large town in Loudoun County.

Sterling Housing Market Overview

The huge drop in inventory throughout Sterling along with a huge increase in buyer demand has lead to a huge shift in the housing market in Sterling. Sterling has some of the lowest price points in Loudoun and lots of foreclosure and short-sale activity making it extremely attractive to first-time home buyers and investors. We’re even seeing areas of Sterling with slight to substantial recent price appreciation.

Homes that are priced well are getting a lot of traffic and a purchase offer within 1 to 2 weeks on the market. Homes priced slightly below (or way below as is the case with many bank-owned and short-sale properties) are getting multiple offers (5, 10, 15+ offers) and are bidding up over asking price within days, if not hours of hitting the market.

We’re seeing slight signs of the inventory leveling out. Unless it levels out, we’ll most likely see median prices continue their upward trend and lots of multiple offers on properties well into the summer.

South Riding, 20152 Housing Market Update

Here’s a look at what’s going on with the South Riding/20152 zip code housing market…

South Riding/20152 Zip Code Median Price

The median price for single family and town homes in South Riding/20152 zip code is showing a slight uptick after having dropped over 70 percent over the last 2.5 years. We’ll need to see some more evidence of median prices going sideways or up to call it a trend.

Condo are in the same boat as single family and town homes. After having dropped over 60 percent over the last 2.5 years, they showing slight signs of stabilizing. We’ll have to wait and see what median prices do this summer and fall before coming to a more firm conclusion.

South Riding/20152 Inventory

Inventory of single family and town homes spiked like crazy in the 2nd quarter of 2007 and South Riding/20152 zip code has been working it off ever since. Inventory of single family and town homes is down over 40 percent from July 2007 and down almost 20 percent from this time last year.

Condo inventory spiked way up, then went pretty much sideways for a year and is now down almost 40 percent from this time last year. It’s gone up slightly over the past two months, but appears to be going sideways at the moment.

South Riding/20152 Housing Market Overview

The South Riding and 20152 zip code housing market is a bit more volatile than other markets in Loudoun County because it’ has less total properties within its’ boundaries with everything from condos to large McMansions. The lower price points are selling faster and at a higher rate.

Much like the rest of Loudoun County and Northern Virginia in general, if the property is priced well, it will sell in less than 30 days. If it’s not priced correctly, it’ll just sit on the market collecting dust.

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