At this time last year, real estate was coming to the end of a spring market that was active but not as dynamic as the spring of 2010 when the First Time and Existing Home Buyer Tax Credit program was in full effect. After last spring, 22309 saw a slow, steady decline in sales and an increase in days on market.
This year, we in the realty business are seeing significant activity and yes, bidding wars and escalation clauses! Have we gone back in time to the heady days of 2004? You may have heard some encouraging reports about the national housing market in general seeing some improvement. You have to look at the micro-level markets to analyze this properly. For instance, detached homes valued below $550,000, condos and townhomes have seen increases in prices and multiple offers. Anecdotally, I’ve had buyer clients this year where bid prices went $10-15,000 above asking price for townhomes in the area. The question then is, will it appraise? In many cases, buyers are willing to put up the extra cash or the sellers are willing to compromise since they are getting more than their asking price anyway.
The other good news is that overall, this April’s numbers show a nearly 8% increase in sold volume. The number of closed sales is up from last year by 14% last year and nearly 21 percent from March. The Days on Market have dropped as well as buyers are taking advantage of historically low interest rates and purchasing homes. At the end of April, the average days on market for a home was 52 days, down 46 percent from last year. This means that the inventory is low and buyers are buying as soon as they see something they like that comes on the market. Also, in almost all categories of homes, prices have either stayed the same as last year or increased. The largest increase in April was in the average sold prices of condos or attached homes with 2 or fewer bedrooms - a 307 percent increase. The second largest increase in prices was realized by detached homes with four or more bedrooms. Average sold prices for these larger homes increased by 14 percent over last year’s average to $544,408.
We are seeing a modest influx of buyers due to the Fort Belvoir realignment process and will hopefully see a steady flow of personnel into the area over the next twelve months or so. There many military coming here who are renting as well as buying. The rental market has certainly seen an uptick as demand has increased.
When it comes to selling a home, the three main poles in the tent are location, price and condition. Sellers must price their homes within market values to sell quickly – we haven’t actually returned to the days of the booming market. Appraisers remain stringent and if a house doesn’t appraise, then contracts can fall apart. What we’re seeing is sellers being realistic about the market, making the repairs and staging that they need to, then selling at a competitive price. By keeping the price competitive, more than one buyer jumps in.
Many sellers are also at the edge of what they can afford. Many bought in 2005, when the market peaked, and now face selling at a much-reduced price. Even with the recent activity, the market has not recovered to the prices of the 2005-6 peak. No economists see a recovery to those levels for years to come.
The summer is not showing signs of slowing down yet. June 1 is the official beginning of the summer market and there remains a lot of activity. With such a low inventory, buyers are still hovering and searching for what they want. These buyers are well-qualified as the banks continue to keep stringent controls on borrowing money. So, if you are considering selling and you have equity in your home and can be flexible with your pricing, then this market is worth jumping into!