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Business & Tech

Summertime, and the Buying Is Easy

Local realtor discusses BRAC's potential impact on the Mount Vernon real estate market.

The lazy days of summer have officially started.  For real estate this means fewer showings for homes as buyers (and agents) take vacations, meet other commitments and devote less time for housing.  A slow market translates into sellers being more willing to bargain on their prices.  The numbers of buyers and sellers bumps upward again as Labor Day weekend approaches and the Fall market begins.

Now that we’re beyond July 4th, we are in the thick of the summer slowness and the numbers for 22309 reflect that decline.  Looking back at the sales for April and May (June’s numbers have not been released yet), we can see the beginning of the downturn.

In April, the total volume sold for the zip code was just over $11 million, with 36 closed sales, a median sold price of $257, 500 and an average sold price of $311,666.  By the end of May, the total sold volume dropped to just over $8 million — a 26.36% drop.  Also, there were only 32 closed sales, the median sold price dropped 13.59% and the average sold price dropped 17.16% from April.

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Even though volume and prices dropped overall, prices have moved more in line with buyer expectations.  This is clearly indicated in the fact that sellers in April were only getting about 92% of their original list prices, whereas by May sellers were getting nearly 98% of their asking prices.  Sellers have adjusted to market conditions by becoming more realistic in their pricing, leaving less negotiating room for buyers.

Condominiums and townhomes below $300,000 were the big sellers in May whereas detached homes in the $400,000 to $500,000 range sold more in the month of April.  This shows that the spring was a good time for single family home sales and as we reached towards summer, investors and buyers were active in purchasing lower priced properties.  In both April and May the numbers of all cash as well as FHA (Federal Housing Administration) financed buyers outpaced the number of buyers with conventional loans.  Some believe that the upcoming Base Closure and Realignment (BRAC) process at Ft. Belvoir will mean windfalls for the area’s real estate and are trying to garner an advantageous position for the possible upcoming market. 

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It remains unclear how many new people will be moving to the area and how the influx of new traffic, particularly with the new hospital opening, will impact housing.  Many commuters may decide that the traffic is too difficult to fight and choose to relocate to 22309 and Mt. Vernon.  We will have to see.  At this point, the numbers of possibly relocating populations is modest at perhaps around 500 new families, according to sources at Ft. Belvoir — a far cry from what some thought several years ago, when there were reports of thousands moving this way.

It is also anticipated that formerly reluctant buyers will finally jump into the market before FHA loan limits are decreased on October 1, making it difficult for some to secure a loan.  This is because loan limits determine what types of mortgages may be FHA securitized or insured. Loans that fall outside of the limits face tighter credit requirements, higher interest rates and larger down payments.

If you are looking to buy, now looks like a good time.  Interest rates remain low, demand has temporarily subsided due to seasonal factors and prices are still generally trending downwards.  Once the fall hits, the new FHA loan limits change and BRAC relocations begin, we can expect to see a bump in sales and prices and perhaps the beginning of a slow and sustained overall recovery in our housing market.

May 2011 Real Estate Market Statistics for Mount Vernon 

Statistic

Values

YoY

MoM

Total Sold Dollar Volume

$8,262,135

-43.49%

-26.36%

Closed Sales

32

-30.43%

-11.11%

Median Sold Price

$222,500

-24.58%

-13.59%

Avg Sold Price

$258,192

-18.76%

-17.16%

Avg Days on Market

27 days

-38.64%

-71.88%

Avg Sold to Orig List Ratio

97.97%

+1.9%

+6.39%

 

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