Don’t be distracted by the gnarly old tree, this is a picture of a fence. They are uncomfortable to sit on and people tend to be on one side or the other. It sure seems like this is where all the buyers are right now and it’s kinda tough to understand. Let’s take a look…
Inventory isn’t an issue. Earlier this year during the peak selling season there were only 1346 homes on the market. As I write this post today there are 1613 active listings (excluding new construction) with just a few short weeks left in the fall season. How about interest rates? This morning a 30 year fixed mortgage is 3.94%, just barely above the 52 week low of 3.90%. That’s not it. How about the old adage it’s cheaper to rent? Not according to Zillow. The data from their breakeven report shows it takes just 4 years for the cost of renting in LoCo to surpass the cost of buying.
So the question is, what are buyers waiting for? (I know that’s grammatically incorrect, but I write the way I talk ;P) On October 3rd the Dulles Area Association of Realtors held an economic summit in Ashburn. Dr. Stephen Fuller, an economist from George Mason University, presented some compelling data as to why our market is recovering slower than other parts of the country. The gist of it was this, the shut down and subsequent loss of government contracts by local businesses has hurt our area more than usual. Many high paying job vacancies are being replaced too slowly and with younger people making much less than their predecessors. With home values continuing to rise (about 4% year over year), that’s a recipe for a sluggish market. So far this year there have been 298 fewer sales compared to the same time in 2013, a drop of 6.4%.
It may not be happening as fast as we like, but we are making our way back. The last four months have seen existing home sales heading in the right direction. Take a look at the chart below and you can see some positive signs.
The good news for buyers is we have a tremendous inventory of existing homes on the market and sellers are willing to negotiate. We are seeing many deals go through with closing cost assistance and it might even be worth asking to have your lease bought out. If you are concerned about financing, let us connect you with a few lenders who have earned our trust. At the very least you can learn about your options and be a better informed consumer.
The bottom line is it’s not too late to be celebrating the holidays in your new home. Hop off that fence and give us a shout, we’d love to help you take that first step.