What Part of “Bottom of the Market” Do You NOT Understand?

I was looking over the supply of houses on the market this week in Fairfax County and it’s really getting dangerously low. Compared to May of 2008, we have 55% fewer homes on the market – and 20% more contracts written on them. That leaves home buyers with only a 7-week supply of houses and it’s getting smaller. Officially – we’re in a sellers’ market. For pocket markets (townships, subdivisions, etc.) it’s as hot a market as it was in the peek of 2005-2006 – it’s just that the prices are much lower. Ergo – the opportunity. If you’ve ever heard about buy low, sell high – now is the time to buy low.

If you are sitting in a house purchased in 2000 or earlier, you’re most likely sitting on a lot of equity that could enable you to move up to a larger home with the upgrades you’ve wanted but couldn’t afford. I know – this sounds like a sales pitch – but frankly – it’s just the simple truth. Sellers and buyers have a unique opportunity to purchase a house at prices that have been backed up several years and at interest rates not seen for decades (currently in the mid-5% range).

The average price of a 4BR, 2BA house in Springfield, for instance, sold for $235,665 10 years ago. Today, that same house sells at $371,549. While this price is down from the last five recent years, the pricing has leveled and starting to rise in pocket markets throughout Northern Virginia.

And if you’re wondering if the market has turned around consider this – the average days on market for that house in Springfield is down to 18 days. That is not a misprint – NOT 180 Days, but 18 Days – a little over 2 weeks. Many other towns in the area are in the same situation.

So what? Inventory is slipping – we need more houses on the market to meet today’s demand. Buyers are competing again for houses that look good and priced right. Consider two choices – 1) make the move up (or down) now, while prices are stable and interest rates are low; 2) invest at a time when the rent will cover the monthly payment.

While the local papers and television stations report on a dropping market nationwide, it’s not the case for the real estate market surrounding the White House. DON’T MAKE A LOCAL DECISION BASED ON NATIONAL INFORMATION. For more information about your market, call or email me at the numbers below.