Out on a Limb

Our team’s activity level from the last half of 2011 carried over into the first part of 2012. We have already received multiple offers on two of our listings. We are busy! I look for at least the first half of 2012 to do very well as buyers take advantage of low rates and low prices. The word is finally getting out that our market has seen the bottom so some pent-up demand is being released. As of this writing unemployment for Fairfax County is 4.2% compared to 4.5% for the entire Northern Virginia area and 8.6% for the nation as a whole. A total of 18,600 jobs were added in the metropolitan area and over half of them were in Northern Virginia in 2011. The BRAC results also bought a net new job gain of 14,000 to the area. This bodes well for 2012 to be a great year. Election years however, are always difficult to predict. I have been in the real estate business for seven presidential elections and our area is different than the rest of the nation. We enjoy a stronger real estate market and lower unemployment than the rest of the nation because our largest employer is the federal government. Most folks around here are tied directly or indirectly to government contracting. Elections years bring stress and uncertainty to our area that the rest of the country does not feel. That hurts our local consumer confidence and will put some folks on the fence that otherwise would be moving.
I expect that to affect our market somewhat especially as the election nears. So, to truly go out on a limb with my predictions for the 2012 real estate market I would say that rates should stay stable for the year although an increase is likely as we get nearer to the election. It will still be a cumbersome and frustrating process to obtain a loan and I look for that to get worse before it gets better although I do look for some more flexible loan programs to start popping up. Consumer confidence should stay strong as will our market for the first couple of quarters anyhow and then we will see things slow down noticeably. Short sales will still be a part of our market but foreclosures will continue to slow. Pricing will trend upward in the first half of the year but level out for the last half. I look for the number of sales to increase slightly over all as well. This is just my opinion of what the future holds and as the 2012 market unfolds I will as usual keep you informed.

2011: YEAR IN REVIEW

2011 was certainly a challenging year. I would like to say that we saw improvement in the market across the board but that was not the case. Over the entire Northern Virginia Marketplace the number of homes that were sold dropped by 11.54%, from 18,881 in 2010 to 16,703 in 2011. The good news is that the average sales price increased by 3.04% to 483,189 from 468,919. Centreville’s numbers held pretty close. First, the townhome market, the number of homes sold dropped from 814 in 2010 to 720 in 2011, a drop of 94 sales. The number of homes listed dropped as well though by 143 homes so over all we sold a higher percentage of our town home inventory. The average list price of the homes sold reflected that increasing from 258,578 in 2009 to 273,962 in 2010 to 288,486 in 2011, a nice little bump in price! This was the 2nd straight year we have seen appreciation in the townhome sector! It did take a little longer to get that though as the average days on market increased from 30 in 2010 to 40 in 2011. There was an average of 75 townhomes on the market in any given month up from 73 in 2010 and 72 in 2009. Single family sales did not fare quite as well. The average list price of the homes that came under contract dropped to 501,725 in 2011 from 506,175 in 2010. We had seen an increase in 2010 to the 506,175 number from 477,894 in 2009. The number of sales also dropped from 366 in 2010 to 328 in 2011. We should note though that the number of new listings coming on the market dropped as well by 66 homes year on year. The average days on market jumped significantly (50%) to 71 in 2011 from 47 in 2010. There was an average of 58 single family homes on the market in any given month down from 60 in 2010 but up from 55 in 2009. So to sum it up the townhome market did well and continued to improve in 2011 while the single family home market stalled somewhat. You would have thought that given the improvement in our townhome market the same would have translated into more sales in the single family sector but that was not the case.
The continually changing loan process added to the stress level and had a significant impact on our market. Obtaining financing is exponentially more difficult now than it has been in past years. The added layers of review and accountability coupled with new and more restrictive qualifying criteria has just created havoc in the marketplace. We work with some of the best in the business and even they have had their problems. We are glad though that we have them as we did not miss getting one to closing! If you are looking for purchase money or looking to refinance, be patient, be prepared to document everything and be organized. The good news on the financial front is that rates were at all time lows and stayed there all year long. Low rates and low prices have made this a wonderful year for buyers. New homes came roaring back in our area. Builders are building and they are selling very well. Lots of activity in sites that were dormant for the last 3 years. I do believe this has had an impact on our single family sector sales for those folks that don’t have to stay in the Fairfax County school system. Foreclosures and short sales were still a part of our market but have continued to be a smaller and smaller part of it, especially foreclosures. Our market is strong enough to absorb the short sales so they never get to foreclosure. Demand for rental has continued to grow leading to increased rental prices. This must stabilize as now it is cheaper to buy than it is to rent in many places! The spring market was slower than what we had hoped but the last 2 quarters were stronger than we thought they would be so overall 2011 turned out to be a pretty good year. Just as we predicted in January it was more of the same we saw in 2010. We look forward to all that 2012 has to bring and as usual we will keep you informed as the market unfolds