Front Lines

Things were a bit slower in May but June was a very robust month in the market.  The single family market saw inventory increase from 62 in April and 41 in March to 71 in May, then drop back down to 56 in June.  This is less than the 72 homes available in June of 2011.   The number of sales was consistent with 39 homes coming under contract in June compared to 32 in April, 33 in May and 33 in June of 2011.    The average list price of what has sold stands at 528,102, up from last year’s (total year) of 501,725.   The average Days on Market increased to 43 from 23 in April and 32 in May but still well down from June of 2011 where it stood at 62.   So while we may be turning our single family inventory over in just over 30 days, with 56 available and 39 sales in a month we have an absorption rate of over just about 1 1/2 months.  The townhome market is looking stronger than the single family home market.  The average Days on Market is 27, up slightly from last month’s 26 and the exact same as June of 2011.  68 townhomes came under contract in the month of June, 10 more than the 58 we sold in May and 9 more than the 59 in April but still not the 76 we saw in March.  It is also down from last May’s 86 but ahead of last June’s 61.   I attribute that to the decrease in available inventory.  Currently there are 49 townhomes available, up from 36 in April but well down from the 72 we had in June of 2011.  So townhomes are turning over in less than 30 days and there is less than a month’s worth of inventory on the market.  The average LIST price of the townhomes that have come under contract so far this year is 296,675 which is up from the 288,486 average for all of 2011.  Another bright spot is that the number of distressed properties (short sales and foreclosures) is still way down from last year with only 8 spread across all the pricing categories!   

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

Out on a Limb

As we go into May I expet changes to come to our market. those sellers that are in a "have to sell" situation will see the summer market looming as Memorial Day approaches and they will realize they're missing the spring market. I expect them to get more aggressive in their pricing. The activity level in May will dictate how early it starts and how aggressive they have to price to get out in front of the market. If the level of activity we saw in April continues then we should be fine; but; if that was the extent of the rlo bubble we typically see, then we will not be. My opinion is that as consumer confidence comes back a bit we will see those fence sitters get into the market. Our stats LOCALLY are great with good employment numbers, good wage numbers and a slow but steady improvement in housing prices. Relocation may be a bit stagnant as they are held back by the real estate market in their part of the country as well as being incluenced by that area's market. It takes a bit of time for them to realize that they are not in Kansas anymore and our market is safer and more dynamic than "back home". The short sale market is very active and we are seeing the bank processes improve...finally! Each bank is different but we took one from contract to close in just 63 days already this year. Negotiation on these short sales represent about 15-20% of our business and, knock on wood, we have a 100% success rate! Ok, the short answer to what I see in the next 30-90 days, the upper end of the market will stay steady and it has been good so far this year. The below $400,000 market will also continue to go strong and should actually improve. The middle of the market place will see average activity and hopefully an increase as confidence comes back a bit. Homes that have been on the market 30+ days, homes that have an impacted lot or a condition issue with motivated sellers will adjust their pricing down. I do not expect to see rates move dramatically in the short term but we are continuing to see new requirements and restrictions coming out affecting affordability. As we head into the summer months we typically see inventory start to decline and we typically get a little bubble of activity as relocation procrastinators rush to get in before school starts. As the market continues to unfold I will, as usual, keep you informed.

Front Lines

The spring market thus far has certainly kept us guessing. January & February gave every indication that the market was poised to take off but then Mach fizzled. April's numbers picked up again but are still not where we hoped they would be. The number of available townhomes continued to drop from 72 in March to 58 in April. the bad news is that the number of properties coming under contract dropped as well from 81 to 64. (Compare that to the 123 we sold last April due to the stimulus incentives!) The average Days on the Market also continued to improve dropping to 29 in April from 39 in March and 48 in February! So, while the number of contracts dropped, the inventory and days on the market continued its decline which is positive overall. The single family sector actually went the other way with inventory continuing to increase substantially to 65 in April from 50 in March and 37 in February. The good news is that the number of contracts came back from March's dismal 27 to 39 in April. Given that, march and April are the big months of our spring market. This is not the best but it is an improvement. Our market could be languishing for many reasons; the turmoil in the Middle East, gas prices, uncertainty over the budget or just because we have not been able to string two days of nice weather together over a weekend. Any or all of the reasons or something I am not even aware of could be the issue but the root of the problem is consumer confidence. Buyers are scared to make a decision and they are plucking off the exceptional values or the exceptional properties and sometimes even those are sitting. Decisions can only be delayed for so long and those that are suffering from the paralysis of analysis will wind up missing the best our market has to offer. The number of foreclosures as a percentage of available inventory has continued to drop. The number of short sales has increased although overall the percentage of distressed properties has fallen. Hopefully in May we will see the increased activity of April at least continue. I will as usual keep you informed as our market continues to unfold.

Out on a Limb

March will be a busy month. I look for inventory levels to increase dramatically but I also expect to see the number of contracts written jump as well. Inventory will go up as sellers try and time their move to the end of school. Relocating buyers will start to enter the market and some already have. They tend to come here on a house hunting trip, look at everything on the market, pick a house, write an offer, negotiate and complete the inspection all in a 5-7 day time frame. Once the sold signs start popping up we will see those who have been watching suddenly go under contract. In addition relo buyers jump start the move up market as well. Rising gas prices and the new problems over seas have shaken consumer confidence just a bit but I expect that confidence to come back once you start seeing the old signs. I expect the number of new listings entering the market in March to be 50% higher than Jan & Feb. I believe our pricing will continue to climb slowly this spring and then level out during late summer and fall at worst. Buyers that have been in or watching the market for the last year or so will be disappointed if they expect to find the same prices this year that they passed on last year. Our market has moved in a positive direction already and when the smoke clears I am hoping that the number of contracts written in March will also increase by 40-50% as well maybe more depending upon the depth of the pent up demand. To see numbers comparable to last year's stimulus fueled spring would not surprise me at all. Rates should remain relatively stable and as long as there are no more surprises on the horizon we are poised for another year with continued improvement. As our market continues to unfold, I will as usual keep you informed.

Front Lines

So far the year has started off much as we expected Townhome inventory has continued to rise and is up 56% over last year at the same time. (79 om 2-11 vs 51 om 2010) This dropped in February to 79 available from 85 in January which is something that I would like to see continue. The average list price for a townhome is currently $293,018 which is up noticeably from $267,749 in 2010. So while inventory has grown so has pricing which means (hopefully) that we will see the move up market keep traction and continue as more sellers finally have enough equity to be able to sell and buy again. The single family market has remained consistent and inventory has remained relatively unchanged (37 vs 36) since the same time last year. This is good as inventory had crept up to noticeably higher levels in fall of last year. I do expect that to change significantly in March and many of those homes that came off the market for the holidays will come back on. The number of contracts written dipped to 37 in February from January's 44 but it is still consistent with February of last year's 36 sales. That is significant in that last year we had the stimulus in place and this year we do not. So if demand stays consistent with last year them are seeing the turnaround sustain itself under its own power. We have already run into one low appraisal on a property and while we have worked that out it gives us pause. It does indicate that demand is strong enough to support some increase in pricing but we need the appraisal industry to share the main level of confidence. Mos t of the sellers that weathered the winter months and cane into the year with lower pricing are now gone and the new wave of sellers are more optimistic with the best selling months in front of them. Those homes with great lots in great condition are gone quickly but buyers are passing on those homes that require them to compromise in any way. They are waiting for "something better" to come on the market this spring. At some point, and I expect that to come in March, they will realize that a little compromise is part of the purchase process. Once we start seeing old signs we will see some of these fence-sitters enter the market although they will most likely have missed the best values. Those that keep waiting thinking they will find a value comparable to last fall will miss the boat entirely. It is an exciting year for real estate and as our market continues to unfold I will, as usual, keep you informed.