Fall tends to be second busiest time in for home sales, spring being the first. Because of the influence of the Federal Government, the market in Northern Virginia differs from the rest of the nation. Here is a summary of what’s happening in the market and recommendations to property owners who might be considering selling their property.
This past summer has marked the second consecutive year of a market slump or correction in Northern Virginia. After 6 years of solid and steady growth from the low-point reached after the market crash of 2005/2006, we have seen sales and rentals begin a decline. The volume of new listings has remained steady, but the time it takes to sell or rent, and the final price, has experienced a drop from the highs reached in spring 2014.
Rentals in particular are suffering. While each neighborhood is unique, we have seen rentals that before would rent in 2 weeks now take one to two months. As a result, landlords and property managers are dropping rents to fill properties sooner. This may affect you if your tenant decides to move or has a transfer, and is something you need to be aware of and budget for.
Likewise the sales market generally has experienced some decline, although in select neighborhoods (Tysons, Reston, Vienna) sales are still strong. But in many areas we see a "buyer's market" - meaning that the buyer has the advantage in negotiating due to an excess of inventory (too many homes on the market). All of this results in falling prices and longer time to sell.
Why the slump? Real estate values normally trend up and down over a 5 to 7 year cycle, but factors affecting prices include the upcoming election, uncertainty about the economy, and the dramatic reductions in the Army and other federal agencies in the DC area. We are seeing far fewer moves into the area than in years past, and more transfers away.
Our advice to landlords - if the tenant is a good one (and most are!) we're going to work closely with you and the tenant to encourage them to renew the lease. By staying on top of maintenance and repair issues, and responding promptly to concerns, we hope to retain rather than lose tenants.
For owners wanting or needing to sell - timing is everything! If we can time leases to end in spring months, you'll be best positioned to take advantage of the strongest selling season. And waiting until after the elections in November 2016 might be the best thing to do. Our region traditionally sees a surge in sales after elections. For those needing to sell now, we are working diligently to present these homes in the best possible way, to get them under contract. This includes increased and creative marketing strategies, hosting more open houses, and working closely with you to make improvements to your home that will help attract buyers.
Another thing to consider if you must sell your property is the new system for going to settlement that will be implemented in October. The new settlement statement and procedure (TRID) will replace the HUD-1 which is what most people who have purchased a home in the past would have seen at their last real estate closing. Many of the last-minute details formerly handled by your Realtor and the title company will now be the responsibility of the loan officer/lender. The timeline for getting to the settlement table will change (slower) in the effort to avoid last minute changes and uncertainties. While the intent of these changes is to protect the consumer, we in the real estate industry are watching carefully to see that in practice, there will be no adverse effect on our clients. For more on this new procedure, see
http://www.realtor.org/articles/new-disclosure-forms-alter-transactions.
Need more information about the current market?
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