Despite predictions of gloom and doom for the economy, the real estate market in Northern VA is showing signs that it may weather this pandemic very well, perhaps outperformed only by Charmin, Lysol and Purell.
Sales are strong, and the inventory is still tight. We’re still, over six weeks into this, seeing multiple offer situations and full price offers on homes. An open house last weekend (yes, an agent held a real open house – not one of our team) had over 30 attendees! Hopefully they were obeying social distancing rules. And buyers are calling us, saying they’re ready now and tired of waiting.
What is driving this strong market, despite the layoffs, stay-at-home orders, and general fear of a coming recession? The market was red hot prior to COVID-19, and the same factors that were driving that are still in place – concerns about rising home prices due to Amazon HQ2, phenomenally low interest rates, and a robust local economy giving buyers confidence. NOVA is blessed by an abundance of government, military and tech-sector jobs with steady paychecks and ability to work from home.
While some of the prospect buyers may have dropped out due to economic concerns, we’re now seeing “urban flight” – city and high-rise dwellers looking to the suburbs and even further out for a new “safer” home for their families. On top of that, the military moves which normally would have happened in March, April and May have been pushed to July – and those families are calling us now, desperately seeking a home for when they arrive for their assignments. While many of these prefer to rent, the lack of available rentals may turn some into buyers instead.
However, it’s not all great news. The mortgage industry is facing a real crisis right now. With looming defaults on payments, they are tightening up requirements for qualifying for a loan. It is becoming difficult for anyone with credit issues to qualify, and the cost to obtain some loans is going up, even as the rates stay very low. Lenders are being very cautious about offering loan approvals.
In reality, it will be the traditionally weaker areas of the housing market, that will be hurt the most – the type of buyer who may have credit issues, not a lot of savings in the bank – are also more likely to be the buyers who were laid off, or stuck at home with their school children, unable to work. Strong real estate markets such as Alexandria, Arlington, and even most of Fairfax County will fare well as long as the big employers – government, military, and the large corporations that revolve around them, keep sending out the paychecks.
If you wonder out the pandemic is affecting your real estate plans, give us a call. We’re happy to provide our expert advice and analysis.