Time to Rent or Time to Buy?
Spring of 2015 is shaping up to be a great time to buy in Northern Virginia. Traditionally we see an aggressive Seller's market this time of year, but not so much this year as in the past. Inventory is very tight in some neighborhoods, and not so much in others.
1. Low Interest Rates: Interest rates are remaining at historically low levels, with most buyers able to lock in below 4.0%. While the Feds keep threatening to remove restraints that are keeping these rates artificially low they have not done so yet! There are tons of great loan products available today and even people with marginal credit are able to secure loans under some of the programs offered. When rates do finally start to rise, many first time buyers or renters may find themselves priced out of the market or able to buy a lot less than they had hoped. We are seeing more and more tenants make the move to buying a home this Spring. Unsure if you qualify or how much home you can buy? A 15 minute call with a good, local direct lender will give you all the information you need.
2. A slower Seller Market: Spring is traditionally the time of year in our area when we see a crazy Sellers' Market - multiple offers, very low inventory, and even escalation clauses. Except in some of the hottest neighborhoods (Tysons, Del Rey, Kingstowne, for example) we are not seeing as pronounced a "hot" market this year as in years past. Reasons? One of the big ones seems to be low appraisals, due to the slump we saw in prices in the last half of 2014.
Appraisals tend to lag behind the market and can hold sales prices down. Since appraisers use sales from the past several months, and are being forced to use the low Fall/Winter 2014 home sale prices, we are seeing sale prices this Spring rising more slowly. This is great news for anyone wanting, or needing, to buy at this time of year!
3. Instability in the Rental Market: Just as more and more people in
Northern Virginia seem to be moving into buying a home, it seems more and more Landlords are ready to sell! We are seeing an unusually high number of owners informing tenants that they'll sell rather than extend the lease. Why is this happening? For many Landlords, it's because the market has finely risen high enough that those who bought at the peak in 2005/2006 are able to finally sell and break even. For many, it's just time for the "bleeding" to stop - paying more in mortgage each month than they are getting back in rent. We receive calls or emails daily from tenants who are being displaced because their owner is selling. In some of the more desirable neighborhoods (Orange Hunt, Vienna, Waynewood, for instance) it is almost impossible to find another home to rent. Buying may be the only option for some of these displaced tenants!
3. A great time to buy a "new built home": The New Home market is booming in the western and southern parts of Northern Virginia, as the Metro expands westward and major road improvements along the Rt 50 and I95 South corridors are well underway. Traditionally held back by the long and difficult commute, residents are now looking further outside the Beltway in hopes of buying their dream home - built to their tastes and decked out with their own choices of marble, cabinets, floors and trim - by some of the finest builders around: Toll Brothers, K Hovnanian, Stanley Martin, NV Homes, and Pulte, to name a few. With great loan packages, low interest rates, and "green" building methods - it is a fantastic time to build. If you are thinking this is what you want - give us a call and we'll be happy to answer all your questions about the new home buying process!
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