“I feel confident that the 2nd quarter will show a much more robust real estate market. There are several reasons for my optimism.
- The spring market is here and with it comes increased activity. More homes come on the market which gives those who are looking more from which to choose.
- The weather is better which brings more traffic to existing homes and new home communities.
- The biggest reason is interest rates remain low when all predictions were they would go up. A weird reason for this is the US-China tariff battle. The negative effect of this to the stock market and the economy puts downward pressure on mortgage rates. Some might not like the increase in tariffs with China, but it is a good thing for home buyers.”
Sound familiar? In many ways, nothing has changed over the last 9 months. It was a robust spring market as anticipated but slowed down quite a bit in the late summer/early fall. Thankfully, buyers re-engaged late in the year causing an almost 5% increase in real estate transactions* year over year. The median sales price dropped from almost $300,000 to a little over $290,000. This can be explained when you see how new construction continues to impact the overall market. https://www.cnbc.com/2020/01/02/competition-for-housing-is-so-high-the-spring-market-is-starting-now.html?__source=iosappshare%7Ccom.apple.UIKit.activity.PostToFacebook
Compared to the 5% increase in numbers of homes sold, new home sales increased by 12% (749 to 837). However the new home median sold price decreased from $429,900 in 2018 to $362,000 in 2019.* This is shown by the increased demand for lower priced homes that has increased sales in counties like Greene and Fluvanna. This can also be seen in a static sales market in homes sold over $500,000 (766 in 2019 vs 759 in 2018) and with homes sold over $1,000,000 (120 in 2018 vs 137 in 2019). Hopefully the middle-east tensions will not increase gas prices too much as this could dampen people’s desire to move farther out.
High priced rentals $1400-1700 continue to be built and leased out in and around Charlottesville and the urban core of Albemarle County. It makes you wonder why until you realize there is a significant shortage of homes in close proximity to the city. There are 58 total with just 25 that are detached. There are only 15 that are new construction. This, along with the misconception that you need a big down payment to buy, keeps people renting vs purchasing their 1st home. You can learn more about this by clicking on this link https://wina.com/podcasts/vhda-financing-update/
There has been an increased amount of showings over these 1st couple week of 2020 and loan officer Jay Domenic from Movement Mortgage says there is an uptick of folks wanting to get pre-qualified due to interest rates predicted to remain low. https://www.bankrate.com/finance/interest-rates-forecast/
I will end this article with another quote from the April of 2019 blog post. “Even though things are looking up, Sellers need to continue to price their home smartly and have it in good condition. Purchasers should definitely know what they are looking for and what they are qualified to buy. That way, when the right home comes on the market, they can react quickly.” All of this remains true today.
If you need assistance with buying or selling a home, please reach out via email firstname.lastname@example.org or by calling 434-951-5124.
*Real estate data as of 1/8/2020 and taken from CAAR MLS