The Shadow Knows | Northern Virginia Marketwatch
Real Estate Update And Home Sales Statistics
What lurks in the future of Northern Virginia's real estate market? With a tip of the hat to the old radio serial of the 1930s, The Shadow Knows.
In this case, we are watching two "shadows" closely: the much-discussed shadow inventory of distressed homes that may flood the market, as well as the long shadow cast by the specter of rising interest rates.
Distressed homes are short sales - those where the owner sells owing more than the house is worth - and foreclosures, broadly defined as those homes lost to the lender because of default on the mortgage. One of the measures we look at is the trend in new listings coming on the market in our regional multiple listing system and, as the chart to the right indicates, there is not yet an upward trend in this distressed inventory. Short sales (the yellow bar) constituted 16.6% of new listings in the first 4 months of 2009 and 14.8% in the same time period of 2010. Foreclosures (the red bar) were 7.2% of all new listings in January-April 2009 and just 2.3% so far this year. This doesn't mean there's nothing to worry about, because we know that lots of home owners are still upside down on their mortgage - but we are encouraged that the "shadow" inventory isn't exploding.
Frankly, we're convinced that rising mortgage interest rates will have more impact on the market recovery than distressed inventory, but we're tempering our concern over the fact that, as rates rise, 3-, 5- and 10-year adjustable rate mortgages will become more popular, and their lower-than fixed rates will help cushion the loss of buying power that will come with higher rates. For more metro area statistics, visit http://www.mcenearney.com and click on the "news" tab.
If you're thinking of a move, don't let the summer sail on by ... A great selection of homes is currently available, but the inventory is changing frequently.
For the most up-to-date assessment of our LOCAL market, please call me today. As an industry leader, McEnearney Associates prides itself on it's comprehensive knowledge throughout our area ... data and statistics that just may surprise you.