Traditionally, spring is one of the busiest times of the year for real estate. However, the coronavirus outbreak—and subsequent stay-at-home orders—led many buyers and sellers to put their moving plans on hold. In April, new listings fell nearly 45%, and sales volume fell 15% compared to last year nationwide.¹

Locally, new listings in April fell 36.2% in comparison to April 2019.  (interactive chart)

Sales volume in Alexandria VA fell 16.2% from April 2019. (interactive chart)

Fortunately, as restrictions have eased, we’ve seen an uptick in market activity. And economists at Realtor.com expect a rebound in July, August, and September, as fears about the pandemic subside, and buyers return to the market with pent-up demand from a lost spring season.²

But given safety concerns and the current economic climate, is it prudent to jump back into the real estate market?

Before you decide, it’s important to consider where the housing market is headed, how it could impact your timeline and ability to buy a home, and your own individual needs and circumstances.

WHAT’S AHEAD FOR THE HOUSING MARKET?

The economic aftermath of the coronavirus outbreak has been severe. We’ve seen record unemployment numbers, and economists believe the country is headed toward a recession. But people still need a place to live. So what effect will these factors have on the housing market?

Home Values Projected to Remain Stable

Many Americans recall our last recession and assume we will see another drop in home values. But the 2008 real estate market crash was the cause—not the result—of that downturn. In fact, ATTOM Data Solutions analyzed real estate prices during the last five recessions and found that home prices actually went up in most cases. Only twice (in 1990 and 2008) did prices fall, and in 1990 it was by less than one percent.³

(The following chart represents data from Corelogic, but provides a graphical representation of the home price changes over the last five recessions.) 

Many economists expect home values to remain relatively steady this time around. And so far, that’s been the case. As of mid-May, the median listing price in the U.S. was up 1.4% from the same period last year.⁴

Demand for Homes Will Exceed Available Supply

There’s been a shortage of affordable homes on the market for years, and the pandemic has further hindered supply. In addition to sellers pulling back, new home starts fell 22% in March.⁵ In fact, Fannie Mae doesn’t foresee a return to pre-pandemic construction levels before the end of 2021.⁶

This supply shortage is expected to prop up home prices, despite recessionary pressures. Fannie Mae and the National Association of Realtors predict housing prices will rise slightly this year⁷, while Zillow expects them to fall between 2-3%.⁸ Still, that would be a far cry from the double-digit declines that occurred during the last recession.⁹

Taking a look back over the past ten years is the best way to give you a visual how the supply of homes has drastically decreased. In all of 2020, we have never had more than a month's supply of homes for sale in Alexandria VA. (interactive chart)

Government Intervention Will Help Stabilize the Market

Policymakers have been quick to pass legislation aimed at preventing a surge in foreclosures like we saw in 2008. The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress gives government-backed mortgage holders who were impacted by the pandemic up to a year of reduced or delayed payments.¹⁰

The Federal Reserve has also taken measures to help stabilize the housing market, lower borrowing costs, and inject liquidity into the mortgage industry. These steps have led to record-low mortgage rates that should help drive buyer demand and make homeownership more affordable for millions of Americans.¹¹

HOW HAS THE REAL ESTATE PROCESS CHANGED?

As the pandemic hit, real estate and mortgage professionals across the country revised their processes to adapt to shifting safety standards and economic realities. While these new ways of conducting business may seem strange at first, keep in mind, military clients, international buyers, and others have utilized many of these methods to buy and sell homes for years. 

New Safety Procedures

 The safety of our clients and our team members is our top priority. That’s why we’ve developed a process for buyers and sellers that utilizes technology to minimize personal contact.

For our listings, we’re holding online open houses, offering virtual viewings, and conducting walk-through video tours. We’re also using video chat to qualify interested buyers before we book in-person showings. This enables us to promote your property to a broad audience while limiting physical foot traffic to only serious buyers.

Likewise, our buyer clients can view properties online and take virtual video tours to minimize the number of homes they step inside. Ready to visit a property in person? We can decrease surface contact by asking the seller to turn on all the lights and open doors and cabinets before your scheduled showing.

The majority of our “paperwork” is also digital. In fact, many of the legal and financial documents involved in buying and selling a home went online years ago. You can safely view and eSign contracts from your smartphone or computer.

Longer Timelines and Higher Mortgage Standards

 The real estate process is taking a little longer these days. Both buyers and sellers are more cautious when it comes to viewing and showing homes. And with fewer house hunters and less available inventory, it can take more time to match a buyer with the right property.

In a recent survey, 67% of Realtors also reported delays in the closing process. The top reasons were financing and buyer job loss, but appraisals and home inspections are also taking more time due to shifting safety protocol.¹²

Securing a mortgage may take longer, too. With forbearance requests rising, lenders are getting increasingly conservative when it comes to issuing new loans. Many are raising their standards—requiring higher credit scores and larger down payments. Prepare for greater scrutiny, and build in some extra time to shop around.¹³

IS IT THE RIGHT TIME FOR ME TO MAKE A MOVE?

The reality is, there’s no “one size fits all” answer as to whether it’s a good time to buy or sell a home because everyone’s circumstances are unique. But now that you know the state of the market and what you can expect as you shop for real estate, consider the following questions:

Why do you want or need to move?

 It’s important to consider why you want to move and if your needs may shift over the next year. For example, if you need a larger home for your growing family, your space constraints aren’t likely to go away. In fact, they could be amplified as you spend more time at home.

However, if you’re planning a move to be closer to your office, consider whether your commute could change. Some companies are rethinking their office dynamics and may encourage their employees to work remotely on a permanent basis. 

How urgently do you need to complete your move?

If you have a new baby on the way or want to be settled before schools open in the fall, we recommend that you begin aggressively searching as soon as possible. With fewer homes on the market and a lengthier closing process, it’s taking longer than usual for clients to find, contract, and close on a home.

However, if your timeline is flexible, you may be well-positioned to score a deal. We’re seeing more highly-incentivized sellers who are willing to negotiate on terms and price. Talk to us about setting up a search so we can keep an eye out for any bargains that pop up. And get pre-approved for a mortgage now so you’ll be ready to act quickly.

If you’re eager to sell this year, now is the time to begin prepping your home for the market. A second wave of infections is predicted for the winter, which could mean another lockdown.¹⁴ If you wait, you might miss your window of opportunity.

How long do you plan to stay in your new home?

 The U.S. real estate market has enjoyed steady appreciation since 2012, which made it fairly easy for owners and investors to buy and sell properties for a profit in a short period of time. However, with home values expected to remain relatively flat over the next year, your best bet is to buy a home you can envision yourself keeping for several years. Fortunately, at today’s rock-bottom mortgage rates, you can lock in a low interest rate and start building equity right away.

Can you meet today’s higher standards for securing a mortgage?

Mortgage lenders are tightening their standards in response to the growing number of mortgage forbearance requests. Many have raised their minimum credit score and downpayment requirements for applicants. Even if you’ve been pre-qualified in the past, you should contact your lender to find out if you meet their new, more stringent standards. 

Is your income stable?

If there’s a good chance you could lose your job, you may be better off waiting to buy a home. The exception would be if you’re planning to downsize. Moving to a less expensive home could allow you to tap into your home equity or cut down on your monthly expenses.

WHEN YOU’RE READY TO MOVE—WE’RE READY TO HELP

While uncertain market conditions may give pause to some buyers and sellers, they can actually present an opportunity for those who are willing, able, and motivated to make a move.

Your average spring season would be flooded with real estate activity. But right now, only motivated players are out in the market. That means that if you’re looking to buy, you’re in a better position to negotiate a great price. And today’s record-low mortgage rates could give a big boost to your purchasing power. In fact, if you’ve been priced out of the market before, this may be the perfect time to look.

If you’re hoping to sell this year, you’ll have fewer listings to compete against in your neighborhood and price range. But you’ll want to act quickly. Economists expect a surge of eager buyers to enter the market in July—so you should start prepping your home now. And keep in mind, a second wave of coronavirus cases could be coming in this winter. Ask yourself how you will feel if you have to face another lockdown in your current home.

Let’s schedule a free virtual consultation to discuss your individual needs and circumstances. We can help you assess your options and create a plan that makes you feel both comfortable and confident during these unprecedented times.

Download Your Free Report (no registration required) - Is Now A Good Time to Buy or Sell

The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.

Sources:

1.     Forbes - https://www.forbes.com/sites/ellenparis/2020/05/08/latest-housing-market-update-from-realtorcom/#20bf7829113e

2.     HousingWire -
https://www.housingwire.com/articles/realtor-com-housing-market-will-bounce-back-this-year-but-the-rebound-will-be-short-lived/

3.     Curbed -
https://www.curbed.com/2019/1/10/18139601/recession-impact-housing-market-interest-rates

4.     Realtor.com -
https://www.realtor.com/research/weekly-housing-trends-view-data-week-may-9-2020/

5.     Money.com -
https://money.com/coronavirus-real-estate-home-prices/

6.     Fannie Mae -
https://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_051320.pdf

7.     HousingWire -
https://www.housingwire.com/articles/pending-home-sales-tumble-on-covid-19-shock/

8.     HousingWire -
https://www.housingwire.com/articles/zillow-predicts-small-home-price-drop-through-rest-of-2020/

9.     Federal Reserve Bank of St. Louis -
https://fred.stlouisfed.org/series/CSUSHPINSA

10.   Consumer Financial Protection Bureau -
https://www.consumerfinance.gov/coronavirus/cares-act-mortgage-forbearance-what-you-need-know/

11.   Bankrate -
https://www.bankrate.com/mortgages/federal-reserve-and-mortgage-rates

12.   National Association of Realtors -
https://www.nar.realtor/sites/default/files/documents/2020-05-11-nar-flash-survey-economic-pulse-05-14-2020.pdf 

13.   Forbes -
https://www.forbes.com/sites/alyyale/2020/04/17/buying-a-home-during-the-pandemic-dont-expect-your-everyday-home-purchase/#fadad3d33b0c

14.   Washington Post -
https://www.washingtonpost.com/health/2020/04/21/coronavirus-secondwave-cdcdirector/

The Benefits of Homeownership May Reach Further Than You Think
Buying A Home In Alexandria VA

Top Reasons to Own Your Home [INFOGRAPHIC]

It Just Made Sense To Call This Home

15330 Kensington Park Drive in Potomac Club sold in 4 days for full asking price!

April, May, and June are the popular months where many leases come up for renewal and first-time buyers play a very active role in the real estate market in Woodbridge, Virginia.  This home in Potomac Club was so spacious that it blows other floor plans out of the water.

With 2,379 square feet, this home offers a floor plans that's more functional that a lot of older townhomes.  Three bedrooms upstairs, a dedicated home office space, an open family room with granite countertops, family room with gas fireplace, and a 1-car garage, wow!  This home was hands down, the right move.

First-Time Offered For Sale at $339,900.

See The Video

See What's Nearby - You Can't Beat The Convenience

Related Links

• Full MLS Property Details
• Current Homes For Sale in Potomac Club

Thinking About Selling? Schedule Your Listing Consultation Today

Elegance and Beauty Tucked Away in Stonegate

There are few communities in Alexandria that offer such a convenient location, but also give you the feeling that you're farther away from DC than you really are.  Stonegate is one of those communities. The age of the communities give you the benefit of established, beautifully matured tree-lined streets, that guard the stately brick front townhomes with grand curb appeal.

After you've stepped inside and have been welcome by the open floor plan, tucked away rear kitchen with family room and fireplace, private deck and patio, and the open basement with full bath, you'll easily see why this home didn't last long.

Listed For Sale at $655,000

See the Video Tour

See What's Nearby - You Won't Believe How Close You Are

Related Links

• See the full MLS listing with property details
• Current Homes For Sale in Stonegate

Now that we are sheltering in place, let's take advantage of the down time to work on those household expenses.  Today, I'm going to show you how to Kill Bills.

• Download the past two months of your bank and credit card statements.  I recommend printing them out so that you can mark on the pages and take notes.  If you're scrolling through them online, you'll be more likely to miss something that should catch your attention.
• Download your free copy of the Household Spending Plan.  Courtesy of VHDA, this planning and spending worksheet is used in the Homebuyer Education Classes to help consumers learn about their spending patterns before committing to homeownership.  If you're a homeowner, perhaps it's been a while since you took a look at where you're money is going.  This tool will help.
• Tally up and itemize all of your expenses.  Remember, every line items on your bank and credit card statements should be accounted for, even the ATM withdrawals.
• Kill the bills.  Decide what expenses you can cut out altogether, and what can be trimmed.  Call your providers and negotiate better rates, or shop around for lower rates right now.  Try to find multiple ways to save.

Sell My Home in Alexandria VA | Entry-Level Homeowners Are in the Driver’s Seat

MOVE-IN READY two bedroom, two full bath condo in Hillwood rented in less than 30 days!

There's no doubt that Amazon's HQ2 announcement has attracted a flurry of buyers to the Alexandria VA real estate market.  But there's still a steady market of consumers who aren't quite ready to buy.  This means there are some great opportunities for homeowners who don't want to sell, but keep their home as an investment property.

As a seasoned real estate professional, one of the ways I can help is to evaluate the real estate market, and help you decide if you should sell or rent your property.  Each situation is different, so if you're on the fence about what to do, just click here to contact me.  Together we will evaluate the rental listings and the homes that have recently sold, to help you make the decision that's best for you.  Just give me a call today at 703-623-8759 or click here. 

Home warranties can be a great tool to assist buyers and sellers, but do you really understand how they work? Take a look at my latest video where I interview Molly Flory, Regional Representative for Old Republic Home Warranty.

Molly talks about commonly asked questions including:

• What is covered when you have a home warranty?
• How is a home warranty different than home owners insurance?
• How does a homeowner make a claim?

One of the most interesting things that I discovered is that if you are buying a new construction home, you can purchase an Old Republic home warranty at closing and defer the coverage until your anniversary date, that way you don't have overlapping coverage with your typical builder's warranty.

I hope you found this interview helpful!  For more information, please visit www.orhp.com and learn about the different types of protection plans that Old Republic offers.

Have You Budgeted for Closing Costs?
Buying a Home In Alexandria VA