Just to start, these are my opinions and experiences and mine alone. Some may agree and some may disagree. But I thought this would be interesting to those interested in selling/buying real estate right now.
The spring market is here and it’s crazy right now. I’ve seen substantially more activity this year than last. It’s palpable. Those who bought earlier in the year, good for you. You have saved yourself from experiencing the zoo that it is right now. Two reasons for this situation is the very limited supply of homes and the rising interest rates so everyone is trying to buy NOW. Those who started looking to buy in March 2018 or after are experiencing the major shortage of inventory and fight for limited housing. Almost every offer I’ve submitted the last two months have been multiple offer situations. I’ve won some and lost some. Even a couple I felt confident winning, I lost due to so many others putting in offers for the same house - there were 9 other offers for one I put in (but I have heard of one house getting 17 offers). One offer I put in at list price was all cash. Everyone says cash is king but for some sellers, if an offer with financing is still coming in $10-15k higher, they are willing to take the risk and take the higher offer. Another offer I submitted was $15k over list price but lost to the one that went $20k over and waived home inspection (of course I want to win for my buyer, but I must work within their budget and parameters).
In addition, due to the shortage of homes, everyone is flocking to the homes that just came on the market. This is causing these multiple offer situations where many homes come active Thursday and are gone by Monday. Lower priced homes such as townhomes $425k and under are flying off the shelves. One weekend, I was showing the same 5 townhomes to 3 different clients of mine. Buyers are getting frustrated at the multiple offer situation and from losing to other offers. One suggestion I make to them is to look for homes that have been on the market 3+ weeks so they won’t necessarily have to compete for them and there may be more flexibility on the price (not having to offer list price or higher like they are often having to do for ones that just came on the market). Or another suggestion is to buy new construction if you don’t want to have to fight for a home. However, be prepared to pay more than resale since it is brand new and you are choosing your lot and design options (but this has some advantages too). New construction could help a first time home buyer who might need help with closing costs since builders give closing cost credit for using one of their preferred lenders (or you can use another lender who could match what the builder is offering). You are also not having to worry about the cost of replacing the roof or major systems soon after moving in.
Generally, I’ve been noticing that Fairfax is a fiercer market for buyers than Loudoun. In Loudoun, I’m seeing winning offers at $20k max over list price and maybe waiving just one contingency such as home inspection. In Fairfax, I’m noticing winning offers going $20-40k over list price and waiving all contingencies.
Here’s yesterday’s article from the The Wall Street Journal noting the housing shortage that’s all across the country. “Homebuilding Isn’t Keeping Up With Growth, Development Group Says”.
In conclusion, if you are thinking of selling, now is the time to do it. It’s a GREAT market for sellers. If you are thinking of buying, it is still the right time to do it due to rising interest rates, despite the buying competition. Based on the many articles I read and various conversations with lenders, the interest rate forecast will be close to 5% by the end of the year and close to 7% within the next 3-5 years.
I hope this was helpful. As you can see, I definitely have a pulse on the local market, know the prices of resale and new construction, as well as have local neighborhood knowledge, since I’m in the trenches daily helping my buyers and sellers. So please feel free to contact me, your local area expert, for any real estate needs and questions!
Source: Jin Chen's opinions as a Licensed REALTOR as of 4/18/18.