Tuesday, March 5, 2013

The Future of Home Values in NOVA

As a Northern Virginia real estate agent, a large part of what I do is monitor the latest trends and updates in the local housing market. When a seller client comes to me and asks for advice about whether or not now is the best time to sell their NOVA home, it’s up to me to be educated about the state of the market in order to give them the most sound and accurate opinion that I can. Now that March has arrived, many home sellers in the NOVAarea are thinking about listing their home in the spring or summer market. This has lead to many questions about what home values will be in the next few months.

As a Northern Virginia real estate professional, I can say that this is absolutely difficult to project. What I’ve found is that typically, the answer comes down to supply and demand. Similar to the common economic principle, in real estate supply and demand refers to the current month’s supply of homes available on the market in relation to the number of home buyers who are looking during that same month. Typically, although not always, real estate supply and demand follows a pattern: 
  • 1-4 months’ supply of homes creates a seller’s market, where home values are guaranteed to go appreciate. Sellers are more confident entering the market at this time. 
  • ·      5-6 months’ supply creates a balanced market, where home values appreciate at a level that coincides with inflation. Both buyers and sellers are confident at entering the market in these conditions.
  • ·      7-8 months’ supply creates a buyers market. There are more homes listed than buyer demand, which means that homes often depreciate in value.
So, where is the Northern Virginia real estate market at with regard to these patterns? According to the National Association of REALTORS:
  • ·      Raw unsold inventory is at the lowest level since December 2009.
  • ·      Houses going into contract reached levels last seen during April 2010, which was the month the Home Buyer’s Tax Credit expired.
  • ·      This has created a 4.2 month supply at the current sales’ rate.
Based upon the above information, it is safe to say that right now, the market is leaning more favorable towards sellers. That means that right now is a great time to list your home in the NOVA real estate market. Spring often brings an influx of buyers, and with a lower supply that originally suspected, demand will likely be high, meaning that your home’s value could actually appreciate.

As always, if you have any questions about buying or sellinga home in the NOVA real estate market, don’t hesitate to contact me and ask! I’d be happy to help give you advice and guide you throughout the process. I hope to hear from you soon.

Earle Whitmore
Long & Foster Real Estate, Inc.
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