Let's start by checking back in with the 2013 3rd quarter Central Virginia housing report done by John McClain and Ryan Price from George Mason University:
The Central Virginia Area housing market had a strong third quarter, posting gains in sales, prices, and pending sales relative to last year. Homes continue to sell faster, and sale prices inch closer to list prices, all of which bode well for sellers. The buyer market remains active as evidenced by the sales growth, but the low inventory of active listings could cause some to wait until more options are available. The healthy and growing job market in Central Virginia is a driving force in the overall momentum of the region’s housing market. The improving unemployment picture has also been a significant factor, as it increases mobility, and provides greater economic stability for both buyers and sellers
Well the numbers from December 2013 are in and we are seeing lots of numbers supporting the report!
If you’ve watched my previous videos you probably know what’s coming next – INTEREST RATES! The National Average on the 30 year fixed rate mortgage is 4.48%. As we predicted, that is up from 4.28% back in November. There is nothing to indicate they will be going back down anytime soon.
Why is that important? For buyers it's obvious, now is the time to get off the fence and doin't wait any longer if you want the best rates. For both buyers AND sellers know this – For every 1% increase in interest rates, that translates to 10% LESS buying power for the buyer. Think about that – If we continue to see a .2% increase every 2 months, as we did from November to January, that means by the end of the year your home is going to be worth 10% less than it is right now! With our local median price at $219,000 (slightly up from last year) 10% of that equates to almost $22,000 in lost value based on interest rates alone!
Deep breath sellers! The good news - there were 843 closed sales in December, up 9.5% from last year AND only 768 new listings, down 5.5% from last year. Simple supply and demand. Less listings + more sales = an increase in price. In my opinion this will help neutralize some of the downward pressure being put on prices from lowering interest rates. However, if I’m a seller I’m going to LIST NOW.
Also in the video - according to Jay Papasan, over 90% of buyers start their search on the internet AND take 2 months of “shop” time before buying. So if you want sell in April or May, you need to be in front of buyers NOW.
Going along with that is our Absorption rate. Absorption rate simply means that if no other houses were listed how long would it take to sell all the inventory? Well for a single family home in our area a year ago we were looking at almost 5 months of inventory. Last month we had 3.5 months of inventory. So again, it’s important to get out ahead of the competition and if you want to make a move this year, LIST NOW.
That’s all I have, make it a fantastic month. If you still aren’t sure if now is the right now to make a move, call me…to discuss your particular situation.