Tim Trainum Properties
"Delivering a Preferred Experience in Real Estate!"
REALTOR®, VA License #0225235004
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June
14
14
How is the Northern Virginia Real Estate Market During COVID-19? (May Update)
May Data Mixed - Signals Flashing for a Delayed Spring Market
Here are some of the leading top-line metrics that best illustrate the health of the Northern Virginia residential real estate market in May. As expected, Listings are Down, Pendings (Contracts) are Down, Closed Transactions are Down, but all stable since April. However, there is underlying strength supporting the housing market - Prices are Up, Days on Market are Fewer, Sold-to-List Price Ratio is Up and Buyer Showings have Aggressively Snapped Back. Some of the underlying data I've reviewed in June indicate New Listings are on the rise suggesting the possible beginning of a delayed Spring Market (June, July & August). The tables are self-explanatory, but I offer a few highlights below:
- Listings are down 33% in May equaling April's rate of decline, but Contracts have improved 27% since last month compressing inventory even further. This rate of contraction in New Listings is quite significant to be sure, but when taken in the context of a near-total stoppage of economic activity across the U.S. imposed by federal, state and local government, the housing market remained very active. In fact, some early signs of a delayed Spring Market are being seen in New Listings which are up 7% over last year between mid-May to the first week of June.
- Showings in Virginia bottomed during the first part of April (down 54%), but since have been experiencing a brisk and aggressive snap back. If fact, during the most recent week in June showings are actually up 18% compared to the same time in 2019.
- Underlying Market Strength is being evidenced by the continued strong buyer demand pushing the median home price in Northern Virginia up $24,000 (4.9%) from $491,000 to $515,000. Likewise, homes are coming under contract faster with fewer days on market as well as holding firm Sold-to-List Price ratios. Added strength is evident in the mortgage market with interest rates remaining at all-time lows near 3%. The Federal Reserve Bank recently indicated the Fed Funds Rate will remain at near 0% for the next two years. According to an online survey from LendingTree, 53% of buyers say they plan to buy a home within the next year as a result of low interest rates and factors surrounding the pandemic. First-time homebuyers are being especially pushed into action with 73% now planning to buy within the next year. Likewise, millennials are also now more motivated to buy with 66% aiming for the same time frame.
- Tempered Buyer/Seller Behavior continues to be the theme from March to May. While there are certainly pockets of homes seeing multiple offers with prices bid up and reduced seller contingency risk, buyers are showing more restraint in chasing homes to elevated prices and contingency risk. Sellers continue to relax expectations to be more in-line with the economic contraction. Contract fall-outs are up with buyer indecision and job interruptions (a fall-out occurs when a buyer voids the contract while in escrow). Lenders are tightening borrowing guidelines consistent with Fannie Mae requirements.
- Relatively Smaller, Independent Broker-Agent Business Models Continue to be Best Positioned to help buyers and sellers reach their objectives. This is statistically true in any market, but it becomes even more evident in challenging markets like now. Redfin, an employee-based broker model, furloughed 41% of its agents. Compass cut its staff by 15%, and publicly traded Realogy (owner of brands like Century 21, Coldwell Banker and Sotheby's) who was already struggling in recent years have experienced similar cuts. Each company, Zillow and others have all suspended iBuyer platforms they billed as technologically revolutionizing the R/E space, but in times like these it shows how ineffective the technology may be and where it truly ranks among the company's business priorities.
- Agent Expertise Matters even more now. The divide between Top Producing and low producing agents has grown even wider during this period. Buyers and sellers will find the best outcomes with high-value, leading agents who understand execution, process and best practices. My agency is calibrated to achieve exceptional results for my clients. I don't practice any other outcome.
"My overarching objective is first and foremost to be an advisor and value provider. I work to become the conduit of information to help consumers make the most informed decisions possible. I just happen to also have a real estate license." - Tim Trainum
Tim Trainum Properties
Office: (571) 386-1075 Cell: (703) 568-6750 Email Me
- 43777 Central Station Drive
- Suite 390
- Ashburn, VA 20147
Office: (571) 386-1075 Cell: (703) 568-6750 Email Me
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