Our Local Market Heats Up! Good News For Savvy Sellers
Real Estate is Local...and Local Real Estate is HOT! (That is, of course, only if you do all the right things as a Seller!)
If you ask any Northern Virginia Real Estate professional, "How's the Market?", you're likely to get a very enthusiastic answer, from "Great!" to "Red Hot!" to "Crazy!!!". No doubt, there are several factors coming together over the past few weeks that back up that enthusiasm:
Current levels of available homes on the market is low. That means fewer choices for potential home buyers who are actively seeking their next home. This is especially true in the lower and mid-range price sections of our market.
Short Days On Market ("DOM")
Many, but not all homes, are selling in historically short periods of time - - often less than one full week. In fact, a very common scenario that we are seeing is a home gets listed on a Thursday or Friday, has an Open House on that Sunday, and is Under Contract by Monday or Tuesday.
It is important to note that not all listings are experiencing this type of quick success. Despite having the current market conditions favoring Sellers, we are seeing a fair number of homes staying on the market beyond this threshold, say 30 Days, 60 Days, or more. Typically, these Sellers (and the agents who represent them) missed the market - - either in their research and pricing strategy, marketing, and/or home preparations for going on the market.
More Good Buyers than Good Properties
Based on the typical number of showings, inquiries, visitors to Open Houses, and in many cases multiple purchase offers on many of our new listings, it's safe to say that there are presently more qualified and interested home buyers than there are quality, sought-after homes for them to buy. This truth leads to having the best buyers chasing the best homes - - and those Sellers that prepared their properties, priced them wisely, and hired a great agent(!) are reaping the benefits during this market phase.
The Best Strategy For Pricing Your Home
In this type of market, we on The Art of Real Estate Team are helping our Seller clients to maximize interest in their homes by finding the pricing 'sweet spot' which will drive the greatest initial response and may lead to multiple contracts and a very solid sales contract. This is NOT to be confused with under-pricing a property! What we recommend to our clients is a price based upon very thorough research and a very comprehensive analysis to find the 'just right' price where the best buyers out there will see the value and act quickly (and strongly!) to get the home before someone else does!
The "Motivated Buyer" Syndrome
We all know the concept of the 'Motivated Seller', but this market has created a phenomenon that we refer to as the 'Motivated Buyer'. That is a home buyer who is highly qualified, educated on the current market conditions, and is focused on a particular neighborhood, style of home, level of upgrades or features, school district, etc. The low inventory of homes means these great buyers have few choices and may even have recently tried to buy a home that they loved, only to lose out to another even more 'motivated' purchaser. When this happens to them (sometimes more than once!), these buyers 'take off the gloves' when the next great home listing hits the market in order not to miss out again. Obviously, good things happen for the Seller in this situation and the result can be a solid contract, sometimes for over Asking Price, with limited contingencies, with no nonsense, from a grateful and serious buyer who wants to close the deal and make the home their own.
Interest Rates On The Rise?
Here's another factor to consider: With the threat and reality of higher mortgage interest rates on the horizon, many potential home buyers are entering the market in an attempt to buy a home while the affordability remains favorable, and before rising home prices begin to effect how much home they are comfortable in purchasing.
The Coming "Appraisal Hangover"
One thing to watch carefully over the next several weeks is whether or not the short-term upward spike in contracted Sales Prices will be supported by the subsequent Lender appraisals that need to match these rising sales numbers. Even if a buyer is willing to pay an escalated price in order to secure their next home, the property appraisal may or may not support that price as appraisers consider first and foremost what the last few similar homes sold for. If the contract price of a transaction exceeds what the appraiser deems appropriate (remember, the appraiser is looking out for the bank or mortgage company to ensure that the home's value is justified), then the home may not appraise for the Sales Price and the buyer and seller may end up re-negotiating price and terms as a result. There are some home buyers that are 'waiving' their appraisals, but that does not always guarantee the seller that the buyer can actually complete the transaction and is the subject of another blog at another time(!)
Curious what all of this means and how it may effect you as a future home buyer or seller? We are here to help, as we have guided and assisted hundreds of Northern Virginia buyers and sellers!
We help our SELLERS to get "The Most Money For Their Home", and our BUYERS to get "The Most Home For Their Money" - - and we can do the same for YOU!
"We Sell Homes From A Fresh Perspective...YOURS!"
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