MARKET OUTLOOK * RISING INTEREST RATES * THE “AMAZON EFFECT”
Today’s post features a potpourri of quick topics including the current market outlook for 2019, the effect of rising interest rates, and (of course) what Amazon moving into Crystal City means to Northern Virginia.
Generally, the consensus of real estate gurus concerning 2019 is for a ‘slowdown’ in market activity (potentially less homes being bought and sold) and for a stabilization in pricing (home values to remain at current levels). While neither of these predictions are particularly alarming, it may play out that home sellers need to be more aware of what’s actually happening within their specific slice of the marketplace as opposed to considering just the broader conditions. Staying on top of your ‘micro-market’ will be critical to ensure proper pricing and maximizing your bottom line when selling.
As mortgage interest rates continue to rise, we are having more conversations with potential home buyers and sellers regarding what the higher cost of borrowing really means. Recently, I recorded a short video blog that explains the effect in terms of affordability: www.theartofrealestateteam.com/blog
Certainly, in the past, higher interest rates have led to slower sales in the near term. Expect to see the return of Adjustable Rate Mortgage (ARM) options as an alternative to the 30-year fixed rate loan, especially when the lower ARM rates become even more attractive.
THE “AMAZON EFFECT”:
Next to ‘How’s the Market”, the question I’ve been getting from a lot of people recently concerns what will the effect of Amazon coming to Crystal City mean for us here in Northern Virginia. It is safe to say that we will probably not see an immediate or overwhelming difference in outlying areas as a result. Areas closer to 'ground zero' (the new Amazon location in Crystal City, being dubbed "National Landing") will likely see immediate and near-term upward pressures on rental properties, properties bought to be future rentals, and nearby condominium sales.
Our employment base throughout Northern Virginia remains strong and highly diversified so any singular company's entry or exit (think ExxonMobil's recent departure) does not bring with it a huge ripple effect as it might in other parts of the country. The best thought is that over time the addition of Amazon to our overall healthy employment marketplace will contribute to steady real estate sales growth, including sustainable increases in home values.
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