Loudoun Sales up 56.6%!

Finally, a good news headline! MRIS published their regional statistic reports this morning; and they actually showed that, in September 2008, sales in Loudoun were up 56.6% when compared to the number of sales in September 2007. I had predicted a continued increase in sales activity; but I will admit that this number exceeded even my own expectations. A contributing factor to the increased volume of sales is the change in FHA, with a large number of buyers trying to take advantage of the final opportunity to use the seller funded down payment assistance programs. This change required that all loans be fully approved by September 30, and most lenders were requiring the loans close by that deadline, too. As of October 1st, FHA buyers must contribute a minimum of 3% as a down payment, and as of January 1st, that minimum increases to 3.5%. These changes began adding urgency to the first time home buyer market in August. In September, the number of FHA purchases were approximately 35% of the sales. THE TALE OF TWO MARKETS -There is a distinct price point at which homes in Loudoun are selling. Under $500,000, we have only about a 4 month supply of inventory available. These homes are seeing fast contracts, and multiple offers which sometimes result in a sales price higher than the asking price. One might say that for a seller of a home priced in the lower half of the market, it has been a seller's market for the last several months. For mid-priced homes in the $500,000 to $700,000 range, we have almost a 9 month supply. For higher priced homes, above $700,000, the supply level increases to almost 22 months. It's definately a buyer's market at those price points. The message here is that there is a definate benefit to "trading up" in this market; where you can sell a $400,000 home and buy a $600,000 home and have the advantages of market conditions in your favor on both transactions! EXPECTATIONS FOR THE NEAR FUTURE You can't miss the headlines everyday, one scary thought after another. What will happen in the short term to our overall economy? I really can't even guess. But, I have a lot of faith; and I know, long term, it will all work out. As for how all of this will impact the real estate market, here's my prediction... I suspect we'll still close what we have on the books for October, but the number of new contracts will be reduced. I think after the elections - regardless of which candidate will be our next president - with the media's focus switched, the public will feel a renewed sense of cautious optimism; and people will slowly start thinking about moving and investing in real estate again. That is always somewhat deterred by the holidays, and my prediction - for the moment - is that January will be our next BIG month in real estate locally. Watch and see; and I'll keep you posted.

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