The Real Estate Whisperer: August Market Update for Loudoun

The Real Estate Whisperer: August Market Update for Loudoun

August Market Update for Loudoun

Reports continue to show stabilization within Loudoun County. Since prices adjusted (down about 25% from last year as of the end of August), activity levels continue to be on the rise.

MRIS reports a 28.47% increase in the number of closed sales in August 2008 compared to August 2007. This has been a trend for several months (up 8% in July, 19% in June, 12% in May, when compared to the same months in 2007), and is a very positive indicator that Loudoun, at least for now, seems to have reached the "bottom" of the market and is improving. I have even seen recent transactions where an investor purchased a home from a bank a few months ago, and has flipped the property, quickly, making no improvements and raking in a handsome profit. Although I do NOT recommend this investment strategy in a volital market, it is very nice to see that we may be experiencing not just stabilization, but perhaps some recovery in limited areas.

The 37 cash purchases in August (about 7% of the closed transactions) indicate investors support the theory that Loudoun's market in strengthening.

And, with 37% of the transactions being financed with FHA and VA loans, we know that first time home buyers are seeing opportunities in the market of newly affordable homes available, coupled with historically low interest rates. I anticipate September will show further increase in FHA loans as those using the seller funded down payment assistance programs will rush to complete their transactions before the program disappears (CLICK HERE TO LEARN ABOUT THIS CHANGE). We may see a "lull" in October as first time home buyers, real estate agents and loan officers scramble to learn about other low/no money down options to keep a steady flow of these buyers entering our market.

Currently, Loudoun has a little less than a 5 month inventory of homes on the market. The National Association of REALTORS suggests that a 6 month inventory is indicative of a "balanced" market, with higher inventory levels being a "buyers market" and lower inventory levels indicating a "sellers market". I am not certain I would call this a "seller's market" considering how far prices have dropped compared to previous years. However, sellers who are pricing RIGHT when their listings enter the market place ARE seeing multiple offers and quick sales. The MRIS report shows that 30% of the homes that went under contract did so in the first 30 days on the market, and another 18% got a contract within the first 60 days. What happens to sellers "testing" the market with unrealistic pricing expectations? Those would be the listings that remain on the market well beyond the "average" of 103 days of marketing time.

So, what's next? With the Fed taking control of Freddie and Fannie, Lehman Bros filing for bankrupsty, Merill Lynch being purchased by Bank of America, and the seller funded DPA's disappearing, what's to come over the next few months? Stay tuned as I work to provide you with insights on this ever changing market.

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MRIS publishes new statistics monthly, around the second week of the month. The public can access these reports from MRIS.com. They are published by region, county, city, and even zip code. A qualified agent can help you understand the information contained in these reports.For an even closer look at market conditions, order a personalized Market Snapshot by clicking HERE. Type in the information about your home, and your email address... a personalized report will be sent to you in a few minutes, detailing information about the geographically closest homes which are for sale and have recently sold.

August Stats Show Stabilizing Market in Northern Virginia

In reviewing the latest statistics published by the local MLS system, I continue to feel cautiously optimistic about the stabilization in our market place. Northern Virginia includes Fairfax & Arlington Counties and all of the cities within those areas. Highlights of the report include: - Inventory this month is down from 11956 active listings to 9191 active listings as of the end of August. - With 1887 newly recorded contracts last month, that indicates an inventory of approximately 4.87 months supply (NAR considers 6 months inventory a balanced market). - We continue to see confidence in the market place by investors and first time home buyers, indicated by the number of cash transactions (about 8% of purchases) and those financed with FHA and VA loans (about 27% of purchases). - Perhaps the best statistic in all of this is that the number of units sold was up about 6% compared to the same time last year. Northern Virginia is a large area.

Arlington has not followed the trends of the other sub-markets. Arlington has remained relatively stable, with prices and activity level being extremely similar when compared year to year; and inventory levels hovering around the 4 month level.

Conversely, Fairfax has seen dips, and seems to be showing signs of recovery. The prices in Fairfax are down about 20% compared to last year, with the number of solds up more than 10% from August 2007. The inventory level in Fairfax County is now at about 5 months.

Personally, I am concerned about Arlington. When everything around the area is adjusting, it seems odd that one area would be able to weather the storm without showing wear. I believe that gas prices have kept that area stronger, as people wanted to live close to the city to save on gas. In addition, Arlington has been "built out" for much longer with no significant new development to increase inventory. However, as the suburbs seem to have adjusted to the new market, Arlington will not appear a value compared to things just a few miles away. In order to keep demand high, I expect to see price drops in Arlington in the coming months. Only when the entire area has "rebalanced" will be able to move to the next level, "recovery".

================================================================= MRIS publishes new statistics monthly, around the second week of the month. The public can access these reports from MRIS.com. They are published by region, county, city, and even zip code. A qualified agent can help you understand the information contained in these reports. For an even closer look at market conditions, order a personalized Market Snapshot by clicking HERE. Type in the information about your home, and your email address... a personalized report will be sent to you in a few minutes, detailing information about the geographically closest homes which are for sale and have recently sold.