Mortgage Loan Officer Keith Freeland from Movement Mortgage joined Liz Moore and Andy Harris from Tide Radio in the studio to talk about problem solving. The trio explored why the real estate market has slowed this year. Keith also explained how homeowners can leverage their home equity to sell their current home and turn a profit, which allows them to pay off others forms of debit such as credit cards and student loans.
Check it out:
Tags: lizlocal-NorthernNeck-realestate, lizlocal-richmond-realestate, lizlocal-williamsburg-realestate, lizlocal-peninsula-realestate, MarketTalk, WYD1
Alexis Tisdale, a first time homebuyer, joined Andy from The Tide to talk about her homebuying journey. Alexis is a client of Ellen Knecht, agent with Liz Moore & Associates, and recently purchased her first home at 25 years old. She is excited to kiss her landlord goodbye and become a homeowner!
Watch Alexis's story:
Liz Moore, President of Liz Moore & Associates, spoke with the Tide’s Andy Harris about current trends in the real estate market, an upcoming beer collaboration with the Virginia Beer Company, and she shared the story of how she got her start in the real estate industry.
Click here to listen!
Market Talk is a live monthly real estate report on 92.3 the Tide. Check back next month for the newest interview.
Tags: MarketTalk
Welcome to the 2nd quarter 2023 edition of Market Talk!
My goal is to walk through what’s happening in the market, and bring some clarity to those of you who are making real estate decisions this Spring and Summer.
The 4th quarter of 2022 saw a sharp rise in interest rates which cooled the frenzied housing market considerably. This was the result of the Fed’s rapid hikes to the federal funds rate in the final months of last year in an effort to halt inflation.
Rates doubled, which translated to a 38% increase in a typical monthly payment for a home buyer, which in turn caused a large number of buyers to put the brakes on their home searches.
As a result, we began 2023 with a much different temperature in the market than most of last year. The buyers who remained in the market in January were skittish, and frustrated by the rapid rate acceleration.
For the first time since before the pandemic, we began to see buyers offering less than asking price, and in some cases even getting seller concessions. Home inspections and appraisals became the
norm again, and buyers found themselves in a better bargaining position to ask sellers to make repairs than they had been in a long time.
Richmond:
In February in our Richmond office, offers accepted for less than asking or at asking price were 62% of the market, while bidding wars were only happening on approximately 38% of the listings.
Just as buyers were beginning to feel that the market pendulum was swinging back to their favor, things heated up again in March. We saw a sharp rise in multiple offers as it became clear that the number of buyers was still outpacing the inventory.
By the time our March report was published, offers over the asking price had increased to 50% of all sales!
Peninsula:
In February in our Peninsula office, for example, offers accepted for less than asking or at asking price were 59% of the market, while bidding wars were only happening on approximately 39% of the listings.
Just as buyers were beginning to feel that the market pendulum was swinging back to their favor, things heated up again in March. We saw a sharp rise in multiple offers as it became clear that the number of buyers was still outpacing the inventory.
By the time our March report was published, offers over the asking price dipped just a bit to 36%.
Williamsburg
In February in our Williamsburg office, for example, offers accepted less than asking price climbed to over 50% of the market, while bidding wars were only happening on approximately 25% of the listings.
Just as buyers were beginning to feel that the market pendulum was swinging back to their favor, things heated up again in March. We saw a sharp rise in multiple offers as it became clear that the number of buyers was still outpacing the inventory.
By the time our March report was published, offers over the asking price doubled in 30 days, representing 50% of all sales.
Northern Neck
By the time our March report was published, offers over the asking price dipped just a bit to 36%.
It seems that the market is delivering mixed signals right now, but I believe what is really happening is that there are several different markets colliding at the same time:
• For listings that are well priced and in good condition, there are still fewer homes available than there are buyers who need or want to move, and so that segment of the market is still pretty “hot,” with multiple offers and sellers enjoying the upper hand.
• For those sellers who have jumped into the market at the last minute (fearing that they’ve missed the gravy train of 2021 and early 2022, and accordingly pushing the envelope with unrealistic prices), they are experiencing a longer time on the market, and weary buyers pushing back with lower offers containing normal contingencies.
Markets are also experiencing different activity levels based on price point and location, which can seem confusing. Now, more than ever, it’s important to have a seasoned agent advising you on negotiating strategies whether you’re a buyer or a seller (or both).
Thinking about making a move? Let us guide you through these market conditions!
Tags: lizlocal-NorthernNeck-realestate, lizlocal-richmond-realestate, lizlocal-williamsburg-realestate, lizlocal-peninsula-realestate, MarketTalk
By: Liz Moore
Welcome to Market Talk!
I’m Liz Moore, President of Liz Moore & Associates, and today we’re going to talk about what’s happening in the local real estate market. This past year was a roller coaster ride, and it has left many people questioning whether now is a good time to move. The market is actually pretty complicated these days, and it’s important to have a solid understanding of what’s happening and how it will affect YOUR move.
My goal is to bring some clarity about what’s really happening in the market, and how you can leverage that to accomplish your personal real estate goals.
So, let’s get to it!
The biggest story last year has been the dramatic increase in interest rates. While that may have been a positive influence on our savings account ROI, it dramatically dampened the real estate market by causing prospective homebuyers to hit the “pause” button as they watched their monthly house payments significantly increase in record time.
Fewer buyers in the market resulted in a slowdown in multiple offers (in many cases, but not all), which in turn slowed down the percentage of listings that are selling above asking price. For the first time in several years, buyers are once again in a bargaining position to ask for closing cost assistance from sellers, to negotiate repair requests from home inspections, and in some cases to even pay less than asking prices.
So, in a nutshell, the pendulum has swung back toward a more balanced market. You’ll see in the chart below that offers over asking are running less than 30% in our local market, while offers under asking have crept over 40% of all offers. It’s important to note that these trends differ based on price point and neighborhoods, and your REALTOR can counsel you on what is trending in the specific market you’re considering.
What does this mean if you’re interested in buying? It’s definitely good news. Although interest rates took a big jump last year, they have come down over a percentage point since the peak at over 7% last Fall. Several local lenders are marketing programs offering a credit toward a later refinance if and when rates do come down. There are also a number of creative financing options available, like an interest rate buy down or adjustable rate mortgages, that make ownership in the current climate even more affordable. Your REALTOR can review your options with you, and recommend a local lender who has such programs available.
For most, not having to pay thousands of dollars over list price, guarantee appraisals, and waive home inspections and repairs more than makes up for the increase in interest rates.
Perhaps even more important to weary buyers is that they have more choices than they have had for quite some time. Not only is inventory beginning to tick up, but the pace of the market has slowed, eliminating the frenzy that has characterized the past few years. This means that buyers can consider their choices in a far more reasonable market climate.
For those considering selling this year, the market is a bit more complex. Inventory remains low (although we’re anticipating an increase in available listings as the Spring season warms up), which means sellers are still commanding strong prices, even when there aren’t bidding wars. And, for those sellers who will turn around and buy, it’s finally a market that will allow you enough breathing room to accomplish a door-to-door move.
My advice to sellers who are considering a move is to do it sooner rather than later. Local inventory is hovering just less than 2 months. The uptick in inventory may mean lower offer prices as as the market continues to cool.
As I said at the onset, the market is complicated these days, and it’s more important than ever that you have an experienced professional advising you. I recommend that sellers reach out to their REALTOR for an annual “equity check-up” to review the current market value of their home. That’s a great opportunity to discuss any improvement plans to see if the cost vs. value ratio makes sense, as well as explore what's happen in the mortgage world. Knowledge is Power!
Tags: lizlocal-NorthernNeck-realestate, lizlocal-richmond-realestate, lizlocal-williamsburg-realestate, lizlocal-peninsula-realestate, MarketTalk
Welcome to Market Talk!
I'm Liz Moore, President of Liz Moore & Associates, and today we’re going to talk about what’s happening in the local real estate market. It has been a crazy few years, that’s for sure…and folks have a lot of questions. So, we’re going to tackle the big ones today: if you’re a seller, have you missed your opportunity? And, if you’re a buyer, how do you avoid over-paying in this crazy market?
My goal is to bring some clarity about what’s really happening in the market, and how you can leverage that to accomplish your personal real estate goals.
So, let’s get to it!
Lots of people are concerned that we are headed for another real estate bubble. It’s hard to turn on the news and not hear someone talking about the housing market getting ready to crash.
My personal opinion is that is not going to happen. To be clear, the market is stabilizing, and we’re experiencing that right now. I think it is safe to say that the market has “peaked” and we’ll come back to what that means for sellers and for buyers.
However, stabilizing or correcting does not equal a market crash or a bubble bursting, like it did in 2008. The fundamentals in the housing market are VERY different than they were in 2008.
First of all, the housing inventory situation is totally different. In 2008, we had 8+ months of inventory or, “supply”. Now, we have less than a month.
Next, one of the primary reasons for the 2008 crash was ridiculously lax lending standards – mortgage companies would literally approve a mortgage for anyone who could fog a mirror. Today, the opposite is true – mortgage underwriters are extremely conservative making sure that borrowers can afford the monthly payments they are applying for.
Lastly, people have more equity than ever, and even if they faced foreclosure, they would be able to sell.
What all that means is that people are in a far better position to weather a tough economic period than they were 15 years ago. t’s pretty clear that we’re going to face some serious inflation in the coming months, but that is not likely to cause a rash of foreclosures. Even for those folks that are unable to afford their
current living situation, there is plenty of demand and equity to give them enough room to sell without facing foreclosure.
Ok, Liz, if the real estate market isn’t going to crash, then what *is* going to happen next?
Well, it’s already happening. The market is beginning to stabilize. This is happening for a couple of reasons:
The recent increase in interest rates has taken some buyers out of the market. Each percentage point of increase translates to a loss of buying power of approximately 10%.
Prices were escalating so quickly that buyers have begun to put the brakes on. At Liz Moore & Associates, one of the trends we follow very carefully is what we call an over asking report. The percentage of listings that are selling over the asking price remains high even after a slight dip.
Let’s look at interest rates for a moment. This graph shows rates since 1971. Over the last 50 years, rates have averaged 7.77%. So, we still have a ways to go before we reach the average.
As demand slows, we’re seeing fewer bidding wars (although there are still some), and as a result sales prices are not being driven up to the extreme levels of a few months ago.
So, does that mean that sellers have missed the boat? Not at all. Although they may have missed the crazy frenzy at the height of the market, a listing that’s in good shape and well-priced can still expect to sell relatively quickly and probably for full price, or at least close to it. Maybe only 2 offers to choose from rather than 17.
As the market continues to stabilize, we will see a return to more normal negotiating terms: no longer will buyers be forced to waive appraisals and home inspections if they want a house. We’re beginning to see home sale contingencies again.
My advice to sellers is this: If you are contemplating a move, you would be wise to do it sooner rather than later.
Buyers have had a really rough go of it for the past 2 years. And, because many buyers are actually sellers on the other side of the transaction and vice versa, it will actually finally be a good time to consider moving up Over the past year, many sellers stayed on the sideline because they didn’t want to get into the frenzy on the other end.
Over-paying has been a major buyer concern given the market dynamics of the past few years. Let’s look at appreciation trends and see what they really mean:
The wild card here is that we can’t really forecast what appreciation is going to do; all we can do is look at historical averages and make our best guess
Which is why when we’re counseling buyers, we encourage
them not only to look at their house as an investment or “asset,” but also as their HOME. Buyers need to make a choice given their options. For instance, if the choice is between renting and owning, you need to consider that rents rise with inflation. And so, although you may be paying a higher interest rate right now, your monthly housing cost will be fixed, as opposed to subject to 3-5% annual rent increases.
Make your best offer, and as long as you plan to be in your new home long enough, appreciation is likely to offset what you may have to over pay. Your REALTOR® can review appreciation trends specific to your neighborhood with you.
Contact us to learn what this data means for your specific situation!