Lawernce Yun, Chief Economist at National Association of REALTORS® states in his recent post on LinkedIn, The spring home buying market also means more listings. Price the home correctly to the market or it will require discounts to move. See Chart Below:
The longer the days on the market, the bigger the price cuts. You want to price your home right to SELL!
Yun stated last Wednesday, "March inflation figures were bad, which means bad news for interest rates. Consumer prices reaccelerated to 3.5%. This is higher than the 2% target inflation, which raises eyebrows regarding the Federal Reserve’s delay in cutting interest rates".
The promise of a June-July interest rate cut is not promising. The Feds are projecting it might not happen until the end of the year. Will presidential elections in November have any influence on what happens?
Let's take a look at Loudoun County's Real Estate Market Update for April 2024 using March 2024 data:
Closed Sales for March 2024 are down 2.7% over March 2023 but up 34.5% since February 2024.
The Average Sold Price for March 2024 is 10% higher than March 2023 and up 11.7% since February 2024.
The average days on the market is 14 days which is 30% lower than March 2023 and 22.2% lower than February 2024.
How does this resonate with you? Home prices remain stable with increasing growth. Despite high demand from buyers, there's still a shortage of available inventory, mainly comprising new construction projects that have just commenced.
Are multiple offers being made? Absolutely. Multiple offers are becoming common, especially for homes that score a 9 or 10 in terms of maintenance and aesthetics. Sellers should focus on preparing their homes to maximize their returns on investment.
According to Curbio, Inc., a leading pay-at-closing home improvement solution for real estate, nearly half of sellers underestimate the need for updates before listing, despite reports indicating buyers prefer move-in ready homes.
For sellers in Loudoun County, it's crucial to prepare your home for sale. We've transitioned from the COVID era where properties sold effortlessly; now, readiness and presentation are key factors in attracting buyers.
I am also seeing more buyers opting to rent. Yun Stated that one strange data point is rent, which the official data shows at 5.8%. The unofficial data from the apartment industry indicates falling rent due to over-construction. If rent data calms, then overall inflation will automatically be lower. It is, therefore, possible to get to the 2% inflation target by year’s end, even with bumps and delays.
Closed sales for March 2024 and March 2023 are about the same. Is this our new norm? Again, we need more inventory of pre-existing homes to boost this number.
In conclusion, there remains a significant number of prospective buyers in Loudoun County, waiting on the sidelines. Some buyers have opted to rent and see if interest will fall. Is this a wise choice? Will interest rates top out at 8%? Sellers, ensuring your home is meticulously prepared and poised for sale is crucial. Additionally, pricing your home at fair market value is essential. Two vital steps I always recommend are conducting a pre-inspection of your property and obtaining a comparative market analysis or an appraisal before listing your home for sale.
Buyers, be prepared to present your strongest offer when entering negotiations on 10 out of 10 homes!