Lawernce Yun, Chief Economist at the National Association of REALTORS® states in his recent post on Linkedin:
Inflation is calmer, thereby setting the Federal Reserve to start the rate-cutting process in September. Consumer prices rose by 2.9% in July and look to head towards the desired 2% in a few months.
The Fed has indicated the need to normalize and move away from the current “restrictive” monetary policy and its willingness to cut if inflation moves towards 2% rather than waiting to reach 2%.
Shelter costs decelerated to 5.0%, still high but clearly trending down as a temporary oversupply of new apartment units will further dent the figures. Auto insurance continues to rocket, up by 19% from a year ago. This does not bode well for property insurance bills.
Generally, the rate-cutting cycle is not one-and-done. Six to eight rounds of rate cuts all through 2025 look likely. Whoever sits in the White House in 2025 will see lower interest rates.
However, a super-sized budget deficit could limit the decline in mortgage rates. More government borrowing means less mortgage money to lend. The new normal for mortgage rates will be around 6% and definitely not to 4% as was before COVID.
Let's look at July 2024 Data in Loudoun County, VA, Jefferson County, WV, and Frederick County, VA.
The stats below show what is happening in Loudoun County:
Loudoun County, VA
Closed Sales for July 2024 are up 22.4% over July 2023 and down 2.9% since June 2024.
The Average Sold Price for July 2024 is 9.1% higher than July 2023 and up 2.8% since June 2024.
The average days on the market is 15 days which is 36.4% more days than July 2023 and 15.4% more than June 2024.
How does this resonate with you? Home prices are increasing in value over last month and the same time last year. Buyers are still buying but have time to think before purchasing, and there's a little more available inventory than in years past.
Are multiple offers being made? We are seeing 1 or 2 good offers on homes who score a 9 or 10 in terms of maintenance and aesthetics. Sellers should focus on preparing their homes to maximize their return on investment.
Sellers in Loudoun County, overpricing your home and presenting to the market is not a good game plan. Your home needs to be prices right to attract the buyers!
Closed sales for July 2024 have increased since July 2023.
Jefferson County, WV
Closed Sales for July 2024 are up 12% over July 2023 and down 5.5% since June 2024.
The Average Sold Price for July 2024 is 10.4% higher than July 2023 and up 2.9% since June 2024.
The average days on the market is 26 days which is 18.8% less days than July 2023 and 13.3% less days than June 2024.
Closed sales for June 2024 have increased since June 2023. Sales look like 2020-2021.
Frederick County, VA
Closed Sales for July 2024 are down 5.2% over July 2023 and down 12.8% since June 2024.
The Average Sold Price for July 2024 is 11.3% higher than July 2023 and up 7% since June 2024.
The average days on the market is 43 days which is 53.6% more days than July 2023 and 48.3% more than June 2024.
Closed sales for July 2024 are about the same as July 2022 & 2023.
In conclusion, It looks like interest rates are going to drop in September. The Feds meet on the 17th-18th. Will we have a flood of buyers come off the sideline and be ready to purchase? Will there be more interest rate cuts going into 2025?
There seems to be an increase in inventory in all counties. Sellers still feel that their homes are worth more and buyers think the homes are overpriced. I am seeing a lot of buyers needing homes priced from 700-850k in Loudoun and 400-500K in Jefferson County, WV & Frederick County, VA.
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 a 10 out of 10 home! Also, realize you can ask for contingencies and subsidies on homes that need cosmetic repair. We are not quite in a buyer's market but we are moving that way!
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