Last night, I ran into a friend who used to be “in the business” like us – a previously active Realtor who still works in a real estate-related business, but not directly with listing & selling homes. At any rate, he asked me a question that blew me away. . . . “I have a friend who wants to buy a home, but thinks he should keep waiting until the market bottoms out. What should he do?” (Side note: His question reminded me of the old Clash song, “Should I Stay Or Should I Go”) My first thought was, “where have you been and how can you not know what a GREAT time to buy it is?!”
But as I thought about it more, I realized that based on the doom & gloom we read & hear in the news on a daily basis, it probably is a logical question – even from someone who is peripherally involved in the real estate business. And perhaps you, the readers of our blog, may also have this question.
The conversation pointed out to me why it’s so important for Buyers & Sellers to consult the best Realtor they can – one who is very active & an expert in the market you are interested in. We “in the trenches” see things on a daily basis that often lag in being reported to the news media. And the realities of our local market can often be so different than what you hear in the news. It can even differ in markets as close as Arlington and McLean.
I asked my friend whether his friend was a first-time homebuyer. He responded that he was and that he was looking in the $500,000 price range. I told my friend to make sure he knew about the First-Time Homebuyer Tax credit that was part of the Stimulus Package. It’s a great opportunity, but will only last so long. Now is the time to be looking so that you have time to find your home, write a contract, do your inspections, get your loan and go to settlement. First-time homebuyers are eligible for a maximum $8,000 tax credit. But this is only effective for purchases through November 30th. (Note: If the home is sold more than 3 years after purchase, the credit is not even re-captured upon sale. Wow!)
In addition to that information, I shared with my friend that sales are up, inventory is dropping and in some markets (for example – in the townhouse market in Vienna and Oakton), we are actually back to a Sellers Market. In our office sales meeting yesterday, there were multiple agents working with buyers who are dealing with competing contracts on the same property. One agent even had a situation where he received 8 contracts within 2 days of a home coming on the market. And while our Arlington Realtor experts were desperate to find homes for their buyers (inventory is so incredibly low in their area and homes are selling in just days), our McLean Realtor experts are still seeing homes sit on the market for months.
If you’re thinking of moving up – this is also the PERFECT time to sell your current home & find your dream home. Your home may not sell for as much as it would have a few years ago, but the home you are moving up to will also be selling for less. Heres an example say that values in your area have dropped by 12%. The home you live in will now only sell for $666,000 instead of the $750,000 you had hoped for – an $84,000 loss. However, the home you are moving to which originally would have sold for $975,000 is now selling for $858,000 a savings for you of $117,000. In this example, you come out $33,000 ahead and now live in a nicer, larger home.
I let my friend know that he can always keep up-to-date on our local market by checking our blog and I shared with him what MRIS reported this week for our region:
“Home sales remain strong in the MRIS region. For the week ending August 29 there were 2,780 signed purchase agreementsup 32.5 percent from the same week in 2008. That’s the 30th consecutive week of year-over-year increase in pending sales.
With the federal tax credit for first-time buyers set to expire in November, expect sales to continue at a brisk pace for the next two months as the “last call before bar close” buyers take advantage of a substantial market incentive. ”
The bottom line is, the answer to the question “Should I Stay or Should I Go” is not always a definite yes, but in many circumstances it is “YES! DO IT NOW!”.
If you have further questions about whether now is the time to buy or sell, don’t hesitate to give us a call at (703) 242-3975.
Contact us for a free comparative market analysis: http://www.thebeltteam.com/northern-virginia-real-estate/home-values.html
In the meantime, stay tuned to our blog for hyperlocal information about the real estate market here in Northern Virginia!