Real Estate Fact vs Fiction

If you’re following the news, chances are you’ve seen or heard some headlines about the housing market that don’t give the full picture. The real estate market is shifting, and when that happens, it can be hard to separate fact from fiction. That’s where a trusted real estate professional comes in. They can help debunk the headlines so you can really understand today’s market and what it means for you.

Here are three common housing market myths you might be hearing, along with the expert analysis that provides better context.

Myth 1: Home Prices Are Going To Fall

One piece of fiction many buyers may have seen or heard is that home prices are going to crash. That’s because headlines often use similar, but different, terms to describe what’s happening with prices. A few you might be seeing right now include:

  • Appreciation, or an increase in home prices.
  • Depreciation, or a decrease in home prices.
  • And deceleration, which is an increase in home prices, but at a slower pace.

The fact is, experts aren’t calling for a decrease in prices. Instead, they forecast appreciation will continue, just at a decelerated pace. That means home prices will continue rising and won’t fall. Selma Hepp, Deputy Chief Economist at CoreLogic, explains:

“. . . higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”

Myth 2: The Housing Market Is in a Correction

Another common myth is that the housing market is in a correction. Again, that’s not the case. Here’s why. According to Forbes:

“A correction is a sustained decline in the value of a market index or the price of an individual asset. A correction is generally agreed to be a 10% to 20% drop in value from a recent peak.

As mentioned above, home prices are still appreciating, and experts project that will continue, just at a slower pace. That means the housing market isn’t in a correction because prices aren’t falling. It’s just moderating compared to the last two years, which were record-breaking in nearly every way.

Myth 3: The Housing Market Is Going To Crash

Some headlines are generating worry that the housing market is a bubble ready to burst. But experts say today is nothing like 2008. One of the reasons why is because lending standards are very different today. Logan Mohtashami, Lead Analyst for HousingWire, explains:

“As recession talk becomes more prevalent, some people are concerned that mortgage credit lending will get much tighter. This typically happens in a recession, however, the notion that credit lending in America will collapse as it did from 2005 to 2008 couldn’t be more incorrect, as we haven’t had a credit boom in the period between 2008-2022.”

During the last housing bubble, it was much easier to get a mortgage than it is today. Since then, lending standards have tightened significantly, and purchasers who acquired a mortgage over the last decade are much more qualified than they were in the years leading up to the crash.

Bottom Line

No matter what you’re hearing about the housing market, let’s connect. That way, you’ll have a knowledgeable authority on your side that knows the ins and outs of the market, including current trends, historical context, and so much more.

703-242-3975 | Info@TheBeltTeam.com | Contact Us

FREE INSTANT HOME VALUATION – Want to know what your home is worth? Click Here to get our free instant home valuation!

Should You Buy a Home with Inflation This High?

While the Federal Reserve is working hard to bring down inflation, the latest data shows the inflation rate is still going up. You no doubt are feeling the pinch on your wallet at the gas pump or the grocery store, but that news may also leave you wondering: should I still buy a home right now?

Greg McBride, Chief Financial Analyst at Bankrateexplains how inflation is affecting the housing market:

Inflation will have a strong influence on where mortgage rates go in the months ahead. . . . Whenever inflation finally starts to ease, so will mortgage rates — but even then, home prices are still subject to demand and very tight supply.”

No one knows how long it’ll take to bring down inflation, and that means the future trajectory of mortgage rates is also unclear. While that uncertainty isn’t comfortable, here’s why both inflation and mortgage rates are important for you and your homeownership plans.

When you buy a home, the mortgage rate and the price of the home matter. Higher mortgage rates impact how much you’ll pay for your monthly mortgage payment – and that directly affects how much you can comfortably afford. And while there’s no denying it’s more expensive to buy and finance a home this year than it was last year, it doesn’t mean you should pause your search. Here’s why.

Homeownership Is Historically a Great Hedge Against Inflation

In an inflationary economy, prices rise across the board. Historically, homeownership is a great hedge against those rising costs because you can lock in what’s likely your largest monthly payment (your mortgage) for the duration of your loan. That helps stabilize some of your monthly expenses. Not to mention, as home prices continue to appreciate, your home’s value will too. That’s why Mark Cussen, Financial Writer at Investopediasays: 

Real estate is one of the time-honored inflation hedges. It’s a tangible asset, and those tend to hold their value when inflation reigns, unlike paper assets. More specifically, as prices rise, so do property values.”

Also, no one is calling for homes to lose value. As Selma Hepp, Deputy Chief Economist at CoreLogicsays:

“The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”

In a nutshell, your home search doesn’t have to go on hold because of rising inflation or higher mortgage rates. There’s more to consider when it comes to why you want to buy a home. In addition to shielding yourself from the impact of inflation and growing your wealth through ongoing price appreciation, there are other reasons to buy a home right now like addressing your changing needs and so much more.

Bottom Line 

Homeownership is one of the best decisions you can make in an inflationary economy. You get the benefit of the added security of owning your home in a time when experts are forecasting prices to continue to rise.

Please reach out if you need assistance in buying your next home.

Info@TheBeltTeam.com | 703-242-3975 | Contact Us

Home Sale Statistics in Northern Virginia – June and Q2 2022

Although the Northern Virginia housing market is not seeing the crazy peak conditions we have seen in the prior months, the market remains relatively hot. But how can that be when sales were down 32% at the end of June?

Below CEO Terry Belt discusses this, whether it’s still a good time to buy/sell, what he thinks the long term player is in the housing market and more.

Here’s a look at all the June and some Q2 2022 housing market stats for Northern Virginia and links to some of our hyper local markets.

Northern Virginia June 2022 home sales:

3,307 homes went under contract in the region. This is down 32% from the same time period in 2021.

72% of the homes that went to settlement in June 2022, sold in 10 days or less from when they hit the market.

• Average sold price was $734,641 (up 8% from the same time period in 2021).

5,130 homes came on the market. That’s down 17% from June 2021.

• Homes that sold (closed) averaged 10 days on market, 1 day faster than in June of 2021.

• There is currently a 1.1 month supply of homes (remember, in a balanced market – the demand from buyers equals the supply from sellers – there is a 5-6 months supply) in the Northern Virginia – and 3,829 homes for sale (townhouse, condo and single-family).

Additional Quarter-End Stats – 2021 vs 2022:

Average sold price increased by 9.4% ($675,532 vs $738,975)

Total units sold decreased by 19%

Average sales price to original list price ratio increased just slightly – 103.0% vs 103.2%

OVERALL: Northern Virginia remained in a Seller’s Market. Inventory increased again from last month and was up 7% year-over-year.  The number of homes going under contract was down from last month but the number of new homes coming on the market increased slightly…both of these numbers continue to be down significantly from this time last year.  Average sold price was down a bit from May but was up compared to this month & quarter in 2021. 

If you are thinking of buying or selling this year, please reach out to The Belt Team and let us help you navigate this unprecedented market.

(703) 242-3975 | Info@TheBeltTeam.com | or fill out our Contact Us form

To see what the conditions are like in your community, click on the link to your desired city below! 

Vienna: June 2022 Home Sales

Oakton: June 2022 Home Sales 

McLean: June 2022 Home Sales 

Great Falls: May 2022 Home Sales 

Reston: May 2022 Home Sales 

Falls Church: June 2022 Home Sales 

Arlington: June 2022 Home Sales

Alexandria: June 2022 Home Sales  

*Data compiled from SmartCharts, MarketStats by ShowingTime, whose data comes directly from the Multiple Listing Service (MLS).

Expert Housing Market Forecasts for the Second Half of the Year

The housing market is at a turning point, and if you’re thinking of buying or selling a home, that may leave you wondering: is it still a good time to buy a home? Should I make a move this year? To help answer those questions, let’s turn to the experts for projections on what the second half of the year holds for residential real estate.

Where Mortgage Rates Will Go Depends on Inflation

While one of the big questions on all buyers’ minds is where will mortgage rates go in the months ahead, no one has a crystal ball to know exactly what’ll happen in the future. What housing market experts know for sure is that the record-low mortgage rates during the pandemic were an outlier, not the norm.

This year, rates have climbed over 2% due to the Federal Reserve’s response to rising inflation. If inflation continues to rise, it’s likely that mortgage rates will respond. Greg McBride, Chief Financial Analyst at Bankrateexplains it well:

“Until inflation peaks, mortgage rates won’t either. Without improvement on the inflation front, we don’t know where the interest rate ceiling will be.” 

Whether you’re buying your first home or selling your current house to make a move, today’s mortgage rate is an important factor to consider. When rates rise, they impact affordability and your purchasing power. That’s why it’s crucial to work with a team of professionals, so you have expert advice to help you make an informed decision about your best move.

The Supply of Homes for Sale Projected To Continue Increasing

This year, particularly this spring, the number of homes for sale has grown. That’s partly due to more homeowners listing their houses, but also because higher mortgage rates have helped ease the intensity of buyer demand. Moderating buyer demand slows down the pace of home sales, which in turn helps inventory rise.

Experts say that growth will continue. Recently, realtor.com updated their 2022 inventory forecast. In the latest release, they increased their projections for inventory gains dramatically, going from a 0.3% increase at the beginning of the year to a 15.0% jump by the end of 2022 (see graph below):

Expert Housing Market Forecasts for the Second Half of the Year | MyKCM

More homes to choose from is great news if you’re craving more options for your home search – just know that there isn’t a sudden surplus of inventory on the horizon. Housing supply is still low, so you’ll need to partner with an agent to stay on top of what’s available in your market and move fast when you find the one. It’s not going to be easy to find a home, but it certainly won’t be as difficult as it has been over the past two years.

Home Price Forecasts Call for Ongoing Appreciation

Due to the imbalance between the number of homes for sale and the number of buyers looking to make a purchase, the pandemic led to record-breaking increases in home prices. According to CoreLogic, homes appreciated by 15% in 2021, and they’ve continued to rise this year.

Even though housing supply is increasing today, there are still more buyers than there are homes for sale, and that’s maintaining the upward pressure on home prices. That’s why experts are not calling for prices to decline, rather they’re forecasting they’ll continue to climb, just at a more moderate pace this year. On average, homes are projected to appreciate by about 8.5% in 2022 (see graph below):

Expert Housing Market Forecasts for the Second Half of the Year | MyKCM

Selma Hepp, Deputy Chief Economist at CoreLogic, explains why the housing market will see deceleration, but not depreciation, in prices:

“The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.

For current homeowners looking to sell, know your home’s value isn’t projected to fall, but waiting to make your purchase does mean your next home could cost more as home prices continue to appreciate. That’s why, if you’re thinking about buying your first home or you’re ready to make a move, it may make sense to do so now before prices climb higher. But rest assured, once you buy a home, that price appreciation will help grow the value of your investment.

Bottom Line

Whether you’re a homebuyer or seller, you need to know what’s happening in the housing market, so you can make the most informed decision possible. Let’s connect to discuss your goals and what lies ahead, so you can determine the best plan for your move.

703-242-3975 | Info@TheBeltTeam.com | Contact Us

FREE INSTANT HOME VALUATION – Want to know what your home is worth? Click Here to get our free instant home valuation!

Search Northern VA Homes For Sale By School

Over the years, we’ve noticed many of our clients rank “school district” as one of their top search criteria when thinking of buying a new home. Whether it’s because you have children in school now or because you’re thinking about resale value – school district can be an important factor. For example, some buyers look for schools that offer AP (Advanced Placement) classes. While other buyers are more interested in a school that offers the IB (International Baccalaureate) program. Some require a school with a GT program. And others are looking for special assistance. We’ve even had clients choose a home based on a particular high school baseball team they are targeting. And others who search for homes based on who has the best theater program. In Northern Va, there’s something for everyone!

So we made it easy for you! Our robust search function on our web site allows you to search by school in Northern Virginia along with many other criteria.

Click Here to Start Your Search!

Are you ready to find your next home?  Reach out to The Belt Team today and let our knowledge and experience work for you!

703-242-3975 | Info@TheBeltTeam.com | Contact Us

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