2019 DIFFERENCES IN THE REAL ESTATE MARKET
The good news is interest rates are really low, Amazon’s second headquarter (HQ2) is coming to Arlington; Google is coming to Reston; and unemployment is in the single digits. According to the Bureau of Labor and Statistics, unemployment in the Metropolitan area was 3.5% as of February 2019. The median income for our area is approximately $100,000 and the market is selling a similar number of homes as last year . Additionally, we just experienced the largest interest rate drop in 10 years at the beginning of March 2019. So why does it seem so much harder to find the right house?
One theory is that millennials and First Time homeowners are shaking up the industry. According to Rob Wittman, Director of Growth at Dutko|Ragen Homes & Investments, Millenials had a year over year gain in homeownership three times all age groups combined. Now, those groups are beginning to form households, have good income, and as rents rise they see the value in owning homes. They are able to buy houses and take advantage of lower down payment programs to get the house that they want.
The biggest factor in the 2019 Metro DC spring real estate market is that there are more buyers and not enough houses. Unfortunately, the Metro DC real estate market does not have enough houses for sale and there are not enough houses in the area to support the population growth long term. Building new homes is difficult because there is not enough land or the land is too expensive to make economic sense. This might intersect with Amazon’s HQ2 announcement that some people who thought they might sell are now waiting to see how Amazon’s newest headquarter will impact the value of their homes. This is especially apparent in Arlington where inventory is very low.
After the Great Recession, many savvy home buyers were able to afford their “forever” homes. They went straight from a condo to a house or were qualified to buy a home that may have otherwise been unaffordable. For those homeowners they have longer term plans to stay in place. . Many homeowners who could sell are waiting because they don’t have anywhere to move to. In this inventory constrained environment, sellers are waiting until they find the right house before putting their home on the market.
Additionally, many people are holding on to their homes as rental properties.
Investment properties provide rental income and for many of these homeowners they benefited from purchasing their home with sub 5% mortgage interest rates. Homes that benefit from a low mortgage interest rate and are in demand areas with rising home values become attractive rental properties if you are prepared for the hassle of being a landlord.
EXPECTATIONS AND HOW TO GET AHEAD
Another significant is that more homes are selling off market. That means that many homes are selling before they are even put on the open market. The reality is that if you are using Zillow, Redfin, Trulia, or other online platforms as your sole source for house hunting, you are not seeing everything that is available for sale. Many homes sell before they even make it to those websites.
In general, people who want to get a home in Metro DC’s spring real estate market need to adapt to these shifting market trends. Having saved searches online isn’t a competitive strategy anymore. As soon as a house hits the internet, thousands of other people have immediate access too. Savvy home buyers need access to off-market properties- this is the new competitive advantage. Dutko|Ragen Homes & Investments has an extensive coming soon program. In 2018, 24% of our homes were purchased off-market. In 2019 that number will be even higher. With years of experience investing in real estate locally we have been sourcing off-market homes for years.
If you want to get ahead of the competition, give us a call (571)249-3551 or email info@dutkoragen.com to speak with one of our 5 star agents.
If you want to make a move, or you need a real estate team to source opportunities you might not be able to find give us a call.
Citation Reference – https://www.redfin.com/city/12839/DC/Washington-DC/filter/status=active