Across the country, economists made 2020 real estate market predictions that anticipate moderate industry growth. Although interest rates are historically low, economists anticipate tight inventory levels to continue without significant increases in the foreseeable future.
According to The Washington Post, “the real estate industry is being dragged down by scarcity in housing stock, especially at lower price ranges.” There are many reasons for this, including the inability to loosen up lower priced properties. Many “move-up” buyers do not have anywhere to go; and the ones who do buy a second home are holding on to their first homes as rental investments. Additionally, housing is more flexible than in years past. Many home owners choose to renovate, expand, or even turn their home into an Airbnb. Low interest rates are driving buyers to start their home search because they can afford more. However, the competition at lower price points is against savvy investors and people who are not maximizing their purchasing power.
While low inventory levels benefit sellers, it presents a challenge for buyers. This especially rings true in our local market. Our real estate experts track local inventory levels to help set expectations for our buyers and sellers. Most recently, for homes in the $700K and under category, there was 10 days of supply with 5 active homes and 15 under contract in Arlington County. In the City of Alexandria, there was just 7 days of supply with 8 active homes and 33 under contract. Additionally, Fairfax County had the highest level of inventory with 263 active homes and 518 under contract, which is equal to just 15 days of supply.
These numbers show that our 2020 real estate market is tight. There are more buyers than sellers, which means the competition is greater. With less than a month’s supply across the board, we are finding that the market is even more constrained than it was in 2019.
We are witnessing the story that many of the 2020 real estate market predictions told us. The majority of homes for sale are previously owned. New construction still does not meet our area’s population growth; and by 2040, the region will be short 40K housing units, including apartments, condos, and single family homes. We are not seeing the development of large sub-divisions at affordable prices. Current construction trends are to tear down one house and replace it with one house, which does not solve the housing issue.
Although the 2020 real estate market means that sellers are in the best position to market their homes for a premium, both sellers and buyers need to do their homework. We recommend a complete analysis of inventory of the immediate area where you are buying or selling. Look at the inventory levels within a specific neighborhood. This will provide a broader sense of the immediate market and will allow you to prepare accordingly.
If you want to buy a home and especially if you have a specific timeline in mind, we recommend that you start early. For example, if you want to move in June, start looking in February. Flexibility is the key to winning in this type of market. When the competition is high, the winner is usually the one who is willing to put up the maximum dollar with fewer protections in their offer.
If you are thinking of buying or selling in this market, we suggest that you seek out professional guidance to help you through the process. Our real estate experts are highly dialed into off-market properties. We have a large network of agents with coming soon properties, and we have our own extensive coming soon program. We do what it takes to help our buyer clients win the offer; and in this type of market, we go the extra mile, especially if someone is committed to a particular community. For example, we have sent letters to the community, researched homes that were for sale but didn’t sell; and helped our buyers get into those houses.
Both buying and selling can be a stressful experience. However, with the help of real estate experts such as ours, the process is simplified. We help our sellers get their homes refreshed to show well and priced appropriately to get top dollar. If you are thinking of buying or selling in this 2020 real estate market, plan to meet with one of our real estate experts who can help set expectations. We offer free, no-obligation consultations.
For more information, call 571-249-3551 or email firstname.lastname@example.org.