“So, how’s the market?”
Have you been curious about the market lately? Have you been wondering if now is a good time to buy or sell? If so check out our latest Market Update video and transcript below!
Jeff Edmisten: Hey everyone. Jeff Edmisten and Ruthie Buck here, the Edmisten and Buck Team at Coldwell Banker Elite and it’s time for another real estate market update. This is March of 2020 and the burning question on everybody’s mind Ruthie is …
Ruthie Buck: Everyone is always asking is “How is the real estate market in Fredericksburg?”
Jeff Edmisten: And the answer you’re going to get to that is hot. It’s freaking on fire. But what does that mean? I mean really, what does that mean? What makes it hot?
Ruthie Buck: So really there’s a couple of different things. One being inventory is at our lowest that it has been since 1993, almost the lowest it has been in 30 years.
Jeff Edmisten: Thirty-year low for inventory. Also tagging with that, the months of inventory which means the homes that are on the market right now at the pace they’re selling, how long would it take to sell?
The average right now nationally is three months. It has never in recorded history been three months nationally like that. We’re seeing the exact same thing here in Fredericksburg. The months’ worth of inventory is at three months. That’s an extreme seller’s market.
Ruthie Buck: Well, for much of our area locally, we see that the number of homes for sale is down 23.7 percent over the same as time of last year.
Jeff Edmisten: So the homes that are for sale has taken a nose dive. That inventory is really, really low. But the counterpoint to that is buyer demand is high. Now that’s largely because interest rates are so low. They’re expected average over the next two years as 3.8 percent, which means there’s a lot more buying power that the buyers have if they’re buying a home today. What that means is with the interest rate being low, they can finance the same amount of money for a lower payment and that’s making demand really, really high.
Ruthie Buck: So I’m sure you’re wondering. Well, how high is demand? In our region, existing homes is up anywhere from 8 percent to 12 percent.
Jeff Edmisten: So if we think about the supply and demand concept here, we’ve got kind of a crash of both of those components. Inventory is at a 30-year low. Buyers, buyer activity is up 8 to 12 percent. That’s the classic definition of a buyer’s market.
Ruthie Buck: So what is happening to home values? So with our home values, key parts of our region are seeing an annual increase of a value of more than five percent.
Jeff Edmisten: So five percent annually. That’s pretty significant. The median sales price in the Fredericksburg area right now is $325,000 and how that applies to homeowners is if your home is valued at below that median, you’re actually probably seeing an increase even faster than that five percent.
Studies have shown that if your value is 25 percent below the median right now, you’re increasing at a rate of 2 percent faster than the rest of the market. So those homes will sell really quickly and you’re probably gaining more value than you think.
Ruthie Buck: So with this and all this or knowing all of this, the bottom line is, “What does this mean for buyers and sellers?” So for sellers with demand so high and supply so low, this really puts sellers in the driver’s seat. It’s a perfect time to sell. You can get the greatest dollar value with the least hassle right now because of our low inventory.
Jeff Edmisten: The real challenge here is for buyers. So buyers first and foremost need to be patient. Those homes – the home that you’re looking for will come on the market very likely and you have to be patient for them, for that.
The second key component though is when it does come on the market, you got to act immediately. There’s no time to really ponder and think about it and take days to make an offer. You got to act immediately.
The other thing I would recommend to buyers is if you’re actively in the market, you should be working with a real estate agent that has a plan for getting – for knowing what homes are out there that aren’t on the market, that off-market inventory that exists, and you should have a plan to have a package together so that when you’re making an offer, you’re going to position your property, your offer, to be more competitive than those that you’re competing with.
Ruthie Buck: And that would be our update for up through February to this point in March. Thank you for watching us.
So thank you again for watching another segment from the Edmisten Buck team.
Jeff Edmisten: And we would suggest you head over to our website at the www.therealinrealestate.com if you’re in the market to buy or sell because we have some great guides over there that contain really relevant and current information and we think it’s the very best place for you to start the process of buying and selling. It gives you information, step-by-step actions and information that you need to know about the market. So go on over to www.therealinrealestate.com.
Ruthie Buck: So specifically in my own personal neighborhood, Salem Fields, what this means and what this shows is currently we have 11 pending contracts in Salem Fields right now. There are only two active homes in there. One we know that has about come on the market. There are two active and in the past four months, we’ve actually had 17 closings in Salem Fields.
Logan Edmisten: Hi. I’m Logan Edmisten. We’re seeing the same thing in Caroline County as well. Our homes for sale, our inventory is down 36.5 percent while our demand is up 16.5 and our average sales price is up 13.5 as well, which is even more than what’s going on and even more extreme than what’s happening in Fredericksburg right now.
Jeff Edmisten: Absolutely. In our community that Logan and I live in, Lake Land’Or, right now there are 18 homes under contract, only 14 properties for sale. At the current pace that the homes are selling in there, we only have two and a half months of inventory and remember, a little bit ago we talked about being three months of inventory nationally which was a historic low. So we have an even bigger supply and demand crisis here in Lake Land’Or. Same things apply. If you’re selling, great time to do it. If you’re buying, it would be really …