Housing prices have surpassed even 2005 bubble prices in some cases, as DC remains among the least affordable cities for housing. So why aren’t people selling? One theory is that many still can’t afford to cover their transaction costs, and since many purchased on 100% loans–widely available 5 to 7 years ago–they would be walking away with very little money, making a move not worthwhile. And many of those who bought and remain in their homes may not have the high credit standards and savings required of today’s borrowers, making a new purchase very difficult, and trapping a ‘generation’ of sellers, who typically move every 5 to 7 years, in their current homes.
But if prices continue their quick ascent as we’ve seen these past few months, those sellers may be able to jump in. Some industry experts are speculating there are ‘shadow consumers’ that will soon emerge with repaired credit from mis-steps early in the housing bust, ready to buy again. And as if we needed more demand, the Administration is pushing lenders to make home loans available to people with weaker credit, so that they too can participate in the housing recovery.
Buyer continue to face stiff competition, and our team routinely sees multiple offer situations, escalations, and waived contingencies. Katie was quoted in the past week’s Washington Post real estate section in their feature: DC Area Home Buyers Find That Competition in the $500,000 Price Range Can Be Fierce.
Further fueling buyers, new conventional loan products that require only 3% down are emerging, competing with FHA which was previously the best option for those without a big down payment. But yet another painful round of new fees have made FHA very unattractive, and conventional lenders have responded with new products to snap up market share.
Thinking of jumping in to purchase for the first time, trade up, or buy investment property? (And who wouldn’t when you can lock in 30 year rates still in the 3.25-3.75% range?!) Give us a ring, or attend our free first time home buyer classes at Arlington Central Library, scheduled for 7 pm on April 23rd and June 5th. Register here. Need to refinance to take advantage of those rates? We have an excellent network of lenders.
Sellers, contact us to discuss how hot your neighborhood is, or isn’t, and strategies for maximizing your sales price.
The Wethman Group is growing! We welcome Natalie Wiggins and Kenny Garfinkel as agents, joining Brianne and Katie in providing outstanding service and experience to our buyers and sellers. Natalie is a native Northern Virginian and a graduate of the School of Business from Marymount University where she earned her Bachelor’s Degree in Business Administration. Before deciding to become a Realtor, Natalie worked for one of the area’s largest and most prominent title companies. The experience that Natalie gained enables her to provide her clients with exceptional knowledge and service throughout the entire transaction. Kenny is a native Washingtonian, having been born in Silver Spring and lived in DC, MD, and Northern Virginia his whole life. After graduating from the University of Maryland, he worked in child care prior to becoming a sales rep for some of the area’s largest companies. His extensive local knowledge will be a huge asset to our clients!