Here are just a few of the national real estate numbers we are tracking for you now. For more info contact us.
In the News
Local Market Update
December was busier than normal for sellers and buyers!
In the DC area, the market remains hot. There were 695 sales, which topped the December average of 673 homes sold. Pending sales and active listings were also higher than previous years. The month’s supply dipped to just below 1.5 months of inventory! Most homes were on the market 18 days or less.
In the Northern Virginia area, there were 2,599 sales in December which is lower than the five-year average. This is similar to the number of sales the same period in 2016. Pending and active listings were lower than previous December averages, but more homes were sold throughout the entire year compared to volume in 2016. The month’s supply also dipped to 1.4 months (from a 2.0 average) confirming that there is less inventory for buyers. The average days on market also decreased in most counties compared to sales in December 2016. The market is still strong in most counties.
Thinking about selling your home in 2018? Don’t wait for Spring! The serious buyers start looking as early as February, and we typically see higher prices and multiple offers for our sellers *very* early in the season! Contact us to get a free consultation for your home and updated market analysis of your neighborhood.
( Data & graph from SmartCharts by Showingtime)
Tax Law Update & Market Impact
The tax bill is now final and is largely the same as what was in the combined bill coming out of committee. A brief refresher:
– The bill allows a “pass through” deduction of 20% of income to an LLCs, S-Corps, and partnerships for income up to $315,000 (phases out completely at $415,000). Details are still being studied by CPAs everywhere, but this could be a good tax-saving opportunity for owners of rental properties.
– The bill allows mortgage interest on the first $750,000 of debt to be deducted.
– Itemizers can deduct a combined state and local tax PLUS property taxes but CAPS the combined deduction at $10,000.
– The “2 out of 5 years” exclusion on capital gains on the sale of a primary residence remains.
In our area, we don’t expect to see a significant impact on the immediate real estate market as a result of the tax bill. While homeowners with mortgages > $750k will certainly be impacted, it’s not likely to cause large numbers to change their home buying or selling decisions. The cap on SALT deductions has a larger impact on more home owners locally, but the increase in the standard deduction, combined with lower rates overall, makes it unlikely that most home owners will see a change significant enough to impact the buying and selling (at least until the individual cuts sunset down the road). Of course there are always exceptions, but in general, I do not expect a big shift in our market currently. We’re already seeing a lot of buyers and sellers getting ready for spring, and while they’re all curious about the new law’s impact, we’re just not seeing it change anyone’s plans yet.
The law *will* eventually have an impact on first time buyers, who will see less of a tax advantage, or no advantage at all, to buying vs renting. Of course there are other incentives, financial and otherwise, to owning, so buyers won’t disappear, but it may take longer for it to make financial sense for first time buyers, which will slow down their entry into the market and have a ripple effect upwards.
Client Appreciation Program and Events
WG PERKS Client Appreciation Program Launch
We are always looking for ways to show our clients how much we value you! We are excited to roll out a new Client Appreciation Program for 2018: WG Perks! As part of the program we will continue to offer our moving truck, client appreciation events, and loaner library, and have added for 2018 free office services (copies, faxes, and notary service), new loaner library equipment, and monthly drawings for some great prizes! If you are a client and did not receive your invitation to participate, please email us at firstname.lastname@example.org.
WG PERKS LOANER LIBRARY ADDITIONS:You probably know we have a free moving truck, but we’ve also now added 2 warming buffets, a large coffee urn, and a 4 foot table, available for your short-term use. Need to take down those holiday lights? Ask us about our 22′ ladder! Just email us at email@example.com reserve an item for pickup.
First Time Home Buyer Classes – Coming Soon ONLINE!
In 2018 we are taking out popular First Time Home Buyer Classes online! Beginning in February, we will be offering a free online webinar that covers: deciding to buy, financing, your home search, and trends in the local market, among other topics. Register here and we will keep you in the loop when the dates are set, or forward this to a friend who is thinking about starting their search!
As always, if you or someone you know has a real estate need please reach out. We’re here to help!
The Wethman Group
- Local Market Update
- Tax Bill Update
- Fed Increases Rate
- New Loan Limits
Conventional wisdom dictates that is better to buy than rent. However, in many of the nation’s most expensive markets, like DC, the decision to buy is increasingly more difficult. The metro’s renters are conflicted, on one hand their monthly rent is more than $2,200, yet DC home prices are rising yearly making it ever more challenging to enter the market.
In May, it was 31 percent cheaper to buy than rent nationally, according to Trulia, and It is still cheaper to buy than rent in DC today. With the Federal Reserve threatening another interest rate hike in December, now is the time to buy a home in the DC metro.
Here are six areas in the area where renters can save substantial money by choosing to purchase a home in Washington, DC or Northern Virginia.
Adams Morgan, Washington, DC
It is 22 percent cheaper to buy than rent in this multicultural neighborhood with a diverse restaurant scene for the average foodie. The median sales price for Adams Morgan DC real estate is $560,000 and the median rent is $2,875. Renting costs average $2,745 per month while buying costs average $2,154 per month. Choosing to buy in Adams Morgan would save a renter close to $600 per month.
Mount Pleasant, Washington, DC
Located north of downtown, Mount Pleasant is a short metro ride from the heart of the District. Its nearness to shopping and Rock Creek Park make it one of the District’s most desirable neighborhood. This may account for its lofty median rent of $4,650 per month. Renter’s in this neighborhood should become owners. Despite the median home sale price of $890,000, it is 24 percent cheaper to buy a home in Mount Pleasant. Renters could save $12,000 annually by choosing to own.
Columbia Heights, Washington DC
Just east of Mount Pleasant, Columbia Heights is another one of the District’s more sought-out neighborhoods. Its median rent is $3,625 while the median sales price of homes is $625,000. It is currently, 28 percent cheaper to buy than rent in this District neighborhood. In seven years, a renter could potentially save $60,000 by investing in Columbia Heights real estate now.
Arlington with its many office buildings, is popular with both young adults and families seeking a shorter commute. Those living in Arlington VA spend $3,056 per month renting whereas homeowners only spend $2,265 per month. Making it 26 percent cheaper to buy than rent. Renters could save over $66,000 in a seven-year period by choosing to invest in Arlington real estate.
Falls Church, VA
Falls Church, just west of Arlington, offers a great suburban experience. It is 21 percent cheaper to buy than rent in this Northern Virginia community. The median sales price of a home in Falls Church $540,000. Renters spend $2,650 per month while homeowners spend $2,081 per month.
The choice to buy instead of rent is a slightly tougher choice for residents of McLean, VA. Buying offers a 10 percent advantage to would-be homeowners. In McLean, the cost of rent is $3,296 per month while buying costs are $3,653 per month. The savings per month is $357. After seven years, McLean rents could amass close to a $30,000 nest egg.
The numbers tell a compelling story. DC renters should be encouraged to jump on the home-buying bandwagon. With impending interest rate hikes, the time to start a home search is now. Call us today so you can find a home here and reap the benefits.
Methodology: Rent vs. Buy pricing assumes a 20 percent down payment, a 30-year fixed loan, a 4.35% interest rate, an income tax rate of 25%, and ownership for 7 years.
Katie Bassett is a freelance blogger who covers a wide array of topics within the real estate industry as well as the overall lifestyle for millennials.