Katie Wethman’s Real Estate News – January 2019

January 2019

Happy new year from the Wethman Group!

January started once again with a bang as serious buyers came out from the holidays with resolutions to buy, and started their home searches well before the “spring season.” We typically see an increase in buyer showings and offers right out of the gate in January, and this year is no exception. Inventory shortages remain and buyer motivation is strong in our area, despite the shutdown.

Amazon Update

Katie was featured on NBC4, sharing her take on the Amazon announcement and what that means for renters, buyers & sellers in the DMV. Check our her interview HERE!
Follow us on Instagram & our National Landing Facebook page for more details & updates!

What does the government shutdown mean for sellers/buyers?

So far, in our area, we aren’t seeing a *significant impact* on the market; but it’s early in the year, and our buyer demand has been strong enough to absorb any slack caused by buyers dropping out of the market.
According to a National Association of Realtors survey of over 2,200 members taken in January, over 75% of members saw no impact to their clients’ contracts or closings. A smaller amount, only 11% of members, noted that they saw an impact to their current clients, and an additional 11% reported an impact on their potential clients.
Interestingly, clients that decided to delay their home purchase made their decision based on the current economic uncertainty, even though many were not furloughed federal employees.
FHA/VA loans are also not seeing as much impact during the shutdown, as HUD had a contingency plan in place. There could be marginal delays in processing due to under staffed offices, but most are operating.

2019 Market Predictions

Interest Rates: Rates are widely expected to continue their general upward trend. The FED increased interest rates three times in 2018, but have been on a recent (temporary?) decline. While interest rates may slow down real estate markets in other areas, the DC Metro area won’t feel the impact as much given its diverse buyer demographic and transition of government, military and contractors every few years. There might be a slight slow down in home sales, but that is likely due to lake of inventory available to current home buyers.
Inventory: In the DC Metro Area, inventory will remain low, especially for townhouses and lower priced single family homes, and especially close in (NW DC, Arlington, Alexandria, Falls Church). This inventory crises has been in place for some time, and is not due only to the Amazon hype. In fact, we are not expecting Amazon to bring a significant impact to the area this year, as many of the jobs are being hired from the local talent pool, and will be phased in over 10+ years. See our previous Amazon analysis and predictions. Nonetheless, we expect our existing inventory shortage to continue to worsen, especially in price points from $450k-$1.2M.

Tax Law Changes

As we enter tax filing season, don’t forget that new tax brackets and tax rates were passed late last year, and there are a host of changes, especially for homeowners. The standard deduction amounts have nearly doubled, making itemizing less beneficial, and the personal exemption amount has dropped to $0. State and local tax (SALT) deductions are now limited to $10,000 which is a real hit in our area. Mortgage interest on the first $750,000 of debt is still tax deductible, but HELOC interest is only deductible to the extent it was used to improve a primary residence, and Private mortgage insurance (PMI) is no longer deductible. Consult your tax adviser for details.

Interest Rates

Rates have remained mostly steady the past month:
30-Year Fixed 4.37%
30-Year Fixed VA 4.37%
15-Year Fixed 3.87%

FREE Home Buyer Webinar

We’re hosting a Home Buyer webinar on Feb 27 which will include an Amazon update, tax law update, and other factors to consider when buying a home.Click here to register.

LISTING SPECIAL!

Thinking about selling your home in 2019, or know someone who is? Meet with us by the end of February and you’ll receive Commission incentives, a FREE HOME VALUATION and a FREE HOME CLEANING (up to $350) when you list with us. Contact Katie to schedule your appointment!

LISTINGS

Check out our newest homes for sale!

HOME CARE CORNER

Winter is in full swing! Make sure to grab an extra bag of salt, an ice scraper and sturdy shovel to help when snow arrives! If you are out of town, make sure to leave your heat above 55 to prevent freezing pipes!

LOANER PROGRAM ITEM OF THE MONTH: MOVING TRUCK

Use our truck locally (free of charge) if you are a past or current client! Remember you can use our truck for non-profit related activities too! We were glad to lend our truck recently for a ‘Help the Homeless’ coat drive!
We’re happy to help with all your residential and commercial real estate needs throughout the DC metro area. Remember to Like us on Facebook for market updates and real estate tips!
We have a nationwide network of quality agents–let us know if you or someone you know needs a referral to another city.
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Katie Wethman’s Real Estate News – Dec 2018

December 2018

 

Market Update

As expected, the announcement from Amazon caused a a bounce in sales, particularly in 22202 “National Landing.” Typically activity and sales in November is slower, as we ease into the holiday season. This past month, 22 properties in the National Landing area went under contract compared to 3 homes in 2017. This is a substantial increase, driven by buyers trying to purchase so that are not priced out of the area once Amazon arrives. But don’t panic…see our own analysis in November’s Amazon Update and take a look at the George Mason University Conference on HQ2 Imapct Video Here. Despite the hype, have identified some cash flow positive investment opportunities, so contact us if you’re looking to invest!
Other areas outside of “National Landing” saw a increase in activity and sales in November, but not as dramatic of a change. Read more details here.
The country’s real estate market is predicted to enter a downtown in the coming 2-3 years, and Amazon may help buoy this area in an otherwise turbulent economic time. Follow our ongoing analysis and updates on ourInstagram and our National Landing Real Estate page. 
In other market news, home sale appraisal rules are changing. Some FNMA and Freddie Mac rules are already in place that eliminate the need for appraisals on certain home types with a sufficient down payment, and the administration has proposed eliminating appraisals on any home valued at under $400,000; instead it would be subject to a ‘evaluation’ by non-appraisers with limited regulation. This is a mixed bag for home buyers and sellers, as many home buyers see the appraisal as a safety net against overpaying for a property. Given that appraisals typically take 1-3 weeks, the elimination of this requirement would likely speed up settlements, and this change will save borrowers about $400-500 in fees. Check out more details here.
New Loan Limits & Interest Rates
The Federal Housing Finance Agency (FHFA) recently announced its new loan limits for 2019. The new (regular) conforming loan amount impacts nearly every part of the US, and was raised to $484,350 in 2019! A 6.8% increase compared to $453,500 in 2018. In higher cost cities, which includes the DC Metro area, the new limit is $726,525.
Current Interest rates (Source: Freddie Mac)
30 Year Fixed: 4.63%
5/1 Arm: 4.04%

Thinking of Selling? Our team is looking to get a jump on the Spring market and is currently setting up consultation appointments for January and February with sellers. We’re offering special financial and staging incentives for sellers who meet and sign with us before the end of February for a Spring 2019 listing—if you or someone you know is thinking of selling next year, please contact us to book an appointment!
As always, if we can ever help with your real estate needs, please don’t hesitate to reach out. Wishing you all very merry holidays and a happy new year!


HOME CARE CORNER
Winter is officially here! If you haven’t turned off your hose bibs, now is the time!
Click here for details: Hose Bib Shutoff Instructions.


CLIENT APPRECIATION EVENTS
THANK YOU to all of our clients that attended Pie Day and Breakfast with Santa! We loved seeing you! thank you for supporting our business all year long with your referrals of friends and family.
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The Wethman Group’s Real Estate News – November 2018

November 2018

 

We’re taking a break from our usual newsletter format to provide an analysis of the Amazon HQ2 announcement. The Washington area and more specifically the newly christened “National Landing” area of Crystal City (comprised of parts of Pentagon City, Potomac Yards, and parts of Alexandria) will be the home of 25,000 new jobs, providing a boost to the local economy and tech ecosystem.
What We Know
  • Amazon has committed to 25,000 jobs over a 10 year period. They chose this area in part because of the extensive talent pool already here (emphasis added). Jobs are expected to be mostly in accounting and tech with incomes of about $150k. Of course, a ‘new’ business with such a significant presence is also expected to create jobs in supporting industries like retail, construction, and service businesses nearby (with lower incomes.)
  • Amazon has made a commitment to STEM education investments, including a new Virginia Tech campus focused on Computer Science as part of National Landing, and investments at George Mason. The idea here is that Amazon is hoping to hire some homegrown (and local) talent years down the road.
  • Incentive payments to Amazon are dependent on the actual number of jobs created.
  • Arlington and Alexandria have committed to investing $570 million in transportation improvements, and Virginia has committed to an additional $195 million. Planned investments are additional entrance(s) to the upcoming Potomac Yard metro station, improvements to Rt 1, pedestrian bridges. Additional funding is available if Amazon creates more than 25,000 jobs.
Much has been said about this number of employees creating havoc in our already strained real estate market. We’re advising our clients to take a wait-and-see approach on the real estate market impacts. Our area is more than capable of absorbing these jobs, but market impacts will be uneven both economically and geographically.

Job Absorption

This area is well positioned to absorb the expected 25,000 jobs to come over the next 10+ years. The region already annually adds 34,000 jobs on average; in 7 of the last 17 years we absorbed one FULL (50,000) Amazon’s worth of jobs! (See graph at left.) This could end up being a ‘blip’ in the greater regional area.

 

Companies whose talent is being poached may or may not backfill hiring, and those companies are scattered throughout the region. Many employees hired locally will not relocate because it just won’t make financial sense and/or the situation will be complicated by a spouse’s commute or kids in school. Consider a hypothetical tech worker making $150k and living in the Reston area. If hired by Amazon (and remember, they’re coming here for the existing talent pool), is this person likely to sell their current home and relocate to Arlington? It’s possible, but it’s more likely this person will just factor in their new commute as an opportunity cost in taking the job. That employee’s current employer will then need to hire someone, who may or may not live in Arlington. See graphic at right for expected distribution of housing for HQ2 employees.

Rising commercial rents in the area may push some existing companies out and/or discourage others from locating there; in fact, other companies that had been considering relocating to Northern Virginia may now choose not to come at all because of the upcoming fight for talent. Similarly, some companies located in the greater metro region may choose to leave because of the expected increase in competition for employees or may choose to locate further out so that their employees will be able to afford more (potentially giving them a recruiting advantage.) Bottom line: the net job increase for the area may not be 25,000, and the jobs-to-household ratio is far from a 1:1 correlation.

Traffic

It’s no surprise that traffic is expected to be worse as workers move to Crystal City and nearby businesses grow. It remains to be seen how much the transportation investments from the County, City, and State will help. Work from home trends may also spread out the hiring and ease commutes–Amazon is one of the top ‘work from home’ companies. Additionally, the high speed (15-minute commute) trains being developed between DC and Baltimore over the next 10 years–the time frame of Amazon’s growth here–could significantly alter the housing landscape of the region.
Housing Inventory – Sales and Rentals
We can certainly expect an inventory shortage for buying, but also a more significant rental shortage in the short term (first few years) of the deal. Speculators will swoop in hoping for to find a cash flow positive deal—they’re unlikely to find one currently. As always, buy and hold is a much safer strategy, and especially now.
Longer term, builders can build condos and/or convert existing apartments and office buildings to condos for quicker delivery. There isn’t much (any??) land left to build developments, so expect prices on townhouses and single-family detached homes to rise disproportionately vs, condos in the immediate vicinity. There is a strong pipeline of multi-family development already planned for the DC area (see graph). Tear-downs will swooped up by builders at breakneck speed.
Once the employees arrive, the segment most likely to see increased competition is the $400-600k range, which is the likely purchasing power of someone in the salary bracket Amazon is hiring.
Certainly, this will speed ongoing gentrification of South Arlington and affect nearby pockets of relative affordability that currently exist. With our current affordability crises, even a small increase in prices may have a disproportionate ‘push out’ effect for lower-income workers and renters, and any increase in property taxes resulting from higher valuations will also hurt longtime homeowners on fixed incomes.
Summary
  • These jobs are coming over time, and our area is easily capable of absorbing them.
  • Expect a short-term psychological bubble – sellers should take advantage of this, buyers need to not panic, and investors should proceed cautiously. Think rationally and don’t get caught up in the hype.
  • Expect dramatic rent increases as a result of the trifecta of this area being the ‘next big thing’, eventual students at the new VT campus, and new hires relocating (who will rent for a least a while before buying, if they buy at all.)
  • Housing impacts will be dispersed throughout the area and gradual. Inventory shortages will be most severe in the segments and locations we already have them: entry level townhouses and detached homes in close-in Arlington and Alexandria.
  • Appreciation in property can only be realized if you’re selling, and is a double-edged sword—expect higher property tax assessments (and remember that deductions for state and local taxes like property taxes are now capped in the new tax law.)
There ARE opportunities here, if we don’t lose sight of the fundamentals.
We’re trying to give you a realistic view of market conditions, and not just trumpet the hype. We’ve seen some excellent opportunities in parts of South Arlington and the northern end of Alexandria. Contact us to discuss your buying or selling strategy.
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The Wethman Group’s Real Estate News – October 2018

October 2018

Market Update
The October real estate market is holding firm, and not letting up! In the DC Metro area the average sales price is $508K, a 3.3% increase compared to 2017. The average days on market has declined 7% which likely has to do with limited inventory. Popular neighborhoods in Arlington, Falls Church, Fairfax County and Washington DC are all averaging 35 days on market or less. Inventory remains tight and there is roughly 9.3% less inventory compared to the same period in 2017. Despite lower inventory, buyers are still looking for nicely updated homes that are move in ready! Contact us today to find out market specifics in your neighborhood.
Interest Rates
Many people are focused on interest rates and for good reasons. In September, The US Federal Reserve raised short term interest rates for the third time this year. We are on track for one more increase in 2018. While rates are historically low, compared to 6-8% mortgage rates in the early 2000’s, an increase to 4.9% for a 30 year fixed mortgage feels like a pinch to many current buyers. While the hype of low rates from internet lenders may seem attractive, working with a reputable lender is still key to ensuring your contract makes it to settlement.
What are buyers looking for?
Real feedback from our listings and clients:
-Buyers are looking for move in ready homes with updated kitchen and bathrooms.
-Most buyers prefer hardwood floors or light colored carpet.
-When touring a home, if there is sign of wear or lack of maintenance, buyers question the condition of the major systems and appliances.
-While big ticket items are important, most buyers are interested in the cosmetic updates in a property.
-If a home is not updated, buyers are looking for a discounted price.
-Many buyers would rather pay for the upgrades through the sales price/mortgage than handle renovations after closing.
-Even with limited inventory in the fall, buyers are not rushing to purchase right now.
If you need assistance prepping your house for sale, call us!
Thinking of buying? It’s better to start sooner than later, even if your target move date is months away…with a lot of buyers ‘waiting until next Spring’, it’s a great time to find a great home with less competition from other buyers!

       ENTER OUR COLORING CONTEST!         

This month, we’re trying something a little different — a coloring contest! We’ll have 4 age groups, and the winner of each group will win a $25 Target gift card.

Age groups are 5 years and under, 6-10, 11-15, and 16+. Click here for a downloadable PDF of the picture to submit, and be sure to sign the picture and add the participant’s name and age.

 

 

This month, we’re trying something a little different — a coloring contest! We’ll have 4 age groups, and the winner of each group will win a $25 Target gift card.

Age groups are 5 years and under, 6-10, 11-15, and 16+. Click here for a downloadable PDF of the picture to submit, and be sure to sign the picture and add the participant’s name and age.

 

Just post your entry on Facebook, Instagram, or Twitter and tag theWethman Group or your agent. You can also email submissions or drop off at our office. Register by October 25th for your chance to win!


HOME CARE CORNER

Fall is here! That means plenty of leaves and limbs are falling too. Make sure to check out your gutters and clear any leaves or debris to ensure your gutters drain properly!

 

 


CLIENT APPRECIATION EVENTS

Save the Date: Pie Day – Tuesday, November 20th
Our annual pie day open house will take place the Tuesday before Thanksgiving at Katie and Kenny’s house. Clients, save the date on your calendar to stop by for a bite and a drink and bring home an apple or pumpkin pie for your Thanksgiving celebration. It’s one of our favorite events each year, and we look forward to sharing it with you! Clients, check your email or our postcard for the link to reserve your pie!

Also, Save the Date for:

Breakfast at the Movies with Santa – Saturday, December 1st

As always, if you or someone you know has a real estate need, please reach out. We are here to help!
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The Wethman Group’s Real Estate News – September 2018

September 2018

The kids are back to school, and we’re back to the hot real estate market!
Activity picked up after Labor Day, and we’re seeing more of the same this month. August stats appear to be in line with prior years’, and no worse. The Median sales price is up ever-so-slightly, and inventory year over year remains about the same. Typically in September we see a little pop in inventory as sellers try to get a deal done before the holidays and year end.
Anecdotally, we’ve been seeing some softness in certain market segments, particularly the $1.2M+ single family detached market. It’s too soon to say whether this is a blip or the start of a larger trend, but market dips typically do start in the upper brackets, evidenced by longer days on market. Builders largely target this market at the expense of the mid-range single family market, adding insult to injury. We’re seeing similar pockets of relative ‘softness,’ and an increase in listings selling for just slightly below list price, unlike the bidding wars of the Spring.
Our local wild card, with 3 jurisdictions in the running, continues to be the Amazon HQ2 search. Rumors abound as the Amazon Board dined at the Renwick Gallery last week. Our inventory issue would be wildly exacerbated if our area ‘wins’.
Want a more in depth discussion of your targeted area? Just give us a shout!
Thinking of buying? It’s better to start sooner than later, even if your target move date is months away…with a lot of buyers ‘waiting until next Spring’, it’s a great time to find a great home with less competition from other buyers!

 

 

 

 

HOME CARE CORNER 

Zillow has come out with a report on the ‘paint colors that sell’ and the verdict is that black or charcoal front doors sell better. Reach out to us for painting advice, whether it’s on colors or contractors, before painting for a sale!

 

CLIENT APPRECIATION EVENTS

Save the Date: Pie Day- Tuesday, November 20th

Our annual pie day open house will take place the Tuesday before Thanksgiving at Katie and Kenny’s house (we know, we can’t believe it’s time to plan for fall already either!). Clients, save the date on your calendar to stop by for a bite and a drink and bring home an apple or pumpkin pie for your Thanksgiving celebration. It’s one of our favorite events each year, and we look forward to sharing it with you!

Also, Save the Date for our Breakfast at the Movies with Santa -Saturday, December 1st

As always, if you or someone you know has a real estate need, please reach out. We are here to help!
The Wethman Group
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The Wethman Group’s Real Estate News – August 2018

August 2018

MARKET UPDATE
Up, up, up! Prices and sales volume increased like the temperature in July for the local area housing market. Each year the DC housing market tends to peak in volume and price in June, with July starting to show a taper down to a lull in August and then a nice little pop again in September into October before quieting down significantly at the holidays for winter. Each month represents some seasonal differences (for more information on WHY, join our next first time home buyer webinar to learn about the factors that affect the real estate calendar year) which is why you’ll always see us comparing figures from the same month in the previous year.
Median home price reached the highest July price of the decade, up 3.4% from July last year, but down a seasonal 3.4% from the June all-time high the month before. As you may remember, we reported last month that sales volume (new pending sales and closed sales) was down in June from the previous year, which is somewhat out of sync with current trends. July saw the uptick in sales volume from last July we were expecting to see, with 3.2% more new pending sales in July this year over last July- again the highest July in over a decade.
If you’ve been following our newsletter for a while now, you may be able to guess what is at play AGAIN here: inventory! Our quick explanation (and what we are seeing play out with our clients) is that in June many buyers frustrated with the low inventory, just didn’t buy.
July inventory saw a few more new listings- up 1.6% over July 2017 (but down a seasonal 13% from June). However, active inventory for July (the properties remaining available for purchase) decreased again year-over-year for the 27th straight month, down 6.4% from July last year, meaning buyers scooped up all those new listings plus some. We are still 14% above the lowest inventory of the decade in 2013, but buyers are feeling the lack of choice and what we are seeing is some creative deal making and buyers revising what their “dream” property looks like rather than continuing to wait on inventory that just isn’t increasing.
We are helping buyers understand the current market, how to approach the search and prioritize trade-offs and walk away with the keys to their new home all the time! With interest rates holding steady, many of our buyers are gearing up for the little pop in inventory we usually see each September.
Thinking of selling? With near historically low inventory, it’s a great time. There is still time to get your house ready for the September shoulder season before buyers go into hibernation. Regardless of whether you are thinking of buying or selling, get in touch to start the conversation so we can come up with the best strategy and outline a potential timeline for you!
CLIENT APPRECIATION EVENTS
Save the Date: Pie Day- Tuesday, November 20th
Our annual pie day open house will take place the Tuesday before Thanksgiving at Katie and Kenny’s house (we know, we can’t believe it’s time to plan for fall already either!). Clients, save the date on your calendar to stop by for a bite and a drink and bring home an apple or pumpkin pie for your Thanksgiving celebration. It’s one of our favorite events each year, and we look forward to sharing it with you!
As always, if you or someone you know has a real estate need, please reach out. We are here to help!
The Wethman Group
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