Late Summer 2020 NRV Real Estate Market Update

Bottom Line: What do you get when you add low interest rates and continued buyer demand to a real estate market with a historically low number of homes for sale? Even higher prices with fairly priced homes selling within days (or minutes) of being listed.

Late Summer 2020 Market Stats

Here are some stats comparing the summer months last year (in a historically ‘hot’ market) with what we have seen in the same time period this year in 2020:

Number of Homes for Sale

Number of Sales YTD

Average Days on Market Before a Home Goes Under Contract

Average Increase in Sales Price for Homes Under $450k

A Note About Interest …

As a buyer, you might see these stats and think it would be wise to hold off on buying until the market cools off. Please consider two things before you do and know that I believe in the first more than the second:

1. With interest rates at historic lows (I’ve seen under 3%!!!) - and I mean historic - like never happened before historic - you might pay more for a property but end up with a lower payment because of the favorable rates. A mortgage on a $300k home at 4% would be $1145/mo. That same home priced $15k higher at $315k with a 3% mortgage would have a $1011/mo payment. Less per month for a home $15k more expensive!

2. If you decided three years ago to wait for prices to fall before purchasing you would still be waiting and a home you could have gotten for $220k then would cost you $270k today.

A mortgage on a $300k home at 4% would be $1145/mo. That same home priced $15k higher at $315k with a 3% mortgage would have a $1011/mo payment. Less per month for a home $15k more expensive!

What all this means for:

Investors:

• If you can take advantage of these low rates, it might be ok to pay market value for a property to have a property in your portfolio financed at this wicked low rate.

• With continued uncertainty due to Covid, it could be worth taking advantage of these sky high prices to sell today and have cash on the sideline ready to redeploy if the uncertainty continues and prices fall - especially starting this fall.

Sellers:

• Wait?! You are considering selling and have not listed your property yet?! Call me right now and let’s get it listed! Prices could continue to rise, however with 1. uncertainty in the future with the economy 2. historically high prices, and 3. historically low interest rates, there might not be a much better environment to sell your property in. Really, now is the time.

Buyers:

• See the note on interest rates above. This market in some ways is a win win for buyers and sellers in that you can pay a little more today and end up with a lower monthly payment because of the low rates.

• This is a market where it benefits to work with a real estate agent. When properties are moving in 3 days or less, you need to be the first to know when something is new on the market and be ready to make a good decision quickly - both of which a good agent can help you with. I get a heads up weekly both on properties that I will list but also on properties that the other 50 agents in my office have coming and can give my buyers a head start. I recently helped an investor friend put a duplex under contract that never went to market he would not have known about had it not been for our connection. I would love the chance to be that connection for you, too!

Conclusion: Low interest rates still make this hot market an attractive time to buy. High prices and an uncertain economic outlook make this a great time to consider selling (get while the gettin’s good). You have to move fast to get a property today, but it is a market where there are truly wins for buyers and sellers.

Do you know a seller who is ready to get their property listed?

Are you trying to figure out how to purchase a home in this fast paced market?

Do you want to learn how to build long term wealth through real estate?

Please get in touch. It would be my privilege to help you out.

Philip Bowling, REALTOR

PhilipBowling@gmail.com

(978) 473-0587 (c)

*Data comes from statistics pulled from InfoSparks, a service provided by the NRVAR.

May 2020 NRV Real Estate Market - Everything's Changed, Everything's the Same

As I am writing this post, states across the US are beginning to slowly reopen after being shut down by Covid-19. While the shut down has affected the real estate market in the NRV, it is not necessarily how you might expect. Read on to get a market snapshot for the area as well as a few takeaways on how this might affect buyers, sellers, and investors.

Bottom Line: The low number of houses on the market has gotten even lower as sellers have decided not to list because of the uncertain economic outlook. This has increased buyer demand even more, driving prices higher and selling the few homes on the market that are priced well quickly.

Market Data

Active Listings for Sale

Number of Sales YTD

Average Days on the Market

Avg Increase in % Sales Price for Homes Under $450k

As you can see from the data above*, sellers have become wary of selling resulting in fewer listings. However, with continued buyer demand these fewer listings are selling in less days on the market for higher prices than they were at this time last year in a historically hot market!

What does this mean for:

Sellers

• Now is a good time to sell. There are buyers hungry for homes and investments in the New River Valley and, at least for right now, you will be listing at a market high with less competition than is typical for a spring/summer market.

• Depending on what changes with the local universities, offices transitioning to work from home environments, and how the economic recovery pans out there is a chance we will see a market decline in the next year making now potentially the best time to consider a sell if that is something you might consider in the next 1-3 years.

Buyers

• If you are waiting for the market to drop due to Covid-19, you will have to wait longer. Indications are that current market conditions will continue through this summer because of continued high buyer demand connected to the growth of the area. The decreased inventory has only increased this demand as there are fewer sellers deciding not to list than buyers deciding not to buy.

• Make sure you are pre-approved with a local lender. Lending restrictions have become more strict in the past couple of months so make sure you will be able to qualify for financing.

Investors

• Risk breeds opportunity. We have not seen a softening of the undergraduate housing market as of yet - properties on the bus line next to the university are still moving quickly for high prices. However, if there is an indication of a change this fall, buying opportunities might present themselves as uncertainty scares some parents and investors out of the market. Have cash and financing ready to go.

• There are currently opportunities to purchase cash flowing homes/townhouses in Christiansburg and Radford. There are two properties in particular I have been watching that I believe would make sound investments. The NRV is still growing and the demand for affordable housing is still there outside of the university market.

Conclusion: For now, even though it feels like everything has changed, in many ways the market has stayed the same: homes moving for close to list price very quickly. Will this last? It is hard to say. More information from Virginia Tech and Radford about their future plans as well as whether or not Covid-19 remerges with a vengeance later in the year have the potential to dramatically impact the market this fall and beyond.

Do you know a seller who is ready to get their property listed?

Are you trying to figure out how to purchase a home in this fast paced market?

Do you want to learn how to build long term wealth through real estate?

Please get in touch. It would be my privilege to help you out.

Philip Bowling, REALTOR

PhilipBowling@gmail.com

(978) 473-0587 (c)

*Data comes from statistics pulled from InfoSparks, a service provided by the NRVAR.

Looking ahead: 2020 Real Estate Market Predictions for Virginia's New River Valley / Virginia Tech

What is in store for the New River Valley, Virginia Tech, and Radford real estate markets in 2020?

Whether you are an investor looking to buy or sell, a VT parent looking for student housing, or a NRV resident looking to get into a new home, you are probably wondering, “What is the market going to do in 2020?” Have we seen the top of the real estate bubble or will the seller’s market we have experienced this past few years continue? After researching local & national stats and consulting with local experts, here is a sense of what you can expect in the year to come in the New River Valley’s real estate market in 2020.

The Bottom Line: Low mortgage rates, a growing economy, and lack of properties for sale will see home prices continue to rise in 2020 - potentially leveling off at the end of the year as new construction begins to even out buyer demand.

Key Stats comparing year end 2018 and 2019 in the NRV:

• 7.4% decline in the number of properties listed for sale

• 4.8% increase in the number of closed sales

• 15.9% decrease in the days a property is on the market for sale before it goes under contract

• 4.5% increase in sale price

• What this means: There are less homes for sale, but the properties that go on the market are selling for higher prices in less time.

“We expect about one in four offers to face bidding wars in 2020 compared to only one in 10 in 2019,” - Fairweather.

What is causing this trend:

• The NRV is growing. The economy is healthy. Virginia Tech is enrolling more students and creating more jobs both at the university and ever-expanding Corporate Research Center.

• Investors who have ridden the market all the way up are looking for stable markets to invest their nest eggs.

• Parents of college students, worried that their child might not have housing, are competing for the few properties that are available.

New developments on the horizon in the NRV:

• Area homebuilders are hard at work with new construction in the area. Predictions are that new inventory coming on the market starting later this year will start to even out what has been a very strong seller’s market.

What this means for …

… Property Owners (especially around Virginia Tech campus):

• Expect the value of your property to continue to increase through the year

• No one can time the market, but do not be surprised if values peak later this year with the new inventory hitting the market.

• Conclusion: Now is a good time to sell to take advantage of a spring market with historically low inventory.

… Home Buyers:

• Even with elevated property prices, continued low interest rates could make now a good time to buy.

• Know your goals. Property will continue to be valuable in the NRV and will appreciate over time. If you are buying with a longer time horizon, even if we are near the top of the market, you will still be investing in a desirable area where home price will rise over time.

• If you can wait … it could be worth waiting for new construction to come online later this year and in 2021 to see if the new inventory starts to level off prices.

… Investors

• Cash is king: with the competition to get into properties in the NRV, more investment properties are selling for cash with no home inspections than normal. If you are able, consider a cash offer that you later finance as this might give you the leverage you need to get the deal done.

• Buy for appreciation in Blacksburg. Buy for cash flow in Christiansburg and Radford. Blacksburg investment properties offer a stable environment where there will never be a lack of tenants … and you will pay for that. If you desire cash flow in the path of progress, consider investing in Christiansburg or Radford.

Conclusion: It is possible that early 2020 will be a peak time for sellers in the NRV - especially investment properties in Blacksburg and Christiansburg.

It is my pleasure to help property owners, investors, and homebuyers to buy and sell properties in the New River Valley.

I would love the chance to meet with you to help you determine what your property is worth and to talk about your home buying goals. Schedule a free, no commitment meeting with me by clicking here or give me a call anytime (978) 473-0587.

Oct + Nov 2019 New River Valley Real Estate Market Update (+ What it means for you!)

This fall has brought a continuation of what has been a trend in Real Estate in the New River Valley (and really all over growing markets across the country). Especially if you are a buyer, what I’m about to say is going to be no surprise for you. But, hopefully can put some explanation to the frustration you have experienced trying to put an offer in on a house only to have it sell out from under you for more than you ever thought it should sell for!

The Bottom Line: Inventory (aka the number of houses that are available to buy in a given real estate market) is down and the number of interested buyers is up.

The Result: Homes continue to sell at historic highs and they sell very quickly.

The Conclusion: It continues to be a seller’s market in the NRV - especially Blacksburg.

Here are some key stats for single family homes, 3000’ or less sq. ft, that sold for under $300k:

• The number of homes on the market are down 14% from this same time last year

• The average sales price rose 5% (that’s great appreciation for just 1 year!) from $203k-$213k

• And here’s a BIG stat - the average days on market fell from 37 to 10!

• Because of this, homes have gone from selling for 97% to 99% of their list price.

What does this mean for me?

… if you are a seller:

If you are a homeowner (or investment property owner), and have thought about when might be a good time to sell, now is that time! I am currently working with a family who just added a beautiful new baby and has outgrown their place and decided to list now to take advantage of this great market.

Could next year be better than this year? Absolutely. For the past few years, people have commented how this increasing market can’t go on for much long … but it continues to. At the same time, no one knows the future, but we do know the present. And at the present moment, if you bought your home more than 3 years ago, you have a good chance of capturing the reward of a good investment in this market.

Please reach out to me if you have any questions about this I can answer!

… if you are a buyer:

1. Think long term. If this is a house you could see yourself in for the next 10 years, then maybe it is worth overpaying for to go ahead and get in. Most likely, 10 years from now in our area, with the growth of industry and universities, you will have made a sound financial purchase. But, keep in mind that most folks stay in a home 5-7 years and then move.

2. Think about your budget. It is not worth it to get into your dream home only to be house poor and have to eat Ramen Noodles every day for the next 5 years. Not that I have anything against Ramen Noodles - I just want it to be my choice whether or not I eat them. My suggestion would be that you budget for your PITI (basically your mortgage + taxes + insurance) to be between 25-30% of your gross income. If you’re in that range and it’s the perfect place, it might be worth it to splurge a little to get it.

3. Get pre-qualified! With homes going as quickly as they are, make sure you have already talked to a local lender who has given you a letter saying that you are pre-qualified for at least as much as the house you are offering on will sell for. In today’s market, some sellers will not look at your offer without this. Connect with me if you have questions about how to do this!

How long do you think this seller’s market will last? If you have any questions I could help you with, don’t hesitate to reach out to me by clicking here! Don’t forget to sign up for my email list on the sidebar to the right to make sure you get more helpful content like this.