Covid-19 and the New River Valley Real Estate Market

How is Covid-19 Affecting the Real Estate Market in the New River Valley?

To say that all that has happened with Covid-19 in the past few months was unexpected is the understatement of the century. Who would have thought as the economy was humming along at an incredible rate in January that everything would be ground to a stop in March?

While it will not be possible to know the long term effects of Covid-19 on the overall economy and real estate market for some time, here is some information about how the pandemic is affecting the real estate market today.

Covid-19 and the NRV Real Estate Market

• Housing inventory is down in the past month due to Covid-19 fears, however home values have remained stable.  Home values are projected to remain stable for at least the next 6 months because of continued buyer demand.

• For investor owners, as of April, 2020, we have just seen a slight decrease at Townside Property Management in the pace of leases being signed for the fall.  However, even in the midst of Covid-19 we still have leases being signed for next year every day.

• You might consider refinancing your mortgage.  Rates are at historic lows and you could potentially save a substantial amount of money every month by refinancing at a lower interest rate. Fannie Mae projects that interest rates will continue to fall through 2021.

New Development Continues around the NRV

In Christiansburg on 114:

• Stateson Homes continues construction on the Clifton Town Center, modeled after the Daleville Town Center in Botetourt that will feature townhomes, apartments, office space, and a hotel.  

• Fralin Homes plans to begin developing 9 acres near New River Village into 14 townhomes and 132 apartments that will be called Magnolia Pointe.

• Takeaway:  There will still be homebuyers and renters who want to live in a mature associations and neighborhoods with full grown trees and wider streets.  Upgraded homes in established areas will continue to be highly desirable.

In Blacksburg

• Multiple builders are developing hundreds of bedrooms of luxury’ student housing that are renting for $700-$1100 per person per month - most are fully furnished.  Examples are Park37, The Retreat, and The Edge which are fully developed. 

• Terrace View on the corner of Tom’s Creek and Patrick Henry is under new ownership and going through extensive renovation. Jefferson St. Apartments on East Clay are adding 255 new bedrooms across 6 buildings that will rent for $400-$500/bedroom.

• Takeaway:  Many students will be priced out of the luxury market and will be looking for medium priced rentals that still offer some of the upgrades of the luxury units.  The increased rent that older, but upgraded, units can get can make them a good value even in today’s market.

Conclusion

• Even in these uncertain times, the real estate market has remained stable. There are less listings, but those still listings are still moving quickly for close to list price. Anecdotally, in the past week I listed a property, closed on a property, and am about to put 2 properties under contract - things are still happening!

• However, there is uncertainty in the market, which can lead both to buying and selling opportunities for savvy buyers and sellers.

• Continued, historically low interest rates make now an incredible time to refinance if you have an interest rate over 4%. The rates also create a unique buying opportunity - a lower rate essentially allows you to purchase a property on discount.

How are you feeling about the real estate market in the midst of Covid-19? I’d love to hear from you and help in any way I can!

If you have been thinking about getting into real estate as an investor or first time home buyer, with the extra time we all have on our hands, now is the perfect time to educate yourself to get ready to jump in the game when things pick back up. Please let me know if I can point you in the right direction!

Get in touch anytime - I’m here to help!

philipbowling@gmail.com // 978.473.0587

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.