Although we experienced high summer temperatures in Alexandria and the greater DMV, the Northern Virginia housing market – which was hot, hot, hot for several years – seems to be returning to a more normal pace. Demand is still strong. Alexandria home sales for the summer months were up double-digit percentages from last year according to the Northern Virginia Association of Realtors. But the urgency to buy has dropped as potential buyers leave town for summer vacation, visit family and friends or choose to spend weekends doing something other than attending open houses. Others are taking a break from house-hunting due to fatigue from high prices and bidding wars.
If we are not at the peak at this point, there’s talk that we might be soon. Current data shows an increase in the number of homes for sale, days spent on the market and price cuts, as well as a decline in mortgage applications. What does all this mean if you’re a potential home buyer or seller? "If you’re planning to buy before the end of the year, make sure you’re fully prepared," says Shoshanna Tanner, local Realtor and Team Lead of Shoshanna and Co. of Compass. She suggests:
Get pre-approved: Being pre-approved for a mortgage loan with an accredited and reputable local lender will ensure a financial leg up on the competition. This will show sellers you are well-qualified for the financing and will put you in a more competitive position.
Stick to your budget: Keep your mortgage payment to no more than 25% of your monthly take-home pay on a 30-year fixed-rate mortgage. With the market cooling off and starting to favor home buyers, you could end up in a better position to negotiate.
Work with a Realtor: Buying a house can be stressful. Partnering with an experienced agent is a smart idea. Shoshanna Tanner and her team are top producers in the area year after year. A good agent will walk you through all the complex details of buying a house regardless of what the housing market looks like.
If you are planning on selling your home, here are some tips you can put to good use:
Don’t borrow against your home’s value: Home equity is increasing and more homeowners are staying put in their current homes. Some people might be tempted to tap into that equity by taking out a home equity loan or line of credit. This is not the best idea. It is not worth putting your home at risk for a remodeled kitchen or new furniture. Saving up and paying cash for upgrades is a much smarter move.
Be open to readjusting the asking price: Modern home buyers are savvy and know how to gauge whether a home is overpriced. If your home has been sitting on the market longer than expected, talk to your agent about lowering the price. Even though you might take a small hit, the longer your home stays on the market, the more doubt seeps into buyers’ minds about how great your home really is. If your listing becomes stale, buyers are more likely to skip over it.
Be patient and realistic: As demand levels off, you might see a drop in the number of offers you receive and the sales price escalations may not be as high as they were a year ago. It might also take longer than usual to sell your home as the housing market cools down. The key to getting your home sold for more money in less time boils down to proper preparation and proper pricing. Your agent should be able to help you position your home for a maximum sales price. You also shouldn’t rush to get your home on the market if it isn’t ready. Work with your agent to get your house in order before you try to get it sold.