Real Estate Market in Full Bloom

Real Estate Market in Full Bloom

Inventory slowly increasing as prices continue to rise.

Once again, the average sales prices for homes in Fairfax County rose more than 20 percent over the same time last year, according to statistics from the Metropolitan Regional Information Systems.

In March, with a total of 1,265 homes sold, the average price was $504,733 — a 21.47 percent increase over last March’s average price of $415,519. It is also an increase in price of $17,194 over February’s average sales price, a sure sign that the spring market, typically the busiest time for Realtors, has arrived. Homes on the market an average of 19 days before being purchased, compared with 26 days for March of last year. In total, $845,428,170 worth of property changed hands in March.

“We’ve seen continual significant growth for the past five or six years, but this is the largest we’ve seen so far,” said Amy Ritsko-Warren, at the Northern Virginia Association of Realtors. “It’s just astounding.”

Despite the increasing home prices, the demand for housing in Northern Virginia continues to rise every month, she said, but the number of sales may be beginning to even out.

“We are still selling more houses than we were last year and the year before, but now it looks like we’re starting to run out of houses to sell,” Ritsko-Warren said. “It’s a real challenge working with the buyers who are putting in multiple contracts on houses and escalation addenda,” which is essentially how much more a buyer is willing to pay for a house above their actual bid, she said.

“We keep saying the market will slow down, but it’s not. Prices are going up, interest rates are starting to inch up and eventually, people won’t be able to afford houses here,” she said. “The demand is going up, the prices are going up and we just don’t have any space to build” to ease the strain on the prices of homes, she said.

THE PRESSURE on buyers is so steep, many are taking somewhat drastic measures to move their bid to the top of the pile, said Don Brotman, the principal broker for NovaStar Realty Inc. in Burke.

“People are taking a very aggressive approach to have their offers accepted,” he said. Realtors representing the sellers are happy to promote having inspection and appraisal requirements waived, but it might not always be in the best interest of the buyer.

“Representing the buyer, you need to make sure they understand the risks involved in purchasing a property and waiving those requirements,” he said. “The buyer needs to understand the quality of the property and the real cost of ownership, which is not just getting into the house, but the cost of living there, which might include a lot of repairs that aren’t readily seen.”

Many clients feel “if they don’t get into the market now, they never will” with the ever-increasing prices and diminishing availability, he said, which creates a sort of tunnel vision that can also create problems.

“I’ve seen it over and over again, when I’m asked to look at a property and can see the issues the house has. If I don’t communicate it clearly to my clients, their welfare is at stake,” Brotman said.

THE INVENTORY available in Alexandria has gone up more than 50 percent since the beginning of April, said Michael Turk, managing broker at the Weichert office in Old Town Alexandria.

“We were in the 50 to 60 properties available range in January and February, and we currently have 96 homes available,” he said. That’s fairly typical for the spring market.

“People wait until the flowers come out to put their homes on the market, which means there’s more available, but that also means they are competing with more homes,” he said. “A lot of people feel their homes show better when the grass is green and the trees are green, so they wait until spring when the house could have been sold just as easily if it’d been put on the market in February,” he said.

In order to help its clients’ bids look more attractive to sellers, Weichert tries to cultivate relationships between the buyers and the seller, Turk said.

“We’re trying everything we can to help our buyers because there’s a lot of desperation out there,” he said. “We try to create a situation where the sellers want to sell to our clients, and it definitely seems to be working.”

Turk said he’s been receiving calls lately from clients he worked with years ago on the purchase of a home, thanking him for urging them to buy before prices went up.

“People realize that if you buy a home today, you’ll pay less for it now than what you would in a few months,” he said. “Prices go up every month and people who waited to buy a home a year or two ago thinking the prices would go down are kicking themselves now.”

There’s also the personal satisfaction of knowing that clients who were paying $1,500 each month in rent are taking that $18,000 annually and putting it into the equity of their homes, he said. After five years, homeowners have roughly $90,000 in equity, as opposed to “$90,000 worth of canceled checks,” Turk said.

“THE OPPORTUNITIES afforded to families through buying a home allow them to do so much more with their lives and their money,” he said. “The wealth created by home ownership is affording some people the opportunity to put their kids through college, it’s allowing them to do more with their families and that’s the most rewarding thing this wonderful market has done.”

A client can make their bid more attractive to a seller by offering a “clean” bid, which means “offering cash deals, pre-approval notification from a lender, sizable deposit and down payment, occupancy deals for the seller,” said Casey Margenau, associate broker with ReMax in Oakton.

“Price is always a factor but it’s not necessarily the only factor” a seller will take into consideration when selling their home, he said. “Sellers may sometimes take a cleaner deal over a higher price simply because it’s easier. …

“The market today is better than it was three weeks ago, but in the 30 to 45 days it will most likely dry up again,” Margenau said. “We’re in pretty good shape right now, but there’s still not enough of a supply.”