HOUSING, MORTGAGE and FINANCE NEWS
1. When Should You Buy Your Next Home?
So, you bought the home of your dreams. What about the next one? When should you sell or rent your current home and buy a new one? It’s different for everyone, but here are a few things to consider:
1. Did you just get a big raise or a new job that provides additional security and income or inherit a property?
2. Has the value of your home appreciated significantly?
3. Has your commute become too long?
4. Have interest rates fallen? Are they significantly below what you are currently paying?
5. Are you starting a family?
6. Has your family grown in numbers or do your children suddenly seem to take up a lot more space?
7. Have your personal goals or life circumstances changed requiring you to downsize or upsize? e.g. New and growing family, disability, divorce, empty nesters, death or inherited property? COVID-19 has caused some buyers to look for larger homes, allowing for additional space to work from home and/or home school.
There are any host of reasons and strategies for buying up. As with your initial home purchase, the markers for making a decision are both objective and very personal. One of the biggest reasons to buy a new home is a change in income. Perhaps you have switched jobs and gotten a significant raise. You might be able to benefit from the larger tax deduction that a more expensive home could bring you. Perhaps your income has dropped. In that event, you might want to consider downsizing.
If your home has appreciated significantly, you can stay in your home while it continues to appreciate, or you might want to take advantage of the market, sell it, and buy a new home – even one that is the same size, but is in an area you would prefer. You might like a shorter commute to work…or you can work from home and would like to do that in a larger piece of property that is further out. Your home is your savings account, and over time, ultimately, it will appreciate. That’s not to say the market doesn’t have ups and downs, but over time, the value of your home will increase.
“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” - President Franklin D. Roosevelt
What about interest rates? In the current market, we are seeing the lowest interest rates in decades. If you are paying a higher interest rate on your current home, you could either refinance to lower your monthly payment, or buy a new home that better meets your requirements. Lower interest rates can allow you to buy more without a commensurate increase in monthly payments. In other words, lower interest rates can make a more expensive home affordable. Before making a decision, talk with your tax accountant!
One of the biggest drivers in making a decision to purchase a new home is a change in family. Many couples will buy their first home when they decide to have a child or shortly after their child is born. Then, the arrival of a second or third child is the signal to buy something larger. However, expanding your family isn’t the only reason to buy a new home. As children grow, so does the amount of space they need in a home. Plan to buy a new home two or three times as your families grow, even as often as every 3-5 years. While you’re at it, make sure you plan for the possibility of your parents moving in with you!
Finally, our personal goals adjust as we live our lives. Perhaps you lived in the city, but now want to be in the suburbs…or the country. Perhaps you’ve raised your family in the suburbs but want to retire to the city. You might live in a townhouse but want a farmhouse…or maybe you want to become a real estate mogul and invest in real estate becoming a landlord or a flipper.
Whatever your needs, the PJ Team can help you every step of the way. Give us a call.
2. Northern Virginia October 2020 Market Statistics
The following statistics are excerpted directly from the Northern Virginia Association of Realtors® (NVAR) November Press Release.
No Slowdown in October for Northern Virginia Home Sales Record October Sales and Listing Activity Reflects Pent-Up Demand for Both Sellers and Buyers
The Northern Virginia Association of Realtors® reports on October 2020 home sales activity for Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton. [They note that October home sales in this area have not been this high since 2004.]
A total of 2,220 homes sold in October 2020, a 29% increase above October 2019 home sales of 1,719.
Active listings increased this month compared with 2019.
Listings were 8.37% above last year, with 2,770 active listings in October, compared with 2,556 homes available in October 2019.
The average days on market for homes in October 2020 fell by 29% to 17 days – compared to 24 days on market for homes in October 2019.
New listings rose by 42.32% in October compared to last year, to 2,966.
There were 2,084 new listings in October of last year.
The average home sale price rose by 11% compared with last October, to $673,955.
The October 2019 average sale price was $607,230.
The median sold price of homes this October, which was $600,000, rose by 9% compared to the median price of $549,900 in October 2019.
3. Our Team
The PJ Team consists of a core group of dedicated Realtors® with more than 30 years of experience in residential and commercial real estate selling, buying, renting, and investing. Our team works closely together to provide you with a higher level of service and advice.
Looking to buy or build your next home now? You can access some of our listings here. Thinking about selling, wondering what your home is currently worth, or curious about real estate investing and how it works? Call or email us today! We look forward to speaking with you directly to answer your specific questions and working with you to address your specific needs.
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We hope you enjoyed this Holiday Edition of our newsletter covering news and updates about Virginia Real Estate.
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The Entire PJ Team Wishes You a Happy Holiday Season and a Happy, Healthy and Prosperous New Year!
