Don't Be Fooled by Groundhogs
On Groundhog Day, February 2, 2021, world renowned, season-prognosticator, Punxsutawney Phil, indicated that Spring was at least six weeks away, once again demonstrating his keen awareness of the Vernal Equinox.
Any Realtor® worth his or her salt will tell you that Spring is actually when the official real estate "season" begins, most often sometime around mid March or April. However, anyone paying attention knows that the last two years have defied that general wisdom with strong home sale increases beginning as soon as late January to mid February, depending on factors such as neighborhood and price range. This year Spring may have already Sprung, demonstrating that groundhogs may be all well and good as an excuse to dress up in fun hats while playing voodoo meteorologist, but they won't help you determine whether this is the time to sell or buy a home or tell you what your home is worth this week. For that you need a qualified Realtor®!
In the current, volatile, "up one week and stalled another" market we seem to be experiencing, the wisest consumer will proceed with a seasoned guide to help locate, negotiate, acquire, and close the deal on a property. As noted in previous issues, most sellers who try to go it on their own, or FSBOs (For Sale by Owner), tend to find their home languishes a greater number of Days on Market (DOM) and ultimately sells for less than the average of Realtor®-represented deals in their area.
So if you plan to improve your financial position in 2021, by either investing in an asset you can actually live in or by divesting your current "live-in investment," choose wisely when considering when to move ahead and who you ask for professional guidance and assistance. Call a qualified Realtor®, superior property evaluator, expert negotiator, and real estate investment educator today
The Only Constant Is Change
Real estate, like most businesses, tends to be cyclical but the cycles can vary widely. The current market is unlike any seen before. It has been said that life is poly-causal, meaning that most events have many layers of cause and effect. The current circumstances influencing the value of each home sold today have never been experienced in precisely this exact combination.
Historically low interest rates, historically low inventory, and a global pandemic don't come around every day and almost never together. The uniqueness of this time cannot be overstated. Yet some fundamentals will always apply no matter what the circumstances. The ultimate answer to all real estate questions tends to be quite simply, "It depends."
This is not an original thought, but I am ever amazed at just how well it tends to satisfy most lines of concern. Are we in a buyer's or seller's market? It depends. It depends on which area and price range you are considering, and it depends even more on which week it is. A $4,000,000 home in McLean or Northwest Washington, D.C., is experiencing a different set of influencing factors than a $400,000 townhouse or condo in Leesburg, Centreville, or Manassas.
To further complicate issues, the dynamics of the current COVID-19 pandemic and the economy at large, along with interest rates that fluctuate like gas prices, could leave one believing that the next week’s overall circumstances are anybody's guess - not a comforting thought for those trying to decide whether to move ahead on a major transaction such as buying or selling a house.
Renters are worried that if they don't buy now, they may miss out on the remarkably low interest rates, but they also worry about their job stability and potentially overpaying for a property in a market that regularly sees successful offers to purchase waiving contingencies, and often paying $15,000, $20,000, and even $50,000 over asking price. Sellers are thrilled to have such a robust market, in which they will generally receive multiple offers, but then have the challenge of evaluating those offers for financial stability and likelihood of actually consummating the deal, by bringing it to a successful closing. Deals that fail to close, can be costly in both time and money.
Shifting interest rates, high demand that is elevating property values, an ever-changing landscape of increased vaccine availability combined with new variants of a virus that has held the entire globe in its grip for a full year now, as well as a new and as-yet-unsettled political environment promise that things are bound to change. The primary question then is, "Are they changing for the better or for the worse?" As you must have guessed, the answer of course is, "It depends?" Are you looking to sell or buy a home or business? Do you have a high or low risk tolerance? What is your current financial position and what would you like it to be in a year, five years, ten years?
Regardless of your answers to these questions, the one fundamental that applies now and will apply in the future, is that expert help when making big decisions and executing complex transactions in an ever-shifting environment is usually worth its weight in gold.
It's the Little Things
By now everyone is familiar with the term "curb appeal", but not everyone understands that the concept extends well beyond the curbside.
A friend who served in the military, once shared that the commanding officer on base would routinely observe the blinds in the barracks when driving around the base. He said it was understood that if the blinds were not even when observed from the outside, there was a high likelihood that the inside would have problems. While that may seem like an oversimplification and a leap to a conclusion that may or may not be true, the fact that the commanding officer believed it was all that was really important.
Buyers in search of an elusive treasure, a home that they can afford and that has what they deem not only "curb appeal" but a home where they can see themselves living comfortably for years to come, can be put off by things as simple as unchanged or missing light bulbs, a weathered piece of trim or even a shower with the tiniest hint of mold. In a market that is currently seeing multiple bids on most properties that are properly prepared for market, it would be easy for a seller to adopt an attitude of "Let the buyer fix these minor problems."
This is a question of strategy. What matters most to you? Every seller wants to sell for the highest possible price but competing factors might include their need to sell quickly, or preference to invest their funds in their new home rather than their old one, or perhaps a contingency on their new home that includes delivering a ratified contract on their old house by a date certain. So the decision of how much you invest in preparing your soon-to-be-former home for market can be complex, but minor repairs or touch-ups shouldn’t be dismissed as not worth it.
If the seller wishes to derive the maximum financial benefit while demonstrating that if a thing is worth doing, it's worth doing right, he or she might consider such options as ordering a pre-market home inspection, hiring professional cleaners and painters, and possibly staging as a means to increase the selling price. Even in this overheated, but still unpredictable market, such steps could also potentially shorten the number of days on market.
Staging can be minimalist. Adding just a few items to a few rooms can "imply" a furnished home allowing possible buyers to imagine the potential of each room and how they could live there.
Here is an example where such a strategy was successfully executed, and the winning offer exceeded the asking price.
Whether you decide to put your home or investment property on the market with a little or a lot of preparation, remember that you will generally receive rewards commensurate with your efforts. A little effort can pay big dividends. A lot of effort can do even more.
The Numbers Keep Adding Up!
National Real Estate Statistics from the National Association of Realtors®
Regional Real Estate Stats from the Northern Virginia Association of Realtors®
Off to A Good Start
Check out these homes recently sold & purchased with expert help by the PJ Team
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Whether you hope to find your first or forever home, or whether you're planning on downsizing, upsizing, or dipping your toes into real estate investment, nothing will happen unless you take the first step. Like most worthwhile activities in life, real estate is a participatory and sometimes even a contact sport. My father loaned us the funds needed for a down payment on our first home, but he encouraged us to "Do as much as you can on your own," insisting that anything we attained without real effort would lack real value.
Our most successful clients are those who are beyond wishing for a better or bigger home or even a brighter financial future. They have done their homework and recognize the value of taking action and working with highly qualified professionals to achieve real goals. If you or someone you know is serious about selling or buying a home just give us a call or share this newsletter. We'll bring you the insights and expertise you need to succeed.
Signing-off for now!
We really hope you have enjoyed this edition of the PJ Team newsletter covering news and updates about Virginia Real Estate. If you have any questions for me or the Team, or if you would like to suggest a topic you'd like us to cover, click here.