After several years of continuous price gains, the real estate market seems to be reaching its price cap. In June, the last month for which we have complete numbers, 14% of all listings saw a price cut. That's up from a low of 11.7% at the end of 2016.
In the same month, housing demand fell 9.6%, the largest decline in over two years. Mortgage applications to purchase a home have decreased as well.
A few things are at play here. One is rising mortgage rates, which have been steadily climbing for much of this year. Another is an overall decrease in affordability, resulting from a combination of the growth in home prices and mortgage rates.
If this is the start of a buyer's market, it's unlikely to be just a momentary blip. One sign of this is that homebuilder sentiment has recently fallen to the lowest point in almost a year. In other words, homebuilders are losing confidence in their business due to the aforementioned affordability concerns.
So what does this mean for you?
Well, it's certainly good news if you're looking to buy, because it means you will have more choice at more affordable prices.
On the other hand, if you've been thinking of selling, this might mean that it’s time to act. Listing your home now would give you the best odds of achieving a top price before the change in the market occurs.
Remember that all real estate is local. There are big differences even within the Northern Virginia area, and prices can change from block to block.
If you want specific information about the current Northern Virginia real estate market, or you're mulling over the idea of buying or selling a home, please give me a call at 703-328-3434 or email me at Janet@TheGreshGroup.com. I look forward to hearing from you soon.