Real Estate Market Updates

It's been a minute since I've talked about agency and all of the proposed changes that are coming down the road in real estate. So, here's a little check-in just to give you an idea of where we are. So as of right now, it looks like changes are going to take place on August 17. That's when things are going to start looking different. Although, if you're the consumer, the buyer, or the seller, they're not going to look that different to you. So what does that mean? It means that, as of that date, we are not going to be able to see the compensation that is offered on the listing side to the buyer's agent. I had a conversation with someone the other day, and he asked, what that's going to look like for him when he goes to sell his property. Basically, a lot of things are not going to change. More things will stay the same, then will change as these changes come around. But ultimately, you always have had the right to negotiate commissions. You always will have the right to negotiate commissions. What I will say is that there are always ways to make your home more marketable and more appealing to both the buyers and the agents showing it to get it to the top of the list and often that's going to be the commission, the willingness to work with commission. Just as it would be for buyers to get closing costs or any other incentives to make an offer on your property over another one. So as we see these changes come on and as new things happen, I'll come out and give you an idea of how it's going to impact you and what's changing. All of those things are going to also change as the market continues to change. So if you want a concise assessment of how things are going to look for you as the consumer whether you're on the buying side or the selling side, follow me here or send me a message, get on my email newsletter, and stay up to date on how things are working and how it will affect you in real estate.

If you've been thinking about getting into the real estate market, whether you're thinking of buying or selling, you have probably heard a lot about all of the changes that are coming primarily regarding commissions in the real estate industry. If I talk to five people a day, I get five different opinions on how they perceive those changes to be coming and how they will affect them. So stay tuned here, subscribe to my YouTube channel, sign up for my newsletter, and stay abreast of all of those changes and how they're going to affect you possibly, whether you're buying or selling. As things change, and continue to develop, we're going to get more information and as I have that more information, I'm going to pass it on to you, because I do think agency is one of the most confusing things in this industry. Certainly right now because everybody has a different opinion. There is lots and lots of misinformation out there, unfortunately, so it is super confusing. My goal is to decode a lot of that for you and make it a little easier for you to wrap your brain around whatever side you're on, buying or selling. So if you have any questions about agency and all of what that entails, shoot me a message, send me an email, or give me a call. I'd love to help you unpack all of the information and get to the bottom of how it will affect you.

All the things to know about what you see in the news about the real estate industry And wow. There has been a LOT of news out there lately. You’ve probably seen the headlines over the last week or so, about the “seismic” changes coming to the real estate industry. Lots of info out there feels an awful lot like clickbait, to say the least, and in most cases, it's quite confusing and misleading. Here’s a little recap of what’s happened, what’s happening, what’s (likely) to come, and most importantly, how it might affect you if you are thinking about buying or selling real estate. This is all facts, with my thoughts in italics... What's happened: Over the past few months, there have been a couple of class action lawsuits brought against the National Association of Realtors and some of the larger players in the real estate space. In short, a class of homeowners in Missouri allege that they had no idea that they had choices when listing their home, did not know they could negotiate, and felt that they paid inflated fees when listing and selling their homes. While the suits were going on for a while, the big news came in the last week, when the National Association of Realtors agreed to settle this case. IF the settlement is approved by the court, they've agreed to pay out $418m over the next four years, AND make some substantive changes to the way the system works, and the way agents are paid. The changes that will go into place, should they be approved: Compensation offered by sellers will no longer be visible in MLS. What this means: Up to now, commissions have been distributed this way- Sellers list their home with a listing agent for a fee (for the purposes of this exercise, we're going to use an imaginary number of 10%). FROM that fee, they agree to offer compensation to the buyer's agent. (In many cases, half, so in this scenario, from the 10% listing fee, each agent gets half at closing.) This compensation offered to the buyer's agent has always been visible in MLS, and as is to be expected, there are agents who have been accused of "steering," or taking buyers only to see homes that pay them well. This will go away to eliminate any real or perceived steering of clients. Buyers working with a buyer's agent will need to sign a contract with that agent prior to viewing any homes. This is really only a variation of what's going on now, and has from years. You should really always have a very good idea of how your agency relationship works- what your agent does for you, how they get paid, and who is paying them. Part of this is getting it all in writhing. This covers the agents, yes (because we can't and don't work for free), as well as the buyer, who better understands the buyer agency they're in. What these things mean and where I think the media has things a little twisted: There is lots of news out there saying that "The 6% Commission is Gone!" and while that is definitely attention grabbing, it's a bit more nuanced than that. First and foremost, commissions are now and have always been negotiable. Now, this doesn't mean that the agent you want, or the services that you know will fit your needs, will cost what you want to spend- but there are many, many options in the marketplace. I liken it to a little black dress- you can buy one at Walmart, Nordstrom, or Saks Fifth Avenue. They are all a little black dress, but they are definitely not the same price, nor the same quality. There may be a time and a place for each option, but they're not interchangeable.  Our industry was definitely ripe for some change, so this will definitely bring about some interesting changes and business models.  Sellers and listing agents will likely, in many cases at least, still offer buyers' agents commissions as part of the transaction. While there will need to be a contract in place between buyers' agents and buyer clients that states the buyer will pay the commission should none be offered, my expectation is that sellers who want to get the most qualified buyers in there homes will indeed still use this as a form of incentive.  In the cases (and there will be some) where the sellers/listing agents are not offering any form of compensation for the buyers' agent, the buyer will have options on "how" to pay for their representation. It can be negotiated in the contract for purchase (basically asking the seller to "pay"), or the price can be bumped up just a bit to include it. As it must now be made clear to sellers that they do not NEED to offer compensation, one of my largest concerns is that there will be occasions where first time and/or inexperienced buyers will feel like they cannot afford buyers' representation, when in most cases, they can't afford not to. By going directly to the listing agent, they'll be working with the agent who represents the seller, and they'll have no one on their side. (And trust me, that is seldom good for the buyer, even with a very ethical agent.)  Another expectation/concern I have as we navigate through these changes is that while the headlines make it seem as though there will be a big reduction in the price of houses, name me another circumstance where the cost of "goods" goes down and the price of the item to the consumer drops. In other words, I have every expectation that if the neighbor sold their home for $400,000 while paying commissions to both their listing agent and a buyers' agent, the "new" seller is not going to sell their home for less because they're not paying the buyers' agent compensation. They're going to want to list at the same price their neighbor did.  I could go on. But in short, there will be lots to navigate over the next year or so. Please feel free to let me know if you have any questions. The headlines are confusing, so if you're stumped on what's going on, reach out. I'm happy to answer anything you might think of. Onward!      

So we've talked a lot about whether it's a buyer's or seller's market and obviously all the data shows, and anecdotally, I can attest to the fact that it is still very much a seller's market here in central Virginia, in the metro Richmond area. But why? Why are we still in a seller's market? What is going on? And is it going to change? So a lot of buyers are out there thinking, I'm gonna wait, I'm gonna sit it out until it turns back into a buyers market. And I wouldn't really recommend that and there are a couple of reasons why. And they go back to the reasons why we are still in a seller's market. So one of the reasons why we are still in a seller's market, and we have not actually been in a buyer's market since 2013, or so, is throwing back to the mortgage crisis of '06 or '07, '08. When mortgages were crazy, everything kind of went kablooey. After lenders were giving people mortgages that probably shouldn't have gotten mortgages, and people didn't really have any skin in the game, so to speak. I think the lowest amount I had a buyer, during that time period, bring to closing was about $100. I think there were some people who brought $0 to closing and that just doesn't really give you a great incentive to pay things off. You don't have anything to lose if you walk away and just can't pay your mortgage. A lot of things changed after that period and put us in a position where a lot of builders went belly up. A lot of things just shifted in the whole industry. Buyers were sidelined. It was harder to get a mortgage. There were a whole lot of reasons, but one big piece of fallout that came from that was people stopped building. We just didn't have the construction that we had had up to that point and we just haven't caught up. So there are literally not as many housing units as the market needs nationwide. Everywhere you go. Almost anywhere, there are not enough units of housing. So that means rental homes, apartments, condos, townhomes, single-family homes, all that stuff. I have also seen during the course of my career that things have gotten a little different from the perspective of buyers. I think 15 or 20 years ago, buyers were more likely to come in and buy a fixer upper. I say all the time that with Pinterest, Instagram, HGTV, and all of these things showing great transformations, my natural thought would be that people would be more open to a fixer-upper and they would see the potential more because they've seen it on TV or Instagram or whatever. And it's almost the opposite. So it's a little counterintuitive to me that with the popularity of those things that buyers tend to walk in and see just a couple of things that might just be cosmetic, or just beyond cosmetic and they will walk out of a home. So the deals to be had in this market generally are the real fixer-uppers because a lot of people are just completely, no thank you, on those. They won't even go or they walk in and turn around and walk out. So there are a few reasons why we are still in a seller's market, but there are always deals to be had. If you're thinking of buying, there are always opportunities out there. So don't sit on the sidelines because you may be sitting for a long time. But if you have any questions about buying or thinking about a game plan to get you into a home and you think it's maybe unattainable, I'd love to talk to you because I bet you can actually make it happen.

It's January, and everybody's making their list of things that they want to accomplish in 2024 and I'm right there with you. But if one of the things that you want to do this year or hope to do this year is buy a home, one of the questions that you probably have is 2024 gonna be better to buy than 2023 was, because it was not that easy last year to buy a house, especially if it was your first home. So here are my predictions for what 2024 is going to look like if you are a homebuyer. We've already seen interest rates drop and that is fantastic because last year they inched up and inched up and inched up to a point where for a lot of people, it was just too expensive to buy a house. But we've already seen them come down and the Federal Reserve has already said that they're going to reduce rates a few times over the course of this year. So I think that we have some good predictions that rates are going to come down to a more attainable, not 3%, but a more attainable spot. So we are unlikely to see those 3%, sub 3%, rates anytime, possibly ever. So if you're waiting for rates to drop back to three, you're going to be waiting a really long time, most likely. And you probably don't want to do that if you're seriously thinking about buying. But as rates come down, it will be more attainable payment wise. But what I want you to keep in mind is if you've been waiting on the sidelines thinking maybe I'm gonna wait to buy a house, remember that right now we're in January, the market is tight with inventory, we still don't have a ton of homes out there and as rates go down, more buyers are going to be entering the market. So if you're thinking you'd like to buy this year, maybe you're thinking I want to buy in spring, you're thinking sometime this year I want to buy I'm going to wait until spring when more homes are on the market. Start looking now because there is less competition out there now in January and February then there will be trust me in March, April, May. So if you're thinking and you're able to buy now with the rates as they are, get out there now, start identifying what you like, what you don't like, and figure out when you can actually move forward because this year is shaping up to definitely have lower rates than last year. Maybe a little bit more inventory though it might be the same and we are gonna see a lot of competition. So get your head in the game. Give me a call. Let's chat. I'll put you in touch with a lender and let's make a game plan to get you in a home in 2024.

One of the questions that I get asked all the time in every season, at a party by clients, whatever, "Are we in a buyers market or seller's market?". If you look at real estate news across the country that answer varies greatly from location to location, region to region, but here in central Virginia in the Richmond metro area, we are still in a seller's market. Now, what does that mean? That means that a balanced market is basically six months' worth of inventory. That means that if we had no more homes come on the market, that we would have six months to sell through all of the inventory that's currently on the market. So if a balanced market where it's not preferring or leaning towards buyers not leaning towards sellers, a balanced market is six months' worth of inventory. We are currently still, here in January of 2024, with less than two months of inventory. If we had no more homes come on the market with the buyers that are currently in the market, it would be at a zero within two months, like all of the houses would be sold. That's going to continue to a greater or lesser degree throughout 2024. We will still find ourselves in a seller's market. But with rates coming down, there are a lot more opportunities for buyers, especially first-time buyers or buyers who are very dependent on those rates. So if you're thinking about buying a home, reach out, I'd love to talk to you, and help you navigate that process, whether it's your first home or your tenth. And if you're thinking of selling, yes, it is still a great time to sell and I'd love to talk to you about the best strategy to get your home on the market before the spring when there is still pretty little competition right now. So give me a call, send me a message, and let's set up a time to chat.

The metro Richmond area real estate market in 2023 demonstrated both resilience and competitiveness, making it one of the most active markets in the state. As we step into 2024, most trends and predictions suggest a dynamic year ahead. Market Overview and Trends in 2023: Throughout 2023, our market was a ALL about the sellers. With high demand and competitive bidding holding steady all year, it was a tough one for buyers, particularly as interest rates ticked up to nearly 8%. A significant portion of sales, (about 55.4%) closed at prices above the listing price, indicating a highly competitive environment​​. The average sale price of homes in Richmond maintained an upward trend as well,  fueled by the influx of young professionals and steady population growth in the area. One of the more difficult hurdles buyers faced was the inventory shortage- while already tight, it was made worse by sellers not moving because going from a 3% (or sub 3%, in many cases) rate to one that's 7 or 8 was just too unappealing. Housing Affordability and Demand: The concern for affordability continued to grow in 2023 due to rising interest rates and low housing inventory. This situation made homeownership more challenging for many potential buyers. Despite these challenges, Richmond's real estate market continued to thrive, with the rental market showing particularly strong growth. Rent prices increased by 22% over the past two years, in fact. The Richmond area is one where generally, it is still less expensive to buy than rent, though, which makes it good for both buyers of primary residences and those buying investment property. 2024 Predictions: Looking forward to 2024, the Richmond Metropolitan Statistical Area (MSA) forecasts a stable outlook,  While some predictions show a slight dip in housing market performance by the end of the year, headed into a major election that seems nearly impossible to predict.  The Virginia housing market as a whole is expected to see an 11.4% increase in home sales compared to the past year, suggesting a rebound from 2023's relative decline. Home prices are also projected to rise modestly, by about 1.2%​​​​. Real Estate Investment in Richmond: Richmond continues to be an attractive option for real estate investors, particularly those interested in the rental market, due to the large student population. The city's status as the state capital and a hub for commerce and education enhances its appeal for investment. The market is expected to yield good returns in the long term, with home prices showing a year-over-year upward trend​​. The Richmond real estate market in 2024 is poised for a year of adaptation and change. While challenges like low inventory and affordability constraints still exist, the market is expected to remain competitive and moving throughout the year. As we head into a spring market with lower mortgage rates, more buyers will surely be out home shopping. It is a great time to think about selling if you've been on the fence (and easier, as a result, to find something to purchase after your sale). If you're thinking of purchasing in 2024, this is the time to start building a game plan and getting your pre approval. As rates dip lower, competition for the homes available will absolutely increase. Make sure you're ready when you find "the one."  For investors and homebuyers alike, understanding these dynamics and staying informed will be crucial for navigating this evolving market. Richmond's steady population growth, thriving job market, and diverse real estate options make it a unique opportunity in the rental and overall housing market, through 2024. Curious about the value of your home, or what you can purchase? Reach out to me today and let's discuss!

As 2023 draws to a close, the Metro Richmond real estate market presents an intriguing landscape for homebuyers, sellers, and investors alike. This comprehensive analysis delves into the current state and future outlook of the Richmond market, offering what I hope are some valuable insights for those navigating this dynamic environment. Current State of the Richmond Real Estate Market Richmond, known for its affordable housing market, vibrant culture, and rich history, is part of a larger metropolitan area encompassing Chesterfield, Hanover, Henrico, and Richmond City, home to nearly one and a half million people. In 2023, the market exhibited several key trends: New Listings and Sales: There was an 8.3% decrease in new listings compared to 2022, with a 27.8% drop in closed sales, reflecting a challenging environment for finalizing transactions​​. Median and Average Sales Prices: The median sales price in Richmond saw a 6.9% increase, reaching $405,000, while the average sales price rose by 8.5% to $472,515​​. Market Performance Metrics: Properties were moving quickly, with median days to pending at just 6 days. About 66.6% of sales were transacted over the list price, suggesting a competitive market​​. Anecdotally, I can definitely speak to this, as nearly no transaction with which I've been involved has had only one offer. Predictions for 2024 Looking ahead to 2024, several predictions and trends are shaping the Richmond real estate market: Economic Growth and Mortgage Rates: A backdrop of modest economic growth and slightly higher unemployment is expected. Mortgage rates are anticipated to begin a slow retreat, improving housing affordability but potentially increasing demand as more buyers get into the market after having been waiting out the higher rates. Home Prices and Sales: A slight dip in the growth of home prices is expected, with a continued trend of stable but low home sales levels​​. Don't misconstrue this- it doesn't mean prices are dropping, just that prices may not continue at the same level of growth over the next year. (I definitely predict they'll still increase, though.) Housing Inventory: The number of existing homes for sale is expected to remain low due to insufficient building in past years. Mortgage rates are expected to exceed 6.5% for the year, maintaining the gap between market mortgage rates and rates on existing mortgages​​. (It's harder to sell when you know you're giving up 3% and going to 6%, so fewer homes are likely to hit the market.) Rental Market: The rental market is expected to see a mild decline in median asking rent, with a robust supply of new multi-family homes tempering rent growth​​. Opportunities for Buyers and Sellers: First-time homebuyers may find some relief as the market becomes slightly more buyer-friendly in some respects. Home sellers, on the other hand, might face increased competition from new construction homes​​. Richmond Specific Forecast: For the Richmond area, a 3.3% growth in home prices is predicted for 2024, despite a projected 11.6% decrease in sales​​. The Richmond real estate market as 2023 closes shows resilience and potential for growth, offering a dynamic landscape for both buyers and sellers. While sellers remain in a strong position due to high demand and quick sales, buyers should still be prepared for competitive conditions, especially for well-prepared homes. However, with the expected easing of mortgage rates and a slight adjustment in home prices in 2024, the market may offer more balanced opportunities for both buyers and sellers. So if you're thinking of buying, let's meet and create a strategy to get you where you want to go. If you're thinking of selling, the market is still yours- I'd love to help you figure out how to maximize the value of your home, and get it sold to give you the most in your bottom line.

Well, you've heard the saying "no news is good news," but really, there's not a whole lot of news, and depending on your perspective, of course, not much is that good. What a bummer that sounds like. I know, I know. But let's unpack it a bit. Despite interest rates sneaking perilously close to 8%, which is a 23 year high, it is STILL a seller's market. While the rates have certainly sidelined some potential buyers, the fact remains that we are still in a nationwide, regional, and local housing shortage. Basic laws of supply and demand are in play in the market, with more buyers than sellers, causing prices to continue to rise even with the increase in rates that would normally slow the price increases. (As it is, prices have increased 4% year over year) The hardest hit buyers in the market are obviously those first time buyers and/or buyers in lower price ranges. There are simply not many homes in the $150,000-$250,000 range to be had right now. In fact, I had a client write an offer (not a bad offer, either) on a home that was listed at $150,000 last week, and the listing agent let me know that they had 63 offers. SIXTY THREE. I knew they'd have a lot, but I was gobsmacked by that number. One reason for the shortage, as I know I've mentioned before, is the fact that nearly 85% of homeowners have rates below 5%, and unless they really need to sell, it's not terribly tempting for them to sell and move into a higher rate mortgage. Now, if you have owned your home a while, have great equity and no mortgage, it's still an absolutely terrific time to sell. While we are still seeing lots of multiple offer situations, we're also seeing homes that need a bit of work or that don't show well, sit on the market a bit longer than they would have even a few months ago. So while it is a good time to sell, I cannot overstate that having a great agent who will help you prep your home to sell, market it well, and commit to following up, is worth its weight in gold. Putting in that extra work will not only get you more money, but actually get your home sold in a reasonable amount of time. In this market, the "half baked" listings, or those priced too aggressively, are the ones that are sitting for longer, getting lower offers with less favorable terms, and having to make price reductions to get it sold. I hear your, "But what if I'm a buyer? Should I just give up?" No! But, if you're buying, I definitely have some tips- Broaden your parameters. Yes, sometimes you need to reduce your expectations. Maybe that chef's kitchen isn't in the cards right now, but you can find a home in your "perfect" neighborhood, with less "done" and more potential. Check into loan programs and grants that may offer you downpayment and closing cost assistance. They're out there! If you're stuck on that higher budget home, look into things like rate buy downs that will lower your rate for the first 3, 2, or 1 years. Run all your numbers, though, and please don't jump into the situation that works now but can be a nightmare later! Remember that especially if it's your first home, it doesn't have to be your "forever" home! Getting your foot (or toe!) in the door of the market is still a lot easier than waiting, when prices will definitely be higher (and rates may be the same or higher). It's much better to buy less house and keep your lifestyle than overcommit and end up house poor. Building equity (for most people, at least) is still better than paying rent! How can I help you meet your real estate goals to get you where you want to be? I'd love to answer any questions you might have about buying or selling, and help give you the tools you need to get there. Let's talk!  

In terms of the real estate market, this summer was definitely a bit different than the last two, in large part because the interest rates went up by 2x since last year, and that's had quite an impact (to no one's surprise) on the market as a whole. Where will it be this fall? Here's a little breakdown of where we are as we head into the fall market. As always, if you (or anyone you know) are thinking of buying or selling, or you simply have questions, please don't hesitate to reach out. I'd love to help! While the average sales price of a home in the area has dropped a bit from its high of $399,990 (June '23) to $390,000, it's by no means a large drop and tracks pretty well with seasonal trends. August always dips a little in numbers simply because the heat, vacations, back to school, etc., generally cause the market to take a bit of a breath before "back to business" in the fall. That average sales price number is up from $380,000 this time last year, so if the national media has told you things are cooling in some areas, we are not one of them that is. One bright spot in the housing affordability stress is that while our prices have gone up, they do not (generally speaking) appreciate the insane rates that some parts of the country has, and that's definitely welcome if you're buying.   We're definitely still feeling the inventory shortage, with closed sales for August totaling 1140, vs last year's 1507. We still do not have enough homes to sell, despite the interest rate increases sidelining some of the people who would have liked to buy. As a result of this inventory crunch, we're still seeing homes sell for 102.3% of the list price, generally due to multiple offer situations. This is down only ever so slightly from last August when it was 102.5%. Sort of crazy when you do consider the 100% increase in rates since then. In fact, neither the days on the market until a home sells nor the number of showings until a contract has been received, has changed at all since last year. So when will this get better? It's going to get better, right?? The good news is yes, it will. The bad news? We're not sure when, or how much. Given that we were already in an inventory shortage prior to the rate increases, that's gotten considerably worse. According to Redfin data, 66% of homeowners in Virginia have rates below 4% (and 28% have rates under 3%). That means that for many of them, they'd nearly double their rate by selling and buying another home. There are always reasons that will make people need or want to do this, but the casual "I'd just like a new home," sellers/buyers are in most cases sitting this market out. If you're thinking of buying, you may be tempted to wait until rates drop, and I totally understand. Just don't think that prices will drop at the same time. With the inventory shortage likely to continue into the foreseeable future (most experts say that nationwide it may take a decade for our housing shortage to catch up), prices are likely to continue to go up. If rates drop a good bit, the prices are likely to go up even more. (That's just Econ 101- low supply will push demand higher). According to many experts (those experts again!), including Fannie Mae, rates are likely to drop to around 6% or so in 2024, but probably not until the second quarter. They're very unlikely to drop this year, though, so the market this fall is going to be... well, interesting. Historically, rates hover around 5-6% and that's certainly likely again, but please please please don't continue paying rent, and waiting for those 3% rates again. They will most likely never return. If you have questions about any aspect of the real estate market, I'm happy to help. Just drop a comment, send me a message, or give me a call!   *All numbers and stats here are from info found in the Central Virginia Regional MLS, and based on numbers for the Richmond Metro area.