This week’s Q&A column is written by David Howell, Executive Vice President and Chief Information Officer, of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant market news, contact David at 703-855-5089 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: How did the real estate market finish the summer?

Answer: Every month on our website we profile the most important market indicators for Northern Virginia — contract activity, interest rates, inventory, affordability, and the direction of the market — in an easy to read and digest summary followed by supporting charts and data. In October, we will breakout data in more detail for the third quarter for the City of Alexandria and South Alexandria. In the meantime, we are presenting our latest Market-in-a-Minute summary for Northern Virginia. Read the full StatPak report here.

Contracts

Throughout Northern Virginia, contract activity in August 2023 was down 17.3% from August 2022 and was down for five price categories. Through the first eight months of the year, contract activity is down 22.6%. The average number of days on the market for homes receiving contracts was 21 days in August 2022, down significantly from 35 days last August.

Urgency Index

The Urgency Index, simply the percentage of homes going under contract that were on the market 30 days or less, was up in August compared to last August. During the past 19 years, the Index has been as high as 94.4% (April 2004) and as low as 22.9% (November 2006). In August 2023, the Urgency Index was 80.8%, up from 66.5% in August 2022.

Inventory

The number of homes on the market at the end of August (1,271) was down 40.4% compared to the end of August 2022 and was down for five out of six price categories. The number of new listings coming on the market decreased 11.5% compared to August 2022. The decrease in contract activity was offset by a bigger decrease in inventory, lowering overall supply to 1.0 month from 1.4 months the end of August 2022. To provide some context, during the “Great Recession” in August 2007, supply was 7 months, the average days on market was 84, and there were 9,000 homes on the market.

Interest Rates

30-year fixed mortgage interest rates at the end of August stood at 7.18% up from 6.9 months sat the end of July. The good news is that rates have come down a bit over the last couple of weeks, but the tough news is that they are still near a 22-year high.

Affordability

The payment on a no-money-down, 30-year fixed mortgage for a median-priced home is 99% higher than it was a decade ago in August 2013, and the median price is up 49%. The payment is also 30% higher than last August because of higher interest rates and higher prices. The mortgage payment for a median priced home ($4,742) was much higher in August than the median rented price ($3,000).

Direction Of The Market

Despite a significant contraction in buyer activity, it is still a seller’s market in Northern Virginia. Most of the key indicators remain positive for sellers — absorption rates, the average home price, and the urgency index are higher than this time last year, and perhaps most importantly, the supply of homes is lower. For all the reasons it’s a good time to be a seller, it’s tough on buyers who are dealing with a one-two-three punch of higher prices, higher mortgage interest rates, and very few choices of homes on the market.

Yet we sound a cautionary note for sellers. Buyers are still seeking value among the scarce inventory, and we have seen sellers fall into two broad categories: the “haves” and the “have nots.” The “haves” are those sellers who have priced their homes correctly, and they are reaping the rewards. 70% of the homes that settled in August sold at or above their original list price (almost 4% above) and sold quickly. And there are two distinct categories of “have not” sellers. The first are those who came on the market at a price that was too high, but nonetheless persevered and ultimately sold. They paid a big price in time and money. They typically took four times as long to sell, and at an average of more than 6% under list price.

The other category of “have not” sellers is those whose homes are still on the market unsold. There are over 1,300 homes on the market in Northern Virginia, and they have been on for an average of 60 days. Price matters a lot.

Note: Data derived from BrightMLS and is deemed reliable, but not guaranteed. “Northern Virginia” is defined as Arlington and Fairfax counties and the cities of Alexandria, Falls Church and Fairfax.

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria

This week’s Q&A column is sponsored and written by Hope Peele of The Peele Group and McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact The Peele Group at 703-244-6115 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

There’s a saying I’ve heard said to travelers “go everywhere, talk to everyone, eat everything”. While this might not be as intuitive for your home town, in my opinion, it’s not always good advice.

Eat where the locals eat!

Worst case, you’ll get some good food. Even if the food isn’t great, there’s got to be a reason that the locals love it! Maybe the staff is the friendliest in town. Maybe there’s always a good conversation at the bar. Maybe it’s just the perfect spot to get cozy and read a book. Regardless, be sure to go in with an open mind and see what the locals see. There’s bound to be something you’ll enjoy at the local watering hole.

My younger sister has a local spot that she goes to once a week, and gets the salmon and an iced tea. She rarely drinks, but has established a nice little community at our local watering hole — and if she ever looked up from her book, she’d find some nice conversations as well!

Join the local Buy Nothing group! 

It’s not quite as widely known as NextDoor, but have you heard of Buy Nothing?! If not, you’re truly missing out. This is a super localized group that takes the spirit of asking a neighbor for a cup of sugar, and scales it up. Each group is theoretically small enough for you to walk to any spot in your group. The guidelines are simple — give freely, receive freely, and share freely. To quote the BN website “all gifts have the same value in Buy Nothing: Priceless”. (Check it out at www.BuyNothingProject.org)

I love that I can give up a favorite pair of heels, and know for certain that they will be worn to a fabulous gala and live the life that they deserve but I could never give them. I’ve discovered a kindred spirit just down the block, by gifting an obscure Halloween costume accessory. And it’s really cool to discover a Buy Nothing friend out in “the wild”.

Not only is it a great source of “stuff”, it’s also a fun, SUPER local message board to find out neighborhood info. Alexandria even has a “Spin-Off Spin-Off” (aka “the Wild West”) with looser guidelines than the typical BN group. Join it all!

There are definitely some people in my neighborhood who I’ve never met, but we are very familiar with each other on Buy Nothing! (And for a laugh, be sure to follow “The Best of Buy Nothing” on Instagram!)

Volunteer at Local Events 

Of course, a lot of us have non-profits that we support and regular volunteers are crucially needed all year round!

However, a lot of neighborhoods have local, annual events that support various causes. For example, Del Ray has a Turkey Trot, as well as a number of Bar Crawls throughout the year. Volunteering for just a few hours at these events will not only give you perks (like a free bar crawl ticket!) but also introduce you to other locals who love to help the community. I know from personal experience, it can be tons of fun to give the gift of your time!

Whatever your personal interests and hobbies, there are tons of ways to meet people and grow a community in your new neighborhood. And as your local real estate expert, living and working in Alexandria all of my life, I know most of the local hot spots and fun upcoming events. If you ever want advice, I’m happy to point you in the right direction!

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria

This week’s Q&A column, sponsored and written by McEnearney Associates Realtors®, the leading real estate firm in Alexandria, is a bit of a departure from our usual format. To learn more about this article and relevant Alexandria market news, contact us at 703-549-9292. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: A reader recently asked us a question about the resale value for homes with solar panels. Did it help, hurt or have no impact at all?

Answer: We know solar panels are increasingly being added to properties to cut down on energy costs and reduce emissions from other heating sources, but does that translate into value for homeowners?

It wasn’t as easy a question to answer as we thought.

When we last addressed the topic of solar panels on our blog in 2020, it was a topic garnering a lot of discussion but not a lot of clarity about what impact it had in the housing market. And while there has been plenty of homeowner education about other popular green tech in properties — such as energy-efficient appliances, sustainable construction material, improved insulation — the insight on solar panels remains clouded as to what that means in actual dollars for home value.

Each year the National Association of Realtors® (NAR) releases a report on sustainability issues facing the real estate industry. The 2023 REALTORS® and Sustainability Report – Residential was released in May and showed that a majority (63%) of agents and brokers said promoting green technology in listings is “very” or “somewhat” important.

When it comes specifically to solar’s value to a home, 34% (a 2-point drop from 2022) said properties with solar panels increased the perceived property value, compared to 17% who said it decreased value and 29% that said they had no effect (19% said they didn’t know the impact on value).

Also, 38% of agents and brokers said that days on market were neither longer nor shorter for properties with solar panels and 37% believed the difference in time on the market due to the solar panels was unclear.

The green home features that Realtors® believed were most important to clients include windows, doors and siding (39%); proximity to frequently visited places (37%); a comfortable living space (37%); and a home’s utility bills and operating costs (25%). Solar panels don’t make the cut of top features cited.

However, of the top five (out of 12) sustainability issues facing their markets, four were questions about solar panels with most agents and brokers citing the need to understand how solar panels impact a transaction (35%), understanding lending options for energy upgrades or solar installations (33%) valuation of solar panels on homes (32%) and the lack of MLS data about home performance and/or solar installations (25%).

In short, there are still a lot of questions about how solar panels are impacting home values and for a feature that can cost anywhere from $16,000-$23,000 to install. So, we asked some of our McEnearney Associates to tell us about their experience with solar panels in the Virginia, Maryland and DC markets.

Christine Robinson works in Virginia and said consumer education will go a long way to having homeowners experiment with solar technology. When her clients finally found a home that fit their needs, it came with solar panels and also with a lien against the property for the solar panels. The buyers didn’t want to assume the loan for the panels so the sellers had to pay it off before closing. And the listing agent wasn’t knowledgeable about how the solar panels worked so it was up to the buyers to educate themselves about the pros & cons.

Several years ago, even Robinson’s client who is a LEED professional with a background in green technology found it difficult to get clarity on how to get solar installed with new construction, and even harder to get information about solar installations in existing homes.

“I feel strongly that consumers want this type of product but it’s more involved than just dropping panels onto the home,” Robinson adds, running through a list of considerations to keep in mind.

“What upgrades may I have to consider for my home installation? What are the rules in my state? How will it affect my insurance? What safety precautions regarding energy storage, battery back-up, fire suppression, and local utilities do I have to consider?”

Sometimes there are issues with solar panels that have nothing to do with energy supply. Jillian Keck Hogan works in all three jurisdictions and said most owners are indifferent as to whether the panels added value to their home, they installed them for personal reasons. However, the results aren’t always positive.

“We just listed a house for sale/rent in D.C. that had solar panels and during the listing process we discovered that the installation had caused damage to the roof and led to water damage during rain storms,” Hogan shared. “The company was good at coming out for repairs but it still doesn’t feel like it was contributing to the home in a positive way besides the advantage of a low electric bill and a potential positive environmental impact.”

And for some buyers, it’s simply a no-go. Bob Shaffer, an agent who works in D.C. and Maryland, has had buyer clients who were definitely “turned off” by solar panels (no pun intended!) “My clients do not take a liking to solar panels and avoid homes with them, even if there were other elements in a home that they liked,” he said.

Some other tips from agents:

• Pay for the upgrades on solar panel roof installation. Just like any home improvement project, there are upsells that will add extra costs but are worth it in the long run. For example, spring for the barriers that will prevent animals from nesting under or damaging solar connections.
• Be sure to check for tax incentives regarding solar or green technology, including those in your local jurisdiction
• Check out this recent segment on WAMU’s 1A radio program that discussed the Inflation Reduction Act and solar energy incentives.

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria

This week’s Q&A column is written by David Howell, Executive Vice President and Chief Information Officer, of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant market news, contact David at 703-855-5089 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: Where can I find reliable information on local real estate market activity?

Answer: Every month on our website we profile the most important market indicators — contract activity, interest rates, inventory, affordability, and the direction of the market — in an easy to read and digest summary followed by supporting charts and data. Then each quarter we take a look at submarkets in Northern Virginia and last month in this column we shared information on contract activity for the first half of the year in the City of Alexandria and South Alexandria.

This week, we are presenting our latest Market-in-a-Minute summary for Northern Virginia. Read the full StatPak report here.

Contracts

Contract activity in July 2023 was down 10.4% from July 2022 and was down for four price categories. Through the first seven months of the year, contract activity is down 23.2%. The average number of days on the market for homes receiving contracts was 21 days in July 2022, down slightly from 22 days last July.

Urgency Index

The Urgency Index, simply the percentage of homes going under contract that were on the market 30 days or less, was up in July compared to last July. During the past 19 years, the Index has been as high as 94.4% (April 2004) and as low as 22.9% (November 2006). In July 2023, the Urgency Index was 83.7%, up from 76.3% in July 2022.

Inventory

The number of homes on the market at the end of July (1,340) was down 46.1% compared to the end of July 2022 and was down for five out of six price categories. The number of new listings coming on the market decreased 26.7% compared to July 2022. The decrease in contract activity was offset by a bigger decrease in inventory, lowering overall supply to 0.9 months from 1.5 months the end of July 2022. To provide some context, during the “Great Recession” in July 2008, supply was 4.2 months, the average days on market was 85, and there were 8,600 homes on the market.

Interest Rates

30-year fixed mortgage interest rates at the end of July stood at 6.90%. Rates have remained frustratingly high this summer, but the Mortgage Bankers Association is forecasting rates to dip below 6% by the end of the year, and below 5% by the end of 2024. We hope they’re right.

Affordability

The payment on a no-money-down, 30-year fixed mortgage for a median-priced home is 85% higher than it was a decade ago in July 2013, and the median price is up 41%. The payment is also 26% higher than last July because of higher interest rates and higher prices. The mortgage payment for a median priced home ($4,544) was much higher in July than the median rented price ($2,950).

Direction Of The Market

In July 2021 there were 2,300 new contracts and 30-year mortgage interest rates were 2.8%; last July there were roughly 1,700 contracts and rates were 5.3%. Just last month there were only 1,500 contracts and mortgage rates were almost 7%. The Northern Virginia real estate market has seen a steady decline in contract activity over the last two years as interest rates have risen, yet it is a tighter sellers’ market now than during those heady days with sub-3% mortgage rates. And it’s simply because the number of homes on the market has contracted even more than buyer activity.

There were almost 3,000 homes for sale at the end of July 2021, and that has dropped to a little over 1,300 now. With overall supply at less than a month, and the supply of homes priced less than $750,000 at just over two weeks, buyers just don’t have a lot of choices. That is keeping modest upward pressure on home prices and presents an incredible opportunity for homeowners who are in a position to sell.

As we have noted before, we expect this deficit of listings to continue until mortgage rates drop below 5.5% — or perhaps even lower.

Note: Data derived from BrightMLS and is deemed reliable, but not guaranteed. “Northern Virginia” is defined as Arlington and Fairfax counties and the cities of Alexandria, Falls Church and Fairfax.

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria

This week’s Q&A column is sponsored and written by Hope Peele of The Peele Group and McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact The Peele Group at 703-244-6115 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: Are real estate appraisals always accurate?

Answer: The short answer is, no. Not always. However, it’s complicated! Here are some important considerations for understanding appraisals, and how to assure the best appraisal outcome.

Real estate appraisals are an important part of the process for buying and selling homes when there is a mortgage lender involved in the transaction. The lender needs to assure the value, since they are often contributing 80% or more to the purchase price. An appraisal will be ordered by the lender, and they will send a licensed professional to evaluate the property. The appraiser will take note of all the important property characteristics. However, there are many nuances about a property that can affect value, and sometimes the individual doing the appraisal is not aware of them all.

First, the real estate market can change, year to year and even month to month. We’ve seen drastic changes during presidential election seasons, during Covid, during the seasons of the year, and even due to nearby construction or other short-term factors. This can lead to variations in accuracy.

Secondly, an appraiser needs to find recent comparable sales (comps) to determine value. If the market has changed, like after the recent increase in interest rates, sales may be down for a period of time. If it’s a small community, there may not have been any sales for many months. Things like this may affect the accuracy of an appraisal.

Next, the condition of the property will affect the appraisal. Has it just been updated top to bottom? Or does the subject property still have all original features from the 1980s? This can affect the appraised value. It can even matter if the home is staged beautifully versus having the appraiser visit when it’s empty and sad looking. Some appraisers will value the aesthetically pleasing property at a higher amount, while others can look past these factors.

This brings me to subjectivity! Appraisers are human, and sometimes different people will look at the level of upgrades, the condition, and curb appeal of the same property and come to drastically different assessed values.

We recently had a buyer’s appraisal that came in $40,000 low. This may seem like a good problem. You may think that the seller will just have to lower the price. However, if there’s an appraisal contingency, which there was in this case, then there’s a negotiation that needs to happen. In our recent case, the seller knew that sales for this sized condo over the past few years fully supported the sales price, and I agreed. They also had multiple offers, so there were other buyers waiting to step in. What did we do?  First, we provided facts for an appeal.

However, the appraiser would not budge on value. The lender agreed with us, so they ordered a new appraisal. This time the appraiser read through all the data that we provided and agreed with the sale price, which was a full $40,000 higher than an appraisal that was issued just two weeks prior.

So, what does one do to assure the best outcome for an appraisal?

1. Make sure the property is “show ready” for the appraiser, as if a potential buyer were visiting. If the home was “staged”, leave the staging until the appraiser has visited. The better the home looks, the higher the assessed value tends to be.
2. Prepare a list for the appraiser with all recent upgrades, ages of the HVAC, hot water heater, roof, appliances, and estimate the amount that’s been spent on everything in the last couple of years. This will help an appraiser find extra value in the home.
3. Ask your Realtor to provide a report on recent sales (comps) for the appraiser. This is typically something that a listing agent does, but so many buyers are waiving appraisal that when we represent the buyer, we send comps to the appraiser, as well. Appraisers have access to recent sales and will look for comps themselves, of course. However, sometimes they may miss a good comp, so it’s best to make sure that they have all of the sales that could be used to support the price.
4. Last, but not least, ALWAYS have someone meet the appraiser. There is no substitute for a face-to-face discussion of the features and improvements of the property, and the nuances of the home and neighborhood. This assures that the appraiser has all the important information in making an accurate appraisal assessment.

Real estate assessments are important to the lender, so that they are comfortable that the property is worth the sale price. They are also important as a buyer, to be sure that you are not overpaying for a home that you should be able to sell at or above the sale price in years to come. And appraisals are important to a seller, as they want the sale to happen at the agreed upon sale price, and don’t want to negotiate a new price if the value comes in low.

In theory, real estate appraisals are supposed to give an accurate assessment of a property’s value. However, they are definitely subjective and there is lots of room for interpretation. That’s why it is so important that your Realtor takes an active role in the process. By meeting the appraiser, providing recent comparable sales and lots of information on the property and neighborhood, you have a much better chance of a positive outcome on the appraisal.

Whether buying or selling, to have the best appraisal experience, you should have an expert working with you.

Hope Peele is a licensed real estate agent with McEnearney Associates, Inc. in Alexandria, Virginia. She grew up in Old Town and currently lives in Del Ray. As a partner with The Peele Group, Hope is dedicated to guiding her clients successfully through the many-faceted process of buying or selling a home. Contact Hope at 703-244-6115.

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria

This week’s Q&A column is written by Rebecca McCullough of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact Rebecca at 571-384-0941 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: How do finance contingencies work in a competitive market?

Answer: For the past several years we have been experiencing a seller’s market in residential real estate. Buyer demand exceeds the number of homes available for sale. There have been plenty of news articles over the past few months that appear to question that, but for a lot of buyers out there, that is what they are experiencing. Realistically, we can expect to experience a seller’s market for a long time coming.

In a seller’s market, buyers have to be aggressive to win against multiple offers, and this understandably can make many buyers very uncomfortable. So, what do I mean by aggressive? Largely that translates to removing contingencies and adding price escalations to contracts. There are two key contingencies that are often removed, and I will explain both.

The first contingency that might be removed is a home inspection. To be clear, an agent should never recommend waiving home inspection. However, the reality is that in a competitive situation, sellers do not want to see this contingency. A good practice would be to do a pre-inspection before an offer is written. That way, a buyer will be able to understand any potential issues before submitting an offer.

To learn more about home inspections please read my article from May 31, 2023 titled “What are home inspection deal breakers? And should they be?”.

The other major contingency is the “finance contingency.” This one can be tricky. There are a great many things to consider and to understand. I’d like to say that all agents are equally knowledgeable on the nuances of them, but truthfully, they are not. I’ve seen deals lost where the agents and the seller did not understand the financing, and sensational buyer offers are rejected.

Regular readers of Ask McEnearney are likely familiar with the three main types of mortgages: conventional, VA, and FHA. Put simply, VA mortgages are loans available to active and retired military. FHA loans are insured by the Federal Housing Administration and offer borrowers with limited resources or credit issues opportunities to purchase homes. Conventional loans are generally what everyone else will apply for. In each case, they can be offered by banks, credit unions and mortgage companies.

However, these are not the only types of lending opportunities. There are a few more that may not be as well known. First, it is possible the seller may offer financing. This means that the seller agrees to allow you to purchase the home and they will provide your financing and be your lender.

Another is a bridge loan, which is underwritten like a mortgage, but is short term and can be paid off when proceeds become available. This is a terrific option for those who can’t qualify for a new mortgage until they sell their current home. Not all financial companies offer this type of loan, but it can be worth researching companies that do to help you win an offer. One such company is Atlantic Coast Mortgage* (NMLS ID 643114). They’ve saved a few deals for McEnearney clients!

Another option is investor financing.

Let’s explore this last one. Why would someone go this route? There are many individuals who temporarily can’t get traditional financing, but don’t want to wait to buy. Here are some scenarios where investor financing might be employed:

1. Buyers want to purchase before they sell but need the equity from their current home for a down payment on the new home.
2. Buyers want to purchase before they sell but don’t qualify for the purchase without selling first.
3. Buyers with insufficient credit or whose scores don’t meet conventional/FHA guidelines.
4. Buyers are self-employed or commissioned, but don’t have the required history to meet conventional guidelines.
5. Buyers are temporarily unemployed, or working part-time and will be securing a full-time salaried job in the near future.
6. Buyers want to purchase a primary home but won’t be moving into the property within the requisite period of time, and don’t have the funds necessary to secure conventional second home or investment financing.
7. Investors or builders looking for funds to flip a home.
8. Buyers with debt-to-income ratios that exceed conventional guidelines, but are paying off debt, obtaining a new job, etc, in the near future which will allow them to qualify for a conventional refinance.
9. Buyers want to make the equivalent of an all-cash offer and settle in a matter of days in order to be more attractive/competitive.
10. Buyers looking for up to 100% financing.

Read More

This week’s Q&A column is written by David Howell, Executive Vice President and Chief Information Officer, of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant market news, contact David at 703-855-5089 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: How was the real estate market for the first half of 2023?

Answer: As we wrap up the first half of the year, the low inventory of available homes for sale continues to be a dominant factor in the local market. Despite the significant pullback in contract activity because of interest rates that edged near 7% by the end of June, home prices in Northern Virginia still rose in June and have risen year-to-date.

It is a great market for motivated sellers, but a challenging one for buyers who are dealing with higher home prices and high interest rates. The imbalance won’t stay this way forever, but it’s going to take a drop in mortgage rates to unleash the pent-up demand from buyers and sellers alike.

This week we look at market activity for January-June of 2023 compared with the same time in 2022 for the City of Alexandria and South Alexandria (Fairfax County portions of Alexandria). The charts below show contract activity by price range and by property type (condos, attached homes, and detached homes) and the average days on market.

City of Alexandria

New Contract Activity

• Contract activity in the City of Alexandria decreased 27.2% in the 1st half of 2023 compared to the 1st half of 2022.
• Contract activity was down for all price categories.

Number of Condo, Attached Home, and Detached Home Contracts

• The number of detached homes, the smallest part of the Alexandria City market, going under contract in the 1st half of 2023 decreased 17.1% compared to 2021.
• Contract activity in the condo market decreased 27.7% and attached homes activity decreased 31.2%.

Average Number of Days on the Market — New Contracts

• Overall time on the market increased 20.3% to 24.9 days for the 1st half of 2023.
• The average number of days a home was on the market before receiving a contract decreased for one price category.

South Alexandria — Fairfax County Portions of Alexandria

New Contract Activity

• “South Alexandria” refers to those portions of Fairfax County with an Alexandria mailing address.
• Contract activity decreased 25.0% in the 1st half of 2023 compared to the 1st half of 2022.
• Contract activity was down for all price categories.

Number of Condo, Attached Home, and Detached Home Contracts

• Condo contract activity decreased 28.0% in the 1st half of 2023 compared to the 1st half of 2022.
• Attached home activity decreased 24.7%, and detached home activity decreased 23.5%.

Average Number of Days on the Market — New Contracts

• The average number of days a home was on the market before receiving a ratified contract increased for five price categories.
• Overall time on the market increased 135.9%(!) to 30.9 days for the 1st half of 2023.

Note: Data derived from BrightMLS and is deemed reliable, but not guaranteed.

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria

This week’s Q&A column is sponsored and written by Hope Peele of The Peele Group and McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact The Peele Group at 703-244-6115 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: Why wouldn’t the highest price offer win, in a competitive situation?

Answer: Although the local market has cooled somewhat since the height of 2020, it is still a fairly competitive market for buyers right now. One question that I’ve been asked a lot lately is, shouldn’t the highest price offer get the home? It seems so, but it’s not actually quite that simple.

First of all, it’s important to remember that sometimes offers can be made with a somewhat flexible offer price. This comes in an escalation clause which is an addendum to the basic offer contract stating that the purchase price will go higher in the case of a competing offer. This document includes both an increment by which the buyer will increase their bid over the competition and a top end, which is the absolute max the buyer is willing to pay.

For example, the image below shows a part of the Virginia escalation clause that is basically stating this buyer will beat any other offer by $1,000, up to $550,000.

The number one reason that an offer would not be accepted, regardless of price, is too many contingencies. A contingency is basically an “exit” for the buyer, and naturally the seller wants as few of those as possible. The seller’s main goal is to sell their home. Point blank. Of course, the highest price is a very close second, but if the contract doesn’t get to settlement, then the price is irrelevant. So, the seller will weigh the price against any contingencies, such as a home inspection, an appraisal, and more.

A home inspection contingency is one of the shortest contingencies. It usually expires a few days after the contract is accepted. During these first few days, the buyer has the opportunity to have a licensed inspector look at the home and write up a report of defects, etc. They can then void the contract for any reason. This also allows the buyer to void the contract, even if they just don’t like something very minor, which can be a big risk for the seller. A great option for buyers, if the seller will allow, is to conduct a pre-offer inspection and then waive the home inspection contingency when they make the offer.

Another important contingency to be familiar with is the appraisal contingency. When a buyer is taking out a loan for a mortgage, the lender wants to ensure that the loan can be repaid in the case of a foreclosure. So, they send an appraiser to evaluate the home and determine their own value. If the value the appraiser finds is the same or higher than the contract price, there are no issues, and the deal continues smoothly.

However, if they find the value to be below the contract price, this means that the buyer’s loan is not going to be as much as they wanted originally, and they have to put more cash in to meet the offer price. In this case, if there is an appraisal contingency in place, there may be another negotiation between both parties to either lower the offer price or negotiate somewhere in the middle. If the appraisal contingency was waived, the buyer is basically agreeing to make up the difference, regardless of what the appraised value is.

Sometimes the buyer will make the offer with an appraisal contingency but promise in the contract to make up any gap up to a certain amount. For instance, if the offer price was $800K, the buyer could say they would cover up to $20K on a low appraisal.

All of this is kind of a long way to say, an offer with an appraisal contingency is much riskier to a seller than one without. Here’s another example: Let’s say a home is listed for $500,000. Offer A is for $550,000 without an appraisal contingency, and Offer B is for $575,000 with an appraisal contingency. Of course, $75k over list price seems like an obvious choice for the seller. However, if the appraised value ends up coming in at $530k, Offer A would still close at $550k. Offer B might drop all the way to $530k if the buyer doesn’t have enough cash to make up the difference. Or even worse, the deal might fall through.

With so many contingencies and options in the Virginia sales contract, it is so important to have a Realtor you trust, who will explain these terms and contingencies to you so that you understand clearly. Whether buying or selling a home, it is important to have the right Realtor by your side to help you navigate the process and to understand these concepts well before you need to make these decisions.

For a complimentary consultation and overview of the buying and selling process, don’t hesitate to reach out!

Hope Peele is a licensed real estate agent with McEnearney Associates, Inc. in Alexandria, Virginia. She grew up in Old Town and currently lives in Del Ray. As a partner with The Peele Group, Hope is dedicated to guiding her clients successfully through the many-faceted process of buying or selling a home. Contact Hope at 703-244-6115.

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria

This week’s column, sponsored and written by McEnearney Associates Realtors®, the leading real estate firm in Alexandria, is a bit of a departure from our usual format. To learn more about this article and relevant Alexandria market news, contact us at 703-549-9292. You may also submit your questions to McEnearney Associates via email for response in future columns.

Two of the most respected names in local real estate — McEnearney Associates and Middleburg Real Estate/Atoka Properties — have combined our exceptional talent and resources into one powerhouse firm. This strategic union marks a significant milestone poised to affirm our long-standing traditions of excellence and transform the future of independent real estate.

“Our firm is built on a foundation of trust, which starts with finding the absolute best agents in the business who have the highest standard of integrity and fiduciary responsibility for our clients,” said President Maureen McEnearney Dunn, who will continue to lead the new firm along with McEnearney Principals Dave Hawkins and David Howell, who are now joined by new Principals Peter Pejacsevich and Scott Buzzelli.

“It was a natural fit,” said McEnearney Dunn, “Middleburg Real Estate/Atoka Properties is a firm focused not on quantity, but quality; aiming not to be the biggest, but The Best, and that’s what we look for when partnering with others: common goals for growth and always doing the right thing for our agents and clients.”

For more than 40 years, McEnearney Associates’ corporate mission has been, foremost, to provide unrivaled support to its agents and clients while strategically expanding its footprint in Virginia, Maryland, and Washington, D.C. Atoka Properties was formed in 2008 by partners Pejacsevich and Buzzelli, who were drawn to Middleburg for its strong heritage and history. Since its inception, their brokerage has continued to grow into the premiere real estate brokerage in Hunt Country and beyond.

The combined forces of McEnearney Associates and Middleburg Real Estate/Atoka Properties unlocks myriad benefits with an expanded network of talented and exceptional agents, an increased portfolio of listings, a luxury presence, curated marketing, advanced data analytics, and — most importantly — a seamless experience for homebuyers, sellers, property management and real estate professionals.

“We are and will continue to be the industry’s best,” said Pejacsevich on the future of the newly merged company. “We provide hands down the most support for our agents and clients and can do so because we are not tied to a franchise fee or national ownership.”

Adds Buzzelli, “We believe in investing in our team to help agents create a stellar experience for clients, and by combining our strengths we will deliver a new level of service and value to everyone.”

The merger was announced June 20 and will take about six months to complete, expanding the firm’s footprint to 16 offices throughout Virginia, West Virginia, Maryland, and Washington, D.C.

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria

This week’s Q&A column is written by Trudy McCullough, VP of Relocation & Client Services, and Britni Spurlock, Relocation Specialist, at McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article, contact Trudy at 703-639-7387 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: How can my local real estate agent help me move long distance?

Answer: Buying and selling a home can be exciting and stressful all at the same time. Locally, most people know at least one real estate agent; whether an agent they have used before or someone they are acquainted with. If not, recommendations from a friend, family member, or trusted advisor are a great place to start.

However, there may come a time when you have a real estate need outside of your local real estate market. When looking for an agent, you have to remember that anyone can build a beautiful website and hire a professional marketing team to support them, that doesn’t guarantee they are experienced or the best agent for your needs.

We want to ensure you receive the same professional service anywhere in the world that you receive from us. The three most common reasons clients reach out for recommendations outside our local area include: job relocation, family needs, and life-style changes.

Job Relocation

Many employers offer a variety of packages from full relocation to flat-fee services, while other employers are not equipped to provide relocation services. If Realtor recommendations are part of your relocation program or suggested by a co-worker, you should still do your research. Job relocations add an extra level of stress due to time constraints of the position start, selling your current home, relocating family, and more.

The right Realtor is experienced in your market but also “relocation best practices,” fully understanding the relocation processes, additional paperwork, and requirements of the employer so that you can take full advantage of all relocation benefits. When you are not offered relocation benefits by your employer, you must find the right agent on your own; not just an experienced one, but an agent with a true relocation background, because it will make all the difference in your move.

Family Needs

From growing families to downsizing, inherited homes to vacant land, relocation trained agents are equipped to assist with all types of family situations as they arise. For example, when parents are no longer able to age in place, relocation agent services can include: complimentary market analysis noting as-is and repaired/improved values; supplier introductions from repairs to improvements and cleaners to movers.

A relocation trained agent is a full-service Realtor who specializes in the area and type of transaction you are navigating, as well as proficiency in working with out-of-town clients.

Life-Style Changes

Often buyers are comparing multiple areas as a potential destination for retirement, investment property or even a second home. Relocation specialists offer more than housing information; they provide cost of living comparisons, area tours, local life-style information, and market trends to assist you in decision making.

How is McEnearney Associates able to help?

Knowing a Realtor who is part of a truly global network of vetted professionals is key. At McEnearney Associates, we are fortunate to be a member of Leading Real Estate Companies of the World® (LeadingRE). LeadingRE is home to the world’s market-leading independent residential brokerages in over 70 countries, with 550 firms and 138,000 sales associates making 190 client introductions daily. Our by-invitation-only network is based on the unparalleled performance and trusted relationships that result in exceptional client experiences.

When you need an agent recommendation, anywhere in the world, McEnearney Associates are happy to help. We are your Trusted Relocation Resource.

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria