Newsletter

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: Love It or List It?

Answer: Whether or not you’ve seen the TV show, the “LOVE IT OR LIST IT?” question is one familiar to many. Once upon a time, that question was somewhat straightforward, but now with many supply chain constraints and limited housing inventory, it’s more complicated. Let’s break down the two options.

LOVE IT

What if you love your house, your neighborhood, your commute, but have outgrown the space? Perhaps there aren’t enough bedrooms, you need more home office space, or the kitchen is smaller than you would like. If you “LOVE IT,” you might consider a renovation instead of a move. So, how to evaluate…?

Part of the decision will depend on liquidity. Let’s say you have equity in your house, but no cash on hand. With interest rates low, refinancing could be a great way to access funds for the remodel. You can leverage your equity and renovate your home so that you can live in it for next 30 years. If you can afford the increased mortgage payments, this is a viable option to consider.

To do it right, I highly recommend hiring an architect. Depending on how expensive a renovation you’re considering, an architect’s fees could run $10,000-$15,000 or more. It’s not always necessary, but if you’re doing any sort of an addition or significant room change(s), plans will be required for the necessary permitting. Also, an architect can help you find the optimal use of space and can create more value than you might create with your own design… it’s what they do!

I can draw on recent experience to share an example of the process. We recently hired an architect for a relatively simple 20′ x 19′ family room addition. We started the process in November 2020 and received the necessary approvals one year later in November 2021. It does not take anywhere near that long for most people, but we are in a Protected Resource Area (RPA) and have a flood plain easement as well as a sewer easement running through our yard.

In addition to support from our architect and contractor, we also had to hire lawyers to attain a Deed of Vacation of Easement. It was definitely more involved, and more costly than we had anticipated, but we went through with it in order to build out.

After 12 months of effort and finally getting the permit approved, we thought we had gotten through the hard part. We were wrong. In the same month (November 2021), we ordered our windows and doors for the addition. We knew supply chain issues were creating delays, and anticipated a 3-4 month lead time, and so we expected the windows to arrive late February 2022. Wrong again.

In the first week of March, we learned that the revised arrival date for the windows would be… December. That’s right, December 2022, 13 months after we approved the order. In this case, shortage in aluminum was impacting lead times, and our supplier punted many smaller contracts to the end of the year to fulfill larger dollar orders. You can read more about that here if of interest.

So here we are present day: our addition is framed on newly poured concrete, with Tyvek construction wrap flapping in the wind for the foreseeable future. (We are currently working on alternate solutions — I’ll keep you posted!)

Our case is unique, but not entirely uncommon. Supply chain issues are thwarting many a remodeler. It’s not uncommon to hear delays for appliances of many months, if not a year. You may already be aware of the rollercoaster of lumber prices. Contractors everywhere are advising of increased prices looming. And that’s not to mention labor constraints! Contractors are struggling to find skilled, reliable workers, and this, too, is slowing the renovation process down.

So where does that leave us in our evaluation? It’s hard to truly understand what your fixed price for a renovation will be when you start. Smart builders always suggest you add at least 10% for overages, but presently, I suggest a little more.

So maybe it’s better to LIST IT?

This takes patience as well but selling the home shouldn’t be the challenge. With extremely tight inventory and many buyers, a home that shows well and is priced right should fly off the market, maybe even garnering multiple offers. However, if you’re staying in the market, that of course leads you to needing to find a home to buy.

There are countless articles about the challenges of buying in today’s market: Multiple offers, waiving contingencies, offers being accepted sight unseen, cash with the ability to close in a week… I’ve written about it recently myself! Without repeating that analysis, I’ll simply reiterate that we don’t see the market slowing any time soon.

LOVE IT OR LIST IT?

Well, as you can see, it depends on where you want to spend your energy, your money and your time. In my experience, if the question is on your mind, it’s worth sitting down with a knowledgeable real estate agent and an experienced contractor to weigh your options and determine what’s right for you.

Rebecca McCullough has built a successful real estate business in Alexandria and Northern Virginia by providing excellent service to her clients. If you would like more information on selling or buying in today’s complex market, contact Rebecca today at 571-384-0941 or visit her website RebeccaMcCullough.com.

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

0 Comments

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: In this “seller’s market” do I even need to…Paint my house? Replace the carpet? Fix the wood rot? Remodel the kitchen? Do anything??

Answer: The short answer is — Yes! However, it’s complicated, so the BIG question is — How much money do you want to make?

First, let’s talk about paint. The main reason to paint is to welcome the buyers into your home and create an impression of a well-cared for home that is light, bright and move-in ready.

I would say that this is the number one thing to do when putting your home on the market. It’s also easy and relatively inexpensive. With the right painter, you can get it done while still living in the home, with minimum disruption, and it will make a huge difference in how buyers will respond to your home. So yes, please do paint your home — both inside and out — where needed.

Do I need new carpet? Can’t we just shampoo it? 

From a buyers’ perspective old, worn, or stained carpet is a big no-no. The floors are one of the first things that a buyer notices when visiting your home.

Nobody wants to move in and start placing their own furniture in a home where the carpet needs replacing, or even cleaning. And when they think of what it may cost them to do it, it’s always double what it really costs — not an expense that they want to have after spending so much to buy the home. So yes, you should definitely think about replacing all of the older carpet before going on the market.

What about little spots of wood rot around the exterior of the home?

You definitely want to make a great first impression, so we always suggest you make sure that the front door and front trim look great. Any wood rot or deterioration on the rest of the home may go unnoticed… but, if your buyer does a home inspection, any good inspector will tell a buyer that wood rot equals water intrusion and it should be fixed. This one could be a “maybe” on the list of what to do to get ready to sell your home. However, I think it’s worth doing and shows that your home has been well-cared for.

Should I remodel my kitchen?

Kitchens are important, but a full remodel will be expensive and may not necessarily bring the immediate return that you are looking for. We suggest that the cabinets look good, and you may be able to accomplish that just by painting them!

If your appliances are older, it’s also worth replacing those that need it. Lastly, consider replacing your countertops if they are dated or dark. It’s probably not as expensive as you may think. Kitchens are big on the list of what buyers care about, and usually one of the first photos they look for.

The most important thing to do when selling your home is to make it appealing to the most buyers, and to eliminate as many “objections” as possible. Objections are things that a buyer perceives as issues or problems that will need to be addressed before they can call a home “their home”.

The longer their list of issues, the less likely they are to buy the home. As they add these things up in their head, they will definitely over-calculate the cost, and start thinking about what a pain it will be. Then they will either talk themselves out of making an offer or, if they do make an offer, they will lower the amount that they are willing to pay.

Read More

2 Comment

This week’s Q&A column is written by Sallie Seiy of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact Sallie at 703-798-4666 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: What is all this talk about waiving contingencies? It seems unfair.

Answer: If you’re a buyer now, or will be in the near future, you may be asking yourself, “do I really have to risk so much to win a home?” I challenge you instead think of it this way, “what strategies can I implement to reduce risk and position myself to win a home?” In our market of multiple offers, escalated costs, and the practice of waiving “everything,” it can feel like you, the buyer, are taking all the risk. However, the risk to you can shrink if you come in with a good, solid strategy.

Here are two contingencies that you can discuss with your Realtor about waiving and how best to flip the script on their risks.

Home Inspection Contingency

Writing an offer on a home is an exciting time, but the responsibilities of homeownership are real. As a potential new homeowner, it’s always important to know what you’re getting into when purchasing a new, unfamiliar home. There are ways to check on the health of the home on a regular tour, but an inspection will peel back certain layers that you can’t see or would otherwise miss.

Inspectors are the professionals and I liken them to the medical field. Home inspectors are like your generalist. They have mass amounts of knowledge about homes, can point out any red flags, and connect you to specialists to further diagnose any potential issues.

However, the market can be very competitive, so you’ll want to put your best foot forward on your offer. One way could be waiving a home inspection. Yet, that can feel uneasy to a lot of buyers. To eliminate this fear of the unknown, you can request to do a pre-offer inspection. This means having a home inspector out to the property prior to submitting your offer. A pre-offer inspection is usually no more than an hour and is performed between the time the home is active until the offer deadline, if there is one. While you do pay for this inspection prior to even writing your offer, like an ante in a poker game, it can save you so much money and headache down the road.

Your inspector won’t be able to check every window or every electrical socket. This pre-offer inspection is intended to focus on the high value items in a property: HVAC system, roof, electrical and structural, to name a few. Knowing the health of the most expensive parts of a home can help you make a more informed and confident decision about moving forward (or bailing) on your offer.

Appraisal Contingency

First off, we should define what an appraisal is in a real estate transaction. An appraisal is an unbiased, third-party opinion of value for a particular property and is performed by a licensed professional. An appraisal is always needed whenever a mortgage is involved in the transaction.

Read More

0 Comments

This week’s Q&A column is sponsored and written by Peter Crouch of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact Peter at 703-244-4024 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: Do I need to renovate in order to sell?

Answer: Home Sellers are bombarded these days with offers to buy their homes, ways to renovate to get the highest offer, and how to obtain the absolute highest price. It can be confusing, even paralyzing — the answer is a resounding “it depends.”

As in most elements of life, there is a spectrum of possibilities here. Essentially there are three ways to sell a home — it doesn’t have to be perfect.

“As-is, where-is.” This is often when a property has not had many updates or upgrades along the way, and now there is a need to sell. There may not be the funds or desire to undertake any work, and a sense of just wanting to be done with it. This is what the folks sending the postcards are looking for — to purchase a property well under market and “flip” it. They will even take care of contents left behind.

As you would expect, this produces the lowest monetary result for the Sellers. Many of these Buyers are looking to purchase that property for 50-60% of “ARV” — After Renovated Value. Rarely a good deal for the Seller.

Fully Renovated at Top Market Condition. At the other end of the spectrum, the houses which receive the highest prices are the ones fully updated, with all the new and modern features that appeal to today’s Buyers. They are often exquisitely staged, and clearly at the top of their game.

It is one thing, however, to have continually updated one’s property and arrived at this top condition just as it is time to sell. It is another to think of enduring a big remodel just to sell: braving potentially lengthy disruptions, risking supply chain issues, and spending tens of thousands of dollars? Is it worth it? Maybe. Maybe not.

Today there are options to have the renovation work completed by companies who specialize in quick turn-around renovations just before a sale. Some will even front the cost and are paid when the house sells/settles. The McEnearney Advantage features a partnership with such a company, Curbio, and that type of renovation can absolutely be accomplished for a Seller. It works best when the house is empty, but it can also be done around residents. We are happy to help obtain estimates to see if it is right for you. Often, when the dust settles, you can reap very nice returns on the time and money spent. If it is the right approach for you.

In the middle of the spectrum: Clean, Fresh, Nothing Broken. In this approach, a home is decluttered or emptied (depending on whether it is occupied or not), then cleaned, painted, the flooring replaced/refinished, and any items fixed that are worn out or broken.

In many cases, the cost can be fronted and paid at settlement. This not only keeps the preparation time and cost down, it allows the Buyers to put some of their own personal touches into the house after settlement. This approach, in this market, usually yields a price a little below Fully Renovated.

In reality, most houses are prepared for market at a level somewhere between Clean, Fresh, Nothing Broken, and Fully Renovated. Perhaps a powder room near the entrance foyer gets a new pedestal sink, faucet, light and mirror. Or new light fixtures in the kitchen or primary bath. Or new appliances. These relatively minor items can be among the most cost-effective a Seller can undertake.

At McEnearney Associates we believe that preparation for the market, to the extent that works best for our clients, is one of the great values we add. And no, it doesn’t have to be perfect.

Pete Crouch is a Seniors Real Estate Specialist, which means he is well-versed in all aspects of moving as we age. His own downsize gave him tremendous insights into what is involved, from emotional matters to real estate considerations. Pete is a Board Member of At Home in Alexandria (AHA), our local Senior Village, and was the 2018 National Recipient of the “Outstanding Service Award” by the National Association of Realtors for his work with Senior Moves. Text 703-244-4024 or email [email protected] for a copy of his Downsize Alexandria! Booklet about living more simply in Greater Alexandria.

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

0 Comments

This week’s Q&A column is sponsored and written by Ann Duff of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact Ann at 703-965-8700 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: How do I avoid being a juicy chapter in a real estate tell-all book?

Answer: Realtors don’t judge, but we have seen everything… and we could write a book! Don’t become a juicy chapter! 

Tell-all books continue to be the rage, but the story you want to tell about the home you are going to sell or lease should be happy, not scandalous. Buyers or potential lessees should be delighted to see the space you are offering, not bombarded with unexpected situations.

Just this week I visited a lovely home to prep it for a spring sale. It offered an up-close look at the lingering impact of COVID Confinement. At the moment, this house takes real imagination to picture former bedrooms in their original state, littered as they are with ring lights, files, PCs, office chairs and files.

Unwanted surprises can be the simple crunching of a Lego piece or ink pen under a boot, or shocking eyeballs out of their sockets with inappropriate “artwork” of unclothed subjects, animals mounted on the wall and framed political revolution flyers.

You would think that owners would put prescription drugs away, stash the cash and watches, and hide their private correspondence, Social Security numbers and password lists.  Unfortunately, in many cases you’d be wrong. Also, often in plain view are too many personal photos, knickknacks and geegaws distracting the visitors.

And, if not just distracting, you can unintentionally create worries. Obviously broken items, all-too-fresh paint, and sticky notes claiming “as-is,” “plumber coming back,” “mold test underway,” or “pardon the mouse traps” can raise concerns about the level of maintenance the house has received during your ownership. Reading any detailed brochure copy will be helpful, but a now-startled buyer may offer thousands of dollars less than originally considered or simply walk away.

Corral the pets, too, because hyper-amorous dogs or slinky cats in need of attention can literally trip up buyers or tenants. If you leave the house, take the four-legged ones along. Slow-moving tortoises in a glass terrarium are just fine, but keep the other animal life out of the tour. Even a screeching macaw makes just too much noise and suddenly the rooms feel small, I know from experience.

Under construction? Just removed those steps to the basement? Forgot to put up yellow CAUTION tape? A dear real estate friend took a step through an unmarked doorway and broke both her arms when she suddenly landed on the basement floor below.

Read More

0 Comments

Ask McEnearney: How will I know?

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: How will I know?

Answer: When searching for “the one”, so many have the same question. To quote the late, great Whitney Houston — “How will I know?”

In fact, buying a home is a lot like falling in love and can sometimes last a lot longer!

You will also find that friends and family may want to weigh in. Sometimes their advice can be helpful, but sometimes not. Just because they think you absolutely must live inside the beltway, or should have a big yard, doesn’t mean it’s so. So, how do you filter out the good intentions and find the right home for you?

Trust your gut: Just like when you meet someone new, if something feels fishy it probably is. Unlike dating, it isn’t rude to ask invasive questions! Don’t be afraid to ask. If someone does not want to answer your questions, that could be a bad sign. Maybe it’s just a sign of a noncommunicative agent, but it shouldn’t be difficult for you to find out ages of systems, roof, etc.

Take opinions with a grain of salt: Of course, you have an inner circle who you share everything with and their opinions can be crucial. But take their advice with a grain of salt. They won’t have to live with your decision in the same way that you will. If something feels off, listen to that feeling. Sometimes your loved ones won’t see the diamond in the rough the same way that you can, so take that with a grain of salt as well.

Beware of catfish! Pictures online can only show so much. We all know how photos can be edited these days, and so much can be added or subtracted. Blemishes and scars may be things that you can forgive a partner for covering up, but you usually need to know the story if there are issues in the home.

Outside beauty is not necessarily reflective of inner beauty! Shiny and new can hide a ton of flaws. Even if the pictures very accurately depict how gorgeous a home is, there is due diligence to ensure that the inner beauty is there as well. Just like people, there are ways that we can discover the inner beauty of a home. You just have to know how to look.

Don’t force it: There are plenty of fish in the sea! Of course, especially in this market, searching for a home can feel just as hopeless as finding a nice, single partner in the D.C. area. Sometimes it can take a while. However, the one IS out there! Like every relationship, you will likely need to make just a few compromises, but if it’s true love it won’t feel difficult to know which compromises to make.

Reality TV is the thief of joy: Ok, I know that old adage is “Comparison is the thief of joy,” but let’s be frank here. House hunting on TV is realistic in the same way that The Bachelor is realistic. Of course, being in it for the right reasons is important, but that’s about where the similarities end. You can get cute ideas for a date night or a new backsplash on shows, but don’t get carried away thinking that their journey is real.

It’s your journey! And every journey is different. Your Realtor is key in making your dream a reality. They will help you to decide if what seems too good to be true, is actually the right home for you. Your Realtor is your closest adviser, and will help to protect you from heartbreak, so that love becomes real!

Home is where the heart is! Happy Valentine’s Day!

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

0 Comments

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 703-738-9513 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 for the second half of 2021 compare with 2022?

Answer: The City of Alexandria’s real estate market in the second half of 2021 looked a lot like the second half of 2020.

Source: BrightMLS. Data deemed reliable, but not guaranteed

Condos constitute about 44% of all sales in the City, and there was an almost 2% increase in the number of units sold. This was the only property type with an increase in sales. However, those units took considerably longer to sell, with an average number of days on the market climbing to 38 from just 21 in the second half of 2020.

Unit sales of attached homes fell 5%, but they sold about three days more quickly than in 2020. The number of detaches homes fell by almost 10%, and those homes sold in an average of 24 days, a considerable improvement from 32 days in 2020.

Overall, the total number of homes sold in the City fell by 3%.

The reason for the relatively stagnant sales was the lack of inventory, especially as the year came to a close. In fact, the lack of inventory was stunning. There were half as many attached homes, only one third as many detached homes, and just 60 more condos on the market.

What’s Ahead for the First Half of 2022

We’re starting the year with a significant inventory deficit, and that won’t change quickly.

Read More

0 Comments

This week’s Q&A column is sponsored and written by Lisa Groover of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact Lisa at 703-919-4426 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: Now that I have moved into my dream home in Alexandria, what would you suggest as a way to get involved in the community?

Answer: That is a great question, and one I hear from my clients, especially those who are moving from out of state. Although I have lived in Alexandria since 1989, I am from Florida, and lived in Texas, New Jersey, and New York prior to finding my true home in Virginia. For that reason, I will use myself as an example for how to become a “local”.

Ask yourself: What are my favorite things to do? How about my hobbies and interests? Am I passionate about a specific subject or cause? Do I enjoy volunteering? Do I have any pets?

In my case, I love collecting art, spending time with my golden retrievers, interior design and giving back to the community where I live. When I moved to Old Town in 1998, I joined the board of the Friends of the Torpedo Factory and attended festivals throughout the region. As an agent, I have been able to work with local artists to stage my listings and hold “meet the artist opening receptions”.

Exploring where I could take my dog, including shops, outdoor restaurants, the doggie cruise on the Potomac, and the various parks in Alexandria was a great way to get to know Old Town, and meet other dog lovers. I later volunteered as a basic obedience trainer with Mount Vernon Dog Training Club and competed in obedience and rally trials.

Having thoroughly enjoyed decorating my own house, I began helping friends and neighbors with ideas for theirs. Now I take great pleasure in staging a home for sale — whether on my own, or with a professional stager.

When I first moved to the area, I started volunteering on an ad hoc basis with a number of local nonprofits until I found the organizations that I hold dear to my heart. As a supporter of the commitment to “Live where you Love, Give where you Live”, I continue to volunteer with a number of groups and volunteer as a TWIG — the Junior Auxiliary of Inova Alexandria Hospital —  in their thrift shop and homes tour.

Looking back at the ways I have gotten to know my neighbors and fellow supporters of Alexandria, the word “collaborate” comes to mind. Coming up with ways to raise funds and awareness without “dialing for dollars” has been a lot of fun and extremely rewarding. Between clothing drives, collecting electronics for recycling, holding shredding days, sponsoring dog walks, and hosting shopping nights at local boutiques, I find that it is a “win-win” for all involved.

In that spirit, are you available on Thursday, February 3 for a terrific event to meet some wonderful people and give back to the community?

Join me at the Sara Campbell boutique (320 Prince Street) from 5-7:30 p.m. for a fantastic shopping experience to support The Board of Lady Managers — a humanitarian organization serving the unmet medical needs in Alexandria. We will receive first dibs on the deeply discounted ladies’ fashion and accessories prior to the Alexandria Warehouse Sale, and enjoy 10% off of full price merchandise.

AND… 10% of all purchases will be donated to The Board of Lady Managers! If you can’t come that night, stop by during the day, mention the event and receive the same special pricing. I look forward to seeing you! 

I hope that these suggestions will be of interest to you and help you get established in Alexandria!

Lisa Groover is a licensed real estate agent with McEnearney Associates, Inc. in Old Town Alexandria, VA. As an active member of the community since 1989, Lisa specializes in Alexandria, and is thrilled to have the opportunity to work closely with her friends, neighbors, former clients and their referrals.

In addition to enjoying the Old Town lifestyle and the art related events and activities, she is a member of a number of volunteer organizations. Having had nine Golden Retrievers, she is dedicated to helping other dog owners through the challenges of renting, buying and selling their home.

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

0 Comments

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: Is it a Boom or a Bubble?

Answer: Happy New Year, real estate readers! I hope you’re as excited as I am for another unpredictable year in real estate in Northern Virginia. These last couple of years have been ones for the record books — unprecedented times have led to unexpected results. Who would have thought the real estate market would soar during a global pandemic? More than surviving, the market is thriving. But…

Is it a boom or a bubble?

In my view — after analyzing the reports and many a deep dive into the economics — if it’s a bubble, it’s one made out of titanium.

Let’s look at why. There’s a trifecta of circumstances occurring right now, including:

  • Economic Inflation — We are starting to see inflationary pressure. Economic theory tells us that inflation leads to increases in real estate prices. The U.S. Bureau of Labor Statistics showed inflation was 6.2% from November 2020 to October 2021. Inflation as an isolated factor drives real estate price increases. But it’s not an isolated factor…
  • Housing Shortage — This is an enormous factor in our current outlook. There simply aren’t enough houses to meet the demand. After the 2007-2008 financial crisis, building decreased dramatically. This has had a carry-on effect, and today you’ll see reports that we are a whopping 5 million units short of national housing demand (!!).
  • Low Interests Rates — Finally, interest rates remained in the 3% range for almost the entirety of 2021, even falling below 3% at some points. With inflation rising, it is likely that interest rates will increase as well. However, as such a low baseline, an increase to 4% or 5% still leaves us with great mortgage lending rates. If a buyer can lock in 30 years at that rate, they are likely in a solid position with their investment.

Ah, but “it’s bound to slow down soon,” right? “Prices will moderate?”…right?

There is some belief that yes, we will see a more moderate market this year. However, demand is still incredibly strong, and inventory is so very low as we start the new year, that there’s no indication of things slowing any time soon.

We shall see. But here’s a current example in the zip code where I live (Alexandria/Ft Hunt area). There are almost 4,800 detached homes in existence here. Of that, there are six for sale. Six. (That’s 0.125% availability for my fellow math geeks.) The demand hasn’t waned, so that’s dozens of potential owners looking to buy now, with six available homes in this area. That is just one example, of course, but it’s representative of the current constraints (or opportunity, depending on your position!). There are neighborhoods all across Northern Virginia with similar statistics.

Unsurprisingly, the current environment is impacting the price of homes. There are daily headlines of double-digit home value increases. What’s the reality here in Northern Virginia? Take a look at the chart below — you may find the numbers surprising.

Read More

2 Comment

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: This might be a silly question, but…?

Answer: “I have a silly question” is something that I hear far too frequently and usually followed by something that I’ve been asked before and isn’t silly at all. Frankly, in my opinion, there are no silly questions.

Before I went full time into real estate, I taught health to 6-12th graders. Like real estate, the stakes were pretty high if questions went unasked. Believe me when I reiterate my opinion that there are NO silly questions. If there is something that you want to know about one of the largest purchases you will likely make — don’t be afraid to ask!

In the meantime though, here are a few of the most commonly asked “silly” questions that I get all the time!

Does the seller have to tell me if there is a ghost in their home? AKA, What must be disclosed?

To me, this is the epitome of a “silly question” and when I say that I mean: something everyone wants to know but doesn’t want to ask. Just further proof that a silly question doesn’t exist. Anyway, to answer the question in short — not in Virginia they don’t.

Sellers are only required to disclose material facts that would affect the value of the home, but ghosts are definitively non-material. Virginia is a “caveat emptor” state, which means “buyer beware”. In fact, the Virginia Residential Property Disclosure is a document listing sixteen items, from “Condition” & “Defective Drywall” to “Sexual Offenders” & “Historic District Ordinance”. All sixteen begin with the verbiage “The owner(s) makes no representations…”

While this may sound disheartening for those looking to buy property in the future, don’t worry — there are many opportunities for you to find out most of this information. Your Realtor will help you with resources and inspectors to ensure that you are well aware of what you are getting into before moving in.

Can I look in the closet? AKA, How up close and personal can I get with a home I want to buy?

As a general rule of thumb, I’d say treat a home that you are viewing the way you would want a visiting friend to treat your home, but maybe just a little nosier. Sellers will expect potential buyers to open a closet, go in an attic and poke around in the basement. However, things like adjusting the thermostat, turning on appliances, touching personal items, and forcing open something that’s been painted shut are definitely things to avoid.

A home showing is a time to see if you like the home. An inspection is the time to check if things are in order since inspectors are licensed and insured.

Who pays who? AKA, ANY money questions

If we haven’t gotten real enough — let’s get REALLY real. No one likes to talk about money, especially in the terms of “how much am I paying you?” But, it is a very valid question and one that must be addressed.

As a home buyer, all of the money you pay will go towards your home purchase. In addition to your down payment, there are closing costs that you will owe, mostly to the lender and settlement company in order to process your loan and title work. The Realtors however, are paid by the seller.

Will I need to buy new appliances? AKA, What comes with the home?

While it is typical in Virginia for all items attached to the home to convey (or come with) the home, this doesn’t always apply. The sales contract includes a list of conveyances, and it can typically be assumed that if a home has an item on the list, it will convey. However, there can always be exceptions.

Sample conveyances list from a real estate contract

Read More

0 Comments
×

Subscribe to our mailing list