Spring 2024 - 5 Things You Really Need to Know About the DC, Maryland and Virginia Housing Market
The best time to buy a house is when no one else is. For many of my clients, they listened when I told them to lock something up in November or December of 2023. Thankfully for them, seven clients ratified contracts between Halloween and the end of 2023. Because as I predicted and expected, we’re off to the races again.
Spring is always a competitive time. When interest rates peaked in 2023 at nearly 8%, there was lots of panic. But now that rates came back down a bit, currently hovering in the mid 6’s, people are back out there and this spring is looking like every other spring thus far.
I already have some frustrated clients, so let’s cover some things you really need to know if you are looking for a home this spring.
1. Don’t Fixate on the List Price
Don't pay too much attention to the list price - especially when it comes to properties new to the market. When a property is newly listed, anything can happen. The seller can get tons of interest or none at all. And that depends on a lot of different factors like interest rates, consumer sentiment, timing, weather, location.
The list price is the number that the seller and listing agent decided to list the home for, but it may or may not be representative of market value. Market value is what someone is willing to pay for a home. The way the listing appointment went, the agent likely tried to tell them to price it a little below market value to elicit a lot of interest, and the seller fought back to price it higher. Then they agreed to a number and that number rarely means a lot. The seller always wants more and if there are several people circling the house, they very well could get more.
Again, loud enough for the people in the back - Market value is what someone is willing to pay.
2. Negotiating the Best Price
For some buyers, being able to negotiate and experiencing the thrill of the hunt is important to them. If negotiating on price and terms is really important to you, and it’s more important than getting the right house, then please pay attention here. DO NOT run out and look at all the new homes as soon as they hit the market. The ability to negotiate is very low when a home is new to the market and there is a lot of interest.
3. Waiving a Home Inspection
I never recommend waiving a home inspection entirely. It’s silly and can have catastrophic consequences. Most buyers are on board with this. Unfortunately most sellers are not. They don’t want you to do an inspection and if you do, they don’t want to be informed of what is wrong with their home because should you walk away, they have to disclose everything now that it’s been uncovered by a licensed inspector.
4. How High Are These Escalations
The rising interest rates affect different price points of the market differently. Those in the $500,000 and below market were hit harder. That market essentially halted when the rates rose. There wasn’t a lot of change at the $700,000+ price points. That part of the market kept moving as if the rates hadn’t risen at all.
In the heyday of sub 3% interest rates, the escalations around homes priced at $1,000,000 would typically be at or above $100,000. We saw escalations as high as $700,000 from the outliers, but usually if the home was priced correctly you would see the homes priced at $1.2M rise to $1.35M - $1.4M range. At the lower price points, escalations were $50,000 - $75,000. These escalated price ranges make sense if you think about it. Lower priced homes may be sought after by single income families, so there’s less flexibility in the ability to escalate the price. And there’s more price sensitivity for those at the income levels who can afford the $500,000 homes.
5. Which Homes Escalate in Price?
We have seen this show before. It’s always the homes that show the nicest, appear to need the least amount of work and are updated. They don’t have to have top of the line and latest trends in every room. But they have to be clean and well cared for with no visible repairs or big ticket items needed replacement. People will paint, but no one wants to replace a bathroom or an HVAC system.
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If you have any questions about this video, leave a comment! If you have questions about real estate in DC, Maryland or Virginia, my contact info is below.
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Melissa Terzis
📲 (202) 253-9105
📩 Melissa@MelissaTerzis.com
🌐 www.dcrealesta...
TTR | Sotheby's International Realty
1515 14th St NW
Washington, DC 20005
Office: (202) 234.3344
- Melissa Terzis | DC Real Estate Mama