Today's housing market in Northern Virginia is hotter than ever, and recent buyers are finding it challenging to navigate. Tashina Gorgone and her husband purchased a home in Fairfax County in April, but they faced intense competition. They attended an open house with a long line of prospective buyers. Using today's market tips, they were able to successfully navigate a complex and competitive real estate market.
Buying a home in a seller's market
As with any city in the Washington metropolitan area, the housing market in Fairfax is very competitive. While the median home value is $724,990, this area also has an extremely low crime rate and a low number of homes for rent. Despite this, Fairfax homeowners still prefer to purchase over rent, which may be contributing to the high median listing price per square foot. However, the median listing price for a home in Fairfax is much higher than in other parts of the Washington metropolitan area.
Despite the low inventory and high demand for real estate in Fairfax, VA, interest rates will remain extremely low. In fact, some homebuyers have reported interest rates as low as 2.5%. Sales will remain slow in the first two quarters of 2021, but will pick up later as the virus clears up. This should make buying a home in a seller's market in Fairfax VA a lot easier than it was before the virus hit the area.
Creating a strategy as a buyer in today's market
Creating a strategy as a buyer is essential in today's market, when homes are selling for higher prices than a year ago and inventory is at an all-time low. In December, only 1.07 million homes were for sale in the United States, which is the lowest level since 1999. Potential homebuyers are facing increased competition in finding a home, and they are also experiencing difficulty getting their offers accepted. This makes a strategy more important than ever, and here are some tips to make the process go smoother:
Pricing a home to keep buyer demand
The Virginia real estate market remains a seller's market in the second half of 2019. This is a result of low inventory and high prices. Coastal cities and more expensive Northern Virginia will be especially hot, so investors may want to consider buying single-family homes further from the Washington, D.C. suburbs. Fears over COVID-19 are hampering the rental market.
Because of the high demand for affordable homes in the area, the median days on market have decreased considerably since last year. However, first-time homebuyers tend to have tighter budgets than experienced buyers. While the median salary in Northern Virginia is among the highest in the country, student loans can make an otherwise modest budget much more difficult to justify. While many Fairfax VA homebuyers have good jobs, their salaries aren't quite aligned with their budgets. A first-time homebuyer's budget may be slightly higher than what the average buyer would pay in the area.
Ibuyer companies vs traditional home flippers
While iBuyer companies have taken the market by storm, they are only a small percentage of homebuyers. According to Redfin, a national real estate brokerage, 0.3% of homes will be purchased through iBuyer companies in 2020. The concept behind iBuyers is not new. Investors buy run-down properties, renovate them, and then resell them.
The benefits of iBuyer companies are numerous, including speed and convenience. Unlike traditional home flippers, they do not require staging, loan underwriting, or a lengthy closing process. Instead, they can close a deal in just a few days, reducing the hassles associated with selling a home. In addition, iBuyer companies save sellers money by avoiding the commissions of real estate agents.
Getting pre-approved before putting your home on the market
One of the best ways to increase your chances of selling a home is to get pre-approved for a mortgage before you put your house on the market. Having a pre-approved mortgage letter means that the lender has already reviewed your financial background and determined that you can afford the home price you have set. It also gives you a powerful negotiating position. Since you know that you are serious about buying a home, the seller will be more likely to offer a higher price than the asking price.
Getting pre-approved for a mortgage before you put your home on the market is important for many reasons. It will give a potential buyer a sense of how much they can afford and may eliminate properties that are out of their price range. First, you must select a lender for your mortgage. You should also shop around for the lowest rate and fees, so it's worth pursuing pre-qualification with more than one lender.