A Perfect Storm Hits the Real Estate Market
The spring housing market is typically the busiest time of year for real estate. However, this year, house hunters will have even less to look at due to a ‘perfect storm’ of market conditions squeezing an already tight supply even tighter.
The movie ‘The Perfect Storm’ was based on the 1991 Perfect Storm (also known as the Halloween Gale) that hit the north Atlantic when several weather forces (including a nor’easter and a hurricane) collided to create a massive storm. The storm pummeled the east coast with high waves and coastal flooding. The movie depicts 100-foot waves at sea, but that is debatable.
In todays’ real estate market, we have several forces contributing to inventory crunch.
- Builders margins are getting squeezed by rising material prices and labor costs.
- Many sellers are hesitant to list their homes because of a lack of selection on where to move next.
- Multi-family developers are still having a harder time getting financing for a condo rather than a rental building.
The perfect storm is keeping supply low and also keeping prices up for most areas. Multiple offer situations are not uncommon.
It's not just Arlington with low inventory and rising prices, but all over Northern Virginia.
[table id=25 /]So what is a person supposed to do?
If you are a seller, you can sit back and smile as you have the upper hand in this market - but don't get too greedy. The market stats are averages, which means there are still overpriced condos that will sit on the market.
If you are an owner and contemplating whether to sell, now might be a good time for you. There are many factors to consider when selling, but right now the market is favoring sellers so give it some serious thought.
If you are buying, don't lose hope. Homes are still selling and someone is buying them. In this market, you need to be competitive. You will need to have your pre-approval letter ready and don't shy away from escalation clauses.
Whether you're buying or selling and just want some advice, don't hesitate to reach out to me. Let's grab a cup of coffee and talk about your situation.
