Is the Real Estate Market Peaking?

If you have been around since the market crash in 2007, you may be comparing today’s market activity to yesteryear and wondering if our market is peaking again? Well, let’s look at what’s going on in today’s market.

For most of the first quarter, Western Prince William County’s resale supply and new construction supply of homes continued to decrease making it a Seller’s market.  The median listing price pushed higher. The median Days on Market was less than two weeks.

We saw house prices continue to rise.  In March, the median sales price in Northern Virginia was $615,000 compared to the five-year average of $520,160.   The market below $1,250,000 was very competitive for buyers and most home sellers received multiple offers, some with waived contingencies. Especially hot was the below $700,000 price range. Homes were selling for at or above list price and moved to pending status very quickly.

Doom and Gloom Coming or Just a Blip?

Rising rates cannot be overlooked.  30-year fixed rate mortgage rates have been on the rise increasing as much as 1.5% compared to one year ago.  Inflation, along with the FED no longer purchasing mortgage-backed securities is another yellow flag.  Recently, the FED announced that is no longer going to continue with the quantitative-easing program.  Additionally, the FED has indicated that they will continue to increase the FED funds rate to battle inflation.

It appears that some people are becoming more cautious and pulling back on spending recently.  Some homeowners are now realizing that their feeling of wealth derived from the increase in their home’s value is somewhat caused by inflation.  These inflated dollars don’t go as far as they did a year or two ago because all consumer goods are increasing in price rapidly.

It is too early to tell, but we have recently experienced a slight reduction in number of contracts presented on new listings.  Perhaps this is just a blip in on the radar, but only time will reveal whether this is the start of a possible slowdown from the turbo paced real estate market that we have experienced in recent years. 

Even though interest rates have jumped upwards from their bottoms, the rates are still historically low.  If someone is sitting on the fence regarding moving now or waiting, I would certainly encourage them to make their move now.  I do not foresee housing being cheaper within the years to come.

Ashley Leigh, Broker (Linton Hall Realtors)