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People ask me all the time Hows the Market? Typically, the person asking wants to know if prices are rising or falling and whether conditions favor buyers or sellers. Sometimes, they are considering acquiring or disposing of real property. My answer is always the same; It depends on where the property is located. The Washington, DC Metropolitan Statistical Area (MSA) has been an appreciating market since 2009. Las Vegas did not see their values stabilize until March of 2012. There, at bottom, the average home had lost about two thirds of its peak value. The cycle in Las Vegas lasted six years; ours was really less than three. Real Estate is local. Cable News speaks to an inventory shortage and twenty percent annual appreciation. That may be the case in Las Vegas or other markets well behind us in the cycle. In our MSA, annual appreciation is a sustainable rate of 7.6 percent. While inventory levels are certainly lower than theyve been in recent years, there is no shortage; there is a restored balance. Frankly, we now enjoy the most balanced market of the New Millennium!
Lou Muscarella
REALTOR 6629 Old Dominion Dr. McLean, VA 22101 Office: 703-556-4222 lou.m@c21nm.com
www.Loumuscarella.net
703-405-3019
SELLER PERSPECTIVE
The abrupt decline between 2007 and 2010 was interrupted mainly through public policy intervention. Interest rates were lowered, tax policy was suspended, banks were backstopped. Short sales replaced foreclosures and loans were modified. Values stopped declining and began appreciating. Retraction of these incentives is underway at a pace which is healthy for the industry. Left in place, they provide artificial return or safe harbor. Every public policy expiration moderates buyer or seller activity and returns control to the private sector. There, the variables are simply supply and demand.
SUSTAINABILITY
BUY-SIDE VARIABLES
TIMING
The pace of existing home sales clearly demonstrates how sustainable current trends really are. Transfer activity is running at only sixty percent of peak velocity and remains below the year 2000 level. Considering population growth, continued improvement is likely. Typically, spring and summer months represent about two thirds of transfer activity in any given year. The first half of 2013 has been very active and is showing no sign of the normal seasonal respite. Potential purchasers seem to recognize the departure of artificially low rates as a unique opportunity. Fall and winter markets historically favor buyers. This year may be different. Well see.
SELECTION
Just as the thought of six percent interest rates now seems catastrophic, only two months of inventory now feels like a shortage. Factually, six percent is a terrific and healthy rate and two months of inventory is normal. Both are what weve been hoping for but we forgot what normal and healthy was like. There are plenty of homes to pick from at fair market value. If you buy a home today at fair market value, odds are youll be able to sell it for more later if you want to or need to. In the meantime, you get to live there. Thats fair. Please welcome back The American Dream!
SUMMARY
If you are considering a real estate transaction, thorough analysis and competent representation are essential. We are in a transitioning market. There is potential for profit, as there is risk of loss. If we understand the underlying facts, we can continue to make good business decisions logically and without emotion. I am a real estate professional and accept responsibility for keeping my friends, neighbors, and business community informed as to all aspects of things affecting the real estate portion of their holdings. If your home is currently listed for sale, this is not a solicitation. If you have a real estate question, I will be happy to answer it or find the answer. If you have a real estate need, I will appreciate an opportunity to compete for your business. Our team is very good at what we do. Results demonstrate that now more than ever before. Dont settle for less. Sincerely,
Lou Muscarella
REALTOR 6629 Old Dominion Dr. McLean, VA 22101 Office: 703-556-4222 lou.m@c21nm.com
703-405-3019