Have prices the last month jumped the shark?

[Anonymous]

Anonymous wrote:Probably not a popular opinion, but I really do think these prices are going to stick. Inventory in this area is exceptionally low and demand has always been strong. The difference now is that the people shopping for SFHs aren’t just the people who always wanted to live in the suburbs. Now you have all the formerly happy urban condo dwellers who have decided that, if they don’t need to commute 5 days a week downtown anymore, they want the space a SFH in the ‘burbs provides. As the pandemic comes to a close, I think there are a lot of people who have realized that they still need to stay close to DC but don’t necessarily need to be downtown or in Arlington anymore. So they are taking their 2 six figure salaries, their extremely low mortgage rates, and their stock market gains and the are shopping in areas that never really had that kind of attention before. As expensive as this area is, many 2-professional families are still paying what is considered an “affordable” monthly payment relative to income.

I’m afraid this is my prediction too. Prices aren’t going to decrease significantly in most of the DC metro area.

[Anonymous]

Anonymous wrote:

To what extent have people observed whether this is impacting the market for townhomes?

I saw a townhouse listed in Ashburn for 1.3. So I’d say it’s carrying over. 😳

[Anonymous]

Anonymous wrote:

Anonymous wrote:

To what extent have people observed whether this is impacting the market for townhomes?

I saw a townhouse listed in Ashburn for 1.3. So I’d say it’s carrying over. 😳

Okay but what about normal 2,000 square foot townhouses, rather than new construction 4,000 square foot homes with elevators?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

To what extent have people observed whether this is impacting the market for townhomes?

I saw a townhouse listed in Ashburn for 1.3. So I’d say it’s carrying over. 😳

Okay but what about normal 2,000 square foot townhouses, rather than new construction 4,000 square foot homes with elevators?

Don’t know. The 1.3 was not new construction.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

To what extent have people observed whether this is impacting the market for townhomes?

I saw a townhouse listed in Ashburn for 1.3. So I’d say it’s carrying over. 😳

Okay but what about normal 2,000 square foot townhouses, rather than new construction 4,000 square foot homes with elevators?

We looked a pretty ordinary updated but not luxury TH in silver spring outside the beltway. Listed for $406 and closed for $460. We hadn’t looked at any TH and wasn’t sure what we would offer but our agent thought $430 would be enough.

[Anonymous]

Anonymous wrote:Probably not a popular opinion, but I really do think these prices are going to stick. Inventory in this area is exceptionally low and demand has always been strong. The difference now is that the people shopping for SFHs aren’t just the people who always wanted to live in the suburbs. Now you have all the formerly happy urban condo dwellers who have decided that, if they don’t need to commute 5 days a week downtown anymore, they want the space a SFH in the ‘burbs provides. As the pandemic comes to a close, I think there are a lot of people who have realized that they still need to stay close to DC but don’t necessarily need to be downtown or in Arlington anymore. So they are taking their 2 six figure salaries, their extremely low mortgage rates, and their stock market gains and the are shopping in areas that never really had that kind of attention before. As expensive as this area is, many 2-professional families are still paying what is considered an “affordable” monthly payment relative to income.

100% what I'm seeing where I have a rental SFH in Manassas. This is a part of Manassas on the border between Woodbridge and Manassas so far away from either 95 or 66. It had a massive decline in values after the 2008 housing crash and was super slower to recover since then. But now the values are skyrocketing. And for good reason. There are large homes with large yards built in the last 15 years that are total bargains compared to what you get anywhere else in NOVA this close in. Plenty of room for multiple home offices. Good schools in this district. For those that need to go in once or twice a week there is the buses, VRE, etc.

[Anonymous]

Anonymous wrote:Probably not a popular opinion, but I really do think these prices are going to stick. Inventory in this area is exceptionally low and demand has always been strong. The difference now is that the people shopping for SFHs aren’t just the people who always wanted to live in the suburbs. Now you have all the formerly happy urban condo dwellers who have decided that, if they don’t need to commute 5 days a week downtown anymore, they want the space a SFH in the ‘burbs provides. As the pandemic comes to a close, I think there are a lot of people who have realized that they still need to stay close to DC but don’t necessarily need to be downtown or in Arlington anymore. So they are taking their 2 six figure salaries, their extremely low mortgage rates, and their stock market gains and the are shopping in areas that never really had that kind of attention before. As expensive as this area is, many 2-professional families are still paying what is considered an “affordable” monthly payment relative to income.

I'm a hard money lender active in the market. Prices can stick, maybe, if rates stay where they are. I say maybe because I've started to see people buy houses like they buy toilet paper, driven by panic, which is never sustainable. There's also a ton of stimulus money still active. The direct checks were inconsequential but I have clients who received millions in PPP loans (and similar support) whose businesses are still headed for insolvency in the next year or two.

If rates rise even 1%, affordability starts to fall off a cliff. People have short memories.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Probably not a popular opinion, but I really do think these prices are going to stick. Inventory in this area is exceptionally low and demand has always been strong. The difference now is that the people shopping for SFHs aren’t just the people who always wanted to live in the suburbs. Now you have all the formerly happy urban condo dwellers who have decided that, if they don’t need to commute 5 days a week downtown anymore, they want the space a SFH in the ‘burbs provides. As the pandemic comes to a close, I think there are a lot of people who have realized that they still need to stay close to DC but don’t necessarily need to be downtown or in Arlington anymore. So they are taking their 2 six figure salaries, their extremely low mortgage rates, and their stock market gains and the are shopping in areas that never really had that kind of attention before. As expensive as this area is, many 2-professional families are still paying what is considered an “affordable” monthly payment relative to income.

I'm a hard money lender active in the market. Prices can stick, maybe, if rates stay where they are. I say maybe because I've started to see people buy houses like they buy toilet paper, driven by panic, which is never sustainable. There's also a ton of stimulus money still active. The direct checks were inconsequential but I have clients who received millions in PPP loans (and similar support) whose businesses are still headed for insolvency in the next year or two.

If rates rise even 1%, affordability starts to fall off a cliff. People have short memories.

Hasn’t Yellen recently indicated rates are going to have to come up sooner than planned?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Probably not a popular opinion, but I really do think these prices are going to stick. Inventory in this area is exceptionally low and demand has always been strong. The difference now is that the people shopping for SFHs aren’t just the people who always wanted to live in the suburbs. Now you have all the formerly happy urban condo dwellers who have decided that, if they don’t need to commute 5 days a week downtown anymore, they want the space a SFH in the ‘burbs provides. As the pandemic comes to a close, I think there are a lot of people who have realized that they still need to stay close to DC but don’t necessarily need to be downtown or in Arlington anymore. So they are taking their 2 six figure salaries, their extremely low mortgage rates, and their stock market gains and the are shopping in areas that never really had that kind of attention before. As expensive as this area is, many 2-professional families are still paying what is considered an “affordable” monthly payment relative to income.

100% what I'm seeing where I have a rental SFH in Manassas. This is a part of Manassas on the border between Woodbridge and Manassas so far away from either 95 or 66. It had a massive decline in values after the 2008 housing crash and was super slower to recover since then. But now the values are skyrocketing. And for good reason. There are large homes with large yards built in the last 15 years that are total bargains compared to what you get anywhere else in NOVA this close in. Plenty of room for multiple home offices. Good schools in this district. For those that need to go in once or twice a week there is the buses, VRE, etc.

I think the general price increase will stick. I think what has happen in the last month - the panic buys - will not. Just a guess.