Is it just me, or does it seem like every headline that comes up on my newsfeed, the TV, Facebook, Business Journals, etc. seems to think that we are in some kind of economic downturn that we are never going to recover from and that there is nothing but doom and gloom taking place?
Okay good, it's not just me. And the housing market is not any different! I get asked pretty routinely "Is now a good time to sell or buy?" Yes, and yes. As someone who not only recently purchased and is always actively looking to purchase, I still stand behind the fact that if you can get into a home that is necessary for you to elevate from where you are right now, it is a great time do it!
The headlines are extremely confusing to interpret. So let's break them down and why I think they do not pertain to Richmond, VA.
Myth 1: We are in a Housing Recession: What even is a Housing Recession? The market as a whole goes into a recession but a housing recession is something that feels like it was kind of made up. This is the first sentence defining a housing recession when you google it: A housing recession is a decline in some specific metric related to home construction, home sales, or home prices.
A decline in a specific metric...I'm not buying it. We can pick and choose our specific metric anyway that we want to. Do not be scared by the headlines introducing ambiguous terms that make it seem worse than it actually is. I am sure there are certain aspects of real estate that are declining right now, but there are also other aspects that are increasing as well. Read on to see examples.
Myth 2: When rates go back down there will be less bidding wars and the housing market will be healthy again: What!? Rates going lower will introduce more competition into the market. Even when a majority of homeowners had an interest rate higher than 4 percent we were still dealing with low inventory. It's not magically going to increase with a rate drop in my opinion. Not to mention there are plenty of potential buyers sitting on the sidelines right now. Zillow did a study where a majority of buyers are waiting until rates drop below 5.5 % before they jump back into the market. We were quoted at 6.6 % over this past weekend and guess what, still not always winning the home in the bidding wars. My best advice is if you are able to weather the storm of a somewhat larger monthly payment for a year at these rates, then refinance when rates come back down within the next year or two, you will be in a better position than jumping into the massive bidding wars similar to what we saw from 2020-2022. Right now, bidding wars are between 3-5 people from what I am seeing in the Richmond market although there are some outliers. Back then there were situations with 20-40 offers!
Myth 3: Prices are declining (consult your market expert here, I can only vouch for Richmond, VA) The average sales price is up 4% in the Richmond, VA metro. That is pulling data from January of this year. That is not a decrease in price, that is an increase in price. As the cast in Selling Sunset routinely says this season, "the facts don't lie!"
So what is my advice for everyone right now? If you are trying to sell your home and you live in an area where homes move quickly, right now is an amazing time to sell. And if you are able to put that equity into a new home and are capable of making an aggressive offer to win the house, go for it. And when the rates drop you already own a house, you just get an opportunity to lower your monthly payment by refinancing.
If you are a first time home buyer or have been struggling to win a bidding war here are some great alternatives:
- Find a home that has been on the market for longer than a week. Most of the time the expectation that Realtors are setting with their sellers is that the home will sell week one. One, we cannot guarantee that no matter how hot the market is. However, if that does happen, the owners are more likely to let the home go for the listing price or in some cases a little lower than the asking price. This is a major win for buyers in this current market, and we have been able to pull it off!
- Find a home in need of a little TLC. If you see a home that might not have all the bells and whistles that you want, but it's listed at a great place in an area you have been searching for a home, you should seriously consider what it might take to make that house your version of perfect. Getting a home at a discount in a hot market that only needs new countertops or a renovated bathroom, or updated landscaping is an amazing way to get a home that everyone else just couldn't visualize the value add it might take to make it perfect. You could be the one that brings that vision to life!
- New Construction. I've said it once, I am going to say it a hundred more times. Most of the time purchasing New Construction there are no bidding wars, no surprises, and you pay what you expected to pay from the very start. This has been a great way for first time home buyers to enter this market, and you get something brand new! I am a huge advocate for this, and can always help guide you through the New Construction process.
These alternatives are less stressful, often times more successful, and allow you to easily get your foot in the door of the housing market, literally.
Back to answering the "is this a good time to buy or sell" question. My answer is that now is a great time to take advantage of a confusing market. While everyone else is sitting on the sidelines, you could be the one setting an example by making a move when everyone else might be afraid. As the great Tim Riggins said in 'Friday Night Lights', "It's when everyone that is scared starts running away from the sinking market that the true entrepreneurs come in, Billy. True visionaries."
Any questions about the current market in Richmond, Virginia? Please reach out! Call or text me at 804-418-5509 or shoot me a DM!
