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FISCAL POLICY, POLITICS AND WEATHER PATTERNS…

It’s an election year. An underlying concern over sequestration throughout the fourth quarter of 2013 never materialized. Our kids enjoyed sixteen “snow days” in the first quarter of 2014. Despite the “stuttering” start, the DC Metropolitan areais experiencing a transaction velocity well ahead of the same period last year and momentum continues to build.

Even as our economy improves, trends in the housing market on a national basis remain diverse. In parts of the US, it will take several more years to resolve distressed inventory. As a “pillar” of our economy, the housing sector will be supported by federal incentives until recovery is universal across the country.
Programs designed to revive distressed markets in other parts of the country will continue to benefit our market as well. Read more…

PURCHASING POWER / INTEREST RATE

How much you pay for a home often matters less than how you finance the purchase. As an example, the principal and interest payment for a $250,000 loan at 5.5% is $1,193 per month. If executed when the interest rate was 4% instead of 5.5%, the same payment would buy $47,000 more home.

When the national housing market shows any signs of slowing, economic policy makers lower rates to increase demand. If the market shows signs of becoming overheated, they raise rates. Despite the fact that the DC market is performing well, rates have come down to spur the national trend our windfall.

Today, rates are in the low four percent range and on some days, the high three’s. Economic forecasts call for rates to be at 5% by the beginning of 2015.
The opportunity to secure mortgage money at today’s rates is significant in the long term. If you are considering buying a home, now would be a good time to act! Read more…


INVENTORY

Any feeling of an inventory shortage should be tempered by reference to historical levels. Obviously, we endured a significant spike between 2005 and 2010; however, current levels are in line with our “normal” and the market today is healthy. With three to four months of supply, buyers enjoy a good selection of property. Sellers can expect to achieve fair market value and buyers should expect to pay the same. Read more…

 

SUSTAINABILITY

The reason the Washington DC MSA fares better than most in recessionary times is our healthy employment base. Each of our jurisdictions is forecast to enjoy robust job growth in the near and longer term. With more jobs comes the need for additional housing units.

The need for more housing creates more employment opportunities. Experts suggest that we will add over a million new positions between now and 2030. Read more…

REGIONAL ADVANTAGE

The Labor Force Participation Rate stands at 62.8 percent which matches a 35-year low. We will see sustained job creation initiatives nationally for the foreseeable future. What might be designed to spur job growth in a depressed metro will be applied equally to our MSA. Read more…

VALUE TREND

On average, home prices in our area almost doubled between 2002 and 2007. Looking back, it is obvious that trend was unsustainable and unhealthy. We were fortunate; it only took until 2009 for our values to bottom out. Since then, we’ve realized modest appreciation of about eight percent annually. Read more…

 

A WINDOW OF OPPORTUNITY

In response to a tentative fourth quarter and sometimes sluggish 2014, mortgage rates remain below what was forecast. Monetary policy is made to encourage sustainable growth in the housing sector. The downward spike in rate over the last thirty days reflects the underperformance of the sector over the last nine months. Read more…

BUYERS SIDE GROWTH

Low interest rates and affordable pricing have created steady growth in the number of property transfers annually. The 30 percent appreciation since 2009 has restored equity for many owners who are now considering local moves. Many who lost their homes to short sale or foreclosure are once again qualified to purchase. Read more…

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…our results demonstrate that. Don’t settle for less.

 

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