A Tale of 2 Housing Markets

Hello Hampton Roads,

Housing, the need for shelter, a place to raise our families and a place to call home is such an integral part of our lives that it holds the interest of many people . It's no surpise that the housing market has been all over the news lately and depending on who you listen to, you'll hear different stories. 

So what's the real news vs the fake news? 

I'd say they are 2 sides of the same coin and depending on what role you are playing in the market, if you're a buyer or a seller will determine what you experience.  Before we get into the tale of 2 housing markets, it's important to understand both sides so that we not only understand where we are but where we could be going so you can be well prepared not matter what your real estate goals may be. 

Here's one side of the real estate market:

Yesterday, the 30 year fixed rate mortgage hit 5.25% which we haven't seen since 2009. To give a little more perspective on this rate increase, the beginning of 2022 saw rates in the 3% range.  Rising interest rates have priced out more than 9 million home buyers nationwide.  

Locally our MLS, put out the following infographic showing the state of the local market:

Inventory is down and median sales price is up in the market as a whole. (If you want to see a per city break down watch my video below this blog which shows which of the 7 cities show a decline.)

Sellers are getting above asking for homes priced at market value but not for over-priced homes. I have personally worked with home buyers in this market where appraised values came in low and the seller had to reduce the price in order to sell.  The moral of the story is that pricing has its limits and over priced homes never sell no matter the market. 

Here's the otherside of the real estate market:

The same market that priced out 9 million home buyers is also what is having a cooling affect on the market.  When you wipe out demand, there is automatically less competition and and less upward pressure on prices.   According to a recent Fannie Mae survey, home buyer pessimism is rising.

“If consumer pessimism toward homebuying conditions continues and the recent mortgage rate increases are sustained, then we expect to see an even greater cooling of the housing market than previously forecast,”  -Mark Palim, Fannie Mae Economist

Further more according to Redfin, price drops are increasing--while this is not common in our market, this is what is being seen in other areas of the country. 

So, what does this all mean?

For the time being, the local market is still strong. Many homes are selling over asking because buyers are still buying and there is limited inventory. 

Given the interest rate pressure and the further expected rate increases, the buyers who stay in the market may yet gain more negotiating power with less competition. For sellers, selling now is to your advantage --while there is still limited inventory.

If you have any questions and want to discuss your real estate plans and how to achieve them, schedule a free phone consultation here:

https://calendly.com/liz-schuyler

Thanks for Reading,

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Check out the video below to learn more about the Hampton Roads Real Estate Market in March 2022: