The Virginia real estate agent’s guide to the state market as we enter 2020.
Virginia is currently experiencing a red hot sellers’ market!
The state economy is in solid shape, home values are up, and buyer demand is high. If you have your Virginia real estate license, you’ve been enjoying the market growth over the last several years, and you’re ready to continue growing your real estate business in 2020.
And if you’ve been considering getting your Virginia real estate license, now’s the time! 2020 could be the year you launch your new Virginia real estate career!
Whether you’ve been an agent for years or you’re just now thinking about getting licensed, you need to know what’s happening in the market. Here are the headlines for the Virginia real estate market going into 2020.
The Growing State Economy Continues to Strengthen the Housing Market
The biggest economic news in the state is the 2019 launch of Amazon “HQ2” in Arlington. With the jobs created by this new headquarters, there’s also an increased demand for housing throughout Arlington and Fairfax Counties. MarketWatch reported that Northern Virginia’s average home prices skyrocketed by 4.85% and homes were selling 31.6% faster compared to the year prior.
According to the Virginia Realtors® October 2019 Home Sales Report, 29,200 net jobs were added state-wide during the past year, and the unemployment rate dropped to just 2.4%!
The growing economy is rippling through the housing market for most of the state. According to the Zillow Home Value Index (which estimates the median value of all local homes, not just the sales prices of recently sold properties), home values in Virginia rose 4.7% during 2019 and are expected to grow by another 3.2% over the coming year.
For Virginia real estate agents, this growth means lots of opportunities to find new clients and close deals with higher commissions.
Low-Interest Rates Provide High Incentive for Buyers
Lower-than-expected inflation and uncertainty in the global economy have reduced interest rates from 4.94% in November 2019 to under 4% currently. And rates are expected to remain low through 2020. In fact, six of the leading housing authorities are all projecting interest rates on 30-year-fixed mortgages to remain under 4% for 2020.
This 1% drop means your buyers will save money on their mortgage interest, so they can afford to spend more on their home. Did you know that a 1% dip can add $30,000 to your client’s budget! As a Virginia real estate agent, you get to share this good news with your buyer clients and prospects. Make 2020 the year they finally make the leap to buying their new home.
High Demand + Low Inventory = Frustrated Buyers
Of course, it can’t all be good news. The main source of frustration with the Virginia real estate market is the low inventory. From October 2018 to October 2019, state housing inventory plummeted by 20%. And at this point, we have far more buyers than we have homes available for them to buy.
Now, this is great news for sellers and listing agents who are enjoying competing offers, quick sales, and even sales prices higher than listing prices. But for buyers who are ready, willing, and able to buy, not being able to find a suitable property is frustrating.
If you’re a Virginia real estate agent, it’s your responsibility to guide your buyers through this highly competitive market. Here are a few tips:
Make sure your buyers get pre-approved to assure sellers upfront that financing will not be a problem.
Advise your buyers to bring their highest and best offer price; this isn’t the time to “leave room for negotiation”.
Remind your buyers to avoid unnecessary contingencies that could give the sellers a reason to choose a more straight-forward offer from another buyer.
Stay in-the-know so you and your clients are among the first to learn about new listings on the market.
The Virginia real estate agents who are prepared to handle the low-inventory issue are the agents who will be in the best position to take full advantage of the hot Virginia real estate market!