Northern Virginia Real Estate Market Update – 8 Tips for Home Sellers in 2023
The real estate market in Northern Virginia is going through some changes. What are the eight most important pieces of information that sellers need to know about what’s going on?
1. The Reasons Behind and the Repercussions of the Market Shift
A brief overview of what has transpired over the previous few years: after the pandemic broke out in 2020, the real estate market in Northern Virginia and the rest of the country was in a condition of extreme uncertainty for the first two or three months.
However, within the first two to three months, the market began exploding in growth, and it did not begin to slow down until very recently. Because of the decrease in interest rates that took place in the year 2020, a large number of buyers entered the market, and as a result, we witnessed a seller’s market in Northern Virginia that was virtually unparalleled. We witnessed buyers literally waiving any and all contingencies, and the sale price of every house was at least fifty thousand or one hundred thousand dollars higher than the stated price. It was a fantastic moment for those who sold things.
The Northern Virginia real estate market, on the other hand, has begun to undergo significant shifts as a direct result of the climbing interest rates. In order to put this into context in relation to what buyers and sellers are going through right now, let’s take a look at an example concerning the amount of a mortgage. A few months ago, when interest rates were still at historically low levels, a buyer who obtained a mortgage for a sum of $500,000 would have been looking at a payment of approximately $2,000 per month on that $500,000 mortgage. Due to the huge increase in interest rates that have occurred over the course of the past several months, the monthly payment for a mortgage of that amount would be approximately $2,900. For the majority of homebuyers, this is a very significant factor. Bear in mind that a buyer’s market has not magically appeared overnight or anything like that. Technically speaking, with the levels of inventory being where they are right now, even though inventory has picked up in a lot of areas, they are still fairly low, which means that technically speaking, on paper, it is still a seller’s market right now. This is the case despite the fact that inventory has picked up in a lot of areas. Simply put, the market favors sellers in a manner that is not quite as frenetic as it was a few months ago
2. You Cannot Continue to Get Away With Overcharging Like You Did in the Past Few Months.
A house seller in Northern Virginia was able to get away with overpricing their single-family home, townhome, or condominium during the recent real estate boom that the region has seen over the past couple of years. They may look at the recent comparable sales price and find that it was more than the previous comparable sales and yet know that they would likely be involved in a bidding war (just due to the supply and demand). This is no longer the case with the market. It is critical to have accurate pricing and to adjust that pricing in accordance with the change that is taking place.
The bottom of the market is not falling out or anything like that, but rather many sellers are pricing according to what they thought would be this never-ending stair-step effect that has been happening in the market from 2020 into 2022. This is one of the reasons why you are seeing so many price reductions right now. They are basing their pricing off of these recent comparable sales that took place in the months of May and June. Because we are no longer in that market, vendors who have set their prices excessively high are being forced to lower their prices in order to stay one step ahead of the declining demand from purchasers. The market is not moving toward being more favorable to purchasers. It’s just getting back to normal at this point.
3. In the current real estate market in Northern Virginia, the condition of the property is more important than it was even just a few months ago.
During the real estate market boom in Northern Virginia from 2020 and early 2020, many sellers didn’t bother to update their properties because they were able to sell an outdated property (or fixer-upper) and still do very very well and still often have a bidding war on their hands. This allowed them to make more money off of the sale of the property. It is true that overpriced properties are remaining on the market for longer periods of time as a result of the shift that is taking place right now; however, properties that require work, such as properties that are out of date or properties that need to be renovated, are also more susceptible to the market as it exists right now. It is absolutely essential to set a fair price for a piece of real estate, especially if it is not entirely ready to be moved into. To boil it all down, in the present real estate market in Northern Virginia, the houses that are selling the quickest and for the highest prices are move-in ready or remodeled residences that have been made to appear fantastic. In this market, we are still witnessing a healthy amount of competitive bidding situations for properties of this sort.
4. The staging of an event is more important than it has ever been
Many individuals are unaware of the benefits that come with having their property professionally staged. Permit me to phrase it in this way: When they come into a home, many prospective purchasers just lack the creativity necessary to visualise how they would use the space. It is helpful to have a property that has been staged because it allows potential buyers to better imagine where they would put their furnishings and how they would live in the space. When you stage a home for sale, it makes it easier for potential buyers to emotionally invest in the property. The staging of a home does not necessarily need to consist of a fully staged home; rather, it can consist of accent pieces and various objects placed around the property, with the exception of perhaps a few (two or three) primary living spaces that are well arranged. Keep in mind that in the present real estate market in Northern Virginia, every little bit helps, especially when it comes to helping your property stand out from the other properties on the market.
5. Providing an Attractive Commission Structure for Buyer’s Agents
We began to witness decreased buyer agent commissions during the boom that began in 2020 and continued into the early part of 2022. Right now, a commission for a buyer’s agent often falls somewhere in the range of 2.5% to 2.75%. During the boom that lasted from 2020 to 2022, there were certain sellers who began offering exceptionally low buyer agent commissions in the MLS (between 2% and 2.25%). Sometimes, they were able to get away with it due to the glaring disparity between the number of potential purchasers and the number of houses that were actually on the market. However, in this ever-changing real estate market in Northern Virginia, it is very crucial to give a good buyer’s agent commission in order to differentiate your property from the other options available. You should provide all of the buyer agents who are showing your house to their buyer clients as many available incentives, as buyer agents are a very crucial part of the process of selling a home, and you want to make sure that you offer all of the feasible incentives.
6. Collaborate with a real estate agent in Northern Virginia who is aware of the most efficient methods of marketing
In this volatile market, it is essential to get the attention of as many people as possible to your property if you want it to stand out from the other offerings on the market. It is essential to collaborate with a real estate agent who is familiar with the ins and outs of effective online marketing, including pay-per-click commercials, ads on social media platforms, organic traffic generated by search engines, and blogging.
7. There are still fierce competitions for bids out there.
There is still a good chance that your home in Northern Virginia will sell as part of a competitive bidding process; however, the competitive bidding processes that are taking place right now appear to be quite different from the competitive bidding processes that were taking place in the years 2020-2022. However, the number of conditions that have been waived is significantly lower than it was in the years 2020-2022. A buyer in today’s real estate market in Northern Virginia may very well mainly just involve making some changes to the sales price they are offering, and possibly waiving a contingency or two, but not waiving everything if there is a bidding war. This could very well be the case in the event that it happens. We are still witnessing bidding battles, but these days, the bidding wars are significantly different and are most frequently taking place around residences that are entirely ready to be moved into (remodeled, look nice, very attractive to buyers).
8. Sellers: It’s likely that you’ll have to agree to accept conditions attached to offers.
Bear in mind that the vast majority of purchasers out there will still be able to have the majority or all of their contingencies satisfied in the event that they make an offer. Many people who are selling their homes right now are taken aback by the fact that they might be required to sign a contract that has certain stipulations in it, such as a regular home inspection stipulation that entails discussion. Following the results of the home inspection, a buyer in the present real estate market in Northern Virginia can frequently bargain for monetary credits or for the completion of repairs. During the height of the boom that occurred during the past few years, that did not occur at all. Keep in mind that sellers are still getting wonderful prices for their houses; it’s just that the dynamic has evolved somewhat, and buyers now have more power than they did even just a few months ago when they were in the driver’s seat in the real estate market.
