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May, in Northern Virginia, has typically been one of the most active months of the year for home sales. That is not true this year. Despite the best home affordability index in decades and historically low interest rates, buyers are just not buying. May sales are lower than they were in 2009 and much lower than they were in 2010 when the effects of the First Time Homebuyer’s Tax Credit could still be felt.
The charts below are based on housing statistics from the Northern Virginia Association of Realtors.
Active Listings and Homes Sold by month since January, 2006
May Active Listings
May Homes Sold
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Margie, do you think having sellers do a “pre-sale” upgrade or renovation would assist in sales? Or just a before and after design exercise to show potential buyers what a renovation might look like and cost? Is the 203K mortgage playing into sales in anyway in the region? Just trying to get a pulse check from someone who has more experience in this arena. Would love to hear your thoughts. Thanks, Kurt.
Hi Kurt, thanks for the comment! Statistics show that today’s buyer is looking for a home that is move-in ready with many of the upgrades/updates that today’s homeowner has come to expect. I am in the process of writing a new blog post that describes today’s buyer and what they are looking for. It should be up sometime this afternoon. From that standpoint, yes, pre-sale upgrades and renovations are almost a must. Paint, carpet, and updated baths will usually guarantee a quicker sale and the seller is usually able to recoup the investment–assuming they don’t go overboard. I have not seen the 203K mortgage coming into play with buyers as the majority of buyers do not want to deal with the hassle of major construction projects. I do see a lot of investors buying trashed foreclosures with all cash, putting a minimum amount in and then flipping or renting them out. I’m seeing more of them renting out lately because the rental market is so hot–great monthly income for an investor. Hope this helps!