What’s Happening in the D.C. Real Estate Market?

Because rates are so low and we have a historically low level of inventory, most of the greater D.C. area is in a seller’s market.
 

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We’re right in the middle of the fall market season now, which has thus far been very busy. It’s typical for the market to slow down once kids go back to school in August but then pick back up after Labor Day weekend, and we saw that again this year.

There was a lot of new inventory that hit the market, but we also saw a lot of buyers come back into the marketplace. A lot of that new inventory, then, was absorbed. What we’re left with now is a historically low level of inventory. We’re currently sitting at a three-month supply, and since a six-month supply is considered balanced, most of the greater D.C. area is in a seller’s market.

As you go a little bit further out, you’ll a see a little softening in areas like Potomac, Great Falls, Vienna, and even as far as Reston. This is indicative of the price points that are prevalent in those areas. Anything under $750,000 or even $800,000 is still extremely popular given that interest rates are still so low. That kind of borrowing power is forceful, and you’re seeing a lot of people step up their bases a little bit to get that property. We’ve also seen some softening in the more expensive markets between the $1.3 million and $1.4 million price points. Because interest rates are so low, many lenders have offered some really great jumbo loan packages, and these are starting to help the even more expensive markets between the $1.6 million and $1.8 million price points.

We’re seeing a historically low level of inventory.

If you’re a buyer, it’s a great time to be out there looking, particularly to lock in on something while the rates are so low. The next Fed meeting is happening in December, and they are expected to raise interest rates, so it might be a good idea to protect yourself from what could be a one-quarter to a half percentage point rate increase.

If you’re a seller and you’re looking to downsize, now is a great time to do that as well. There are a lot of buyers out there, and because of the interest rates, you’ll likely be able to find that higher price point you’re looking for.

If you have any further questions about the D.C. real estate market, feel free to give me a call or send me an email. I would be happy to assist you in any way I can.

Improvements with the Best Return on Investment

If you’re a seller with $40,000 to spend on home renovations, there are many other home improvements you should consider making besides a kitchen or bathroom renovation.
 

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How do you get the best return on your investment for home improvements? What should you really be spending your money on?

The best improvements you can make from a purely ROI perspective are minor kitchen and bathroom improvements. These typically return over 100%. There are other repairs, too, that will usually return over 80%, including windows, roofs, and HVAC systems.

If you’re a seller and have $30,000 or $40,000 you plan to spend on a kitchen or bathroom renovation, though, stop and consider the items that you really need to be spending your money on. Imagine what a buyer is going to look at when they look at your home. When I go through homes today, I see too many properties where owners have renovated the kitchens and bathrooms but have neglected more obvious repairs that should have been made instead.

For example, if you have a double layer of shingles on your roof, then that roof probably needs to be replaced. If your gutter system is draining into the foundation, you should consider getting a new system, adding extensions to your leaders, and installing a sump pump into your basement so it doesn’t get musty.

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Consider the items you really need to be spending your money on.

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You could also have single-pane windows that are leaking. These are upgrades that are not only great for resale, but they improve your finances by both eliminating future deferred maintenance and reducing your electric bill by increasing your home’s energy efficiency.

The worst-case scenario for me is having to see buyers “spend good money after bad,” meaning they’ve bought a house that’s been recently renovated with bottom-line products and materials. With Home Depot and other home improvement companies having their own websites, it’s not hard for people in today’s market to distinguish between what’s quality and what’s not quality. They get stuck, then, having to make improvements to something they’re already paying a premium for because the seller considered their materials to be top-quality before they sold. 

If you’ve recently purchased a house or are thinking about selling yours, please feel free to reach out to me so that I can provide you with a consultation on what’s really going to give you the most bang for your buck. Just give me a call or send me an email, and I’d be happy to help.