The Northern Virginia Real Estate market continues to be very active. While numbers are still processing and posting, we have seen slow growth year over year through November. The Northern Virginia average sales prices are up 1.28% year over year. Most of the yearly gain was achieved during the first quarter of 2015. While the remaining quarters gave up earlier market gains. This was a huge opportunity for buyers looking to capitalize on historically low interest rates and motivated sellers willing to negotiate price and/or concessions to buyers.
Interest rates are on the rise. I anticipate that this slow increase may continue throughout 2016. Rates are up about .25% since the beginning of December when the Fed announced to raise the Federal Funds Rate. While this is not a huge change or shift in interest rates at this time, most consumers do not measure the impact a rate increase has on buying power while negotiating offers with Sellers or considering their next purchase. Most consumers still focus on price as their major purchasing guideline. If interest rates shift up another .25%, buyers will start to pull back on their price targets as they will see a significant swing upward in monthly payment expectations. I anticipate that the Northern Virginia Real Estate market will remain relatively flat with modest gains during the first two quarters. I predict that much of the first halves gains will be negated during the second half of 2016.
My recommendations to both buyer and sellers are engage early. First quarter is likely to be a great opportunity for good values and sales opportunities. Sellers looking to push the market significantly higher, will likely be disappointed. Sellers looking to sell who price their homes in line with current market values will likely be very successful. I believe this will be a very good year for step up buyers/sellers looking to upgrade their housing. First time buyer may face challenges as entry level housing prices increase and interest rates increase. Luxury buyers will have options and strong negotiating power as the Luxury market continues to be Buyer leaning.
As always, feel free to reach out to me to discuss your specific housing goals and situations. Looking forward to another wonderful year! Thanks for a great 2015!
Northern Virginia REALTOR®
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