Post 1

Posted on: July 10th, 2011 by Richard

This is one of a series of blogs about my experiences and opinions as a licensed real estate agent in Maryland, Virginia and Washington DC. Views expressed here are my own and do not reflect that of anyone else!

“How is the real estate market going?”

One of the most commonly asked questions I am asked is, “How is the real estate market going?” That answer depends of course on whether one is a buyer or seller (or landlord or renter for that matter). Although the current environment is definitely a buyers’ market, I don’t think it is nearly as pronounced as it was a year or two ago. Of course, the level of activity seems to vary significantly almost on a week to week basis sometimes. Around March of this year I noticed a significant uptick in the number of potential buyers I was coming across as well as increased interest in my listings. I checked with some of my colleagues and most of them reported the same thing. The economic news, although not great, was encouraging and it seemed that finally we could see the light at the end of the tunnel. Interest rates were rising, which I have long thought would be a good leading indicator or more economic activity. People seemed to want to make sure they didn’t miss this historic confluence of low prices, big inventory and low mortgage rates.

Fast-forward three months to June and activity seems to have come to a sudden stop. I thought maybe it was just my own efforts that have gone unrewarded, but I checked with other agents as well as title companies (a lagging indicator of real estate activity) and mortgage lenders (a leading indicator). The title companies told me most of their recent activity has come from distressed property sales (mostly foreclosures). More alarmingly, my banker friends say the number of new mortgage applications has almost dried up.

So what has happened? I think that the spate of negative reports on the economy has sapped consumer confidence. In my opinion, that is the key to the drop in activity. Couple that with the low and stable interest mortgage rates, and the average consumer is on the sideline waiting for the other shoe to drop.

So what should you do? Well, I have always been a contrarian so the answer is obvious to me. If your financial situation is stable, now is the time to get the best deals in terms of home price and mortgage costs. Weigh your options, look carefully at your personal situation and I think the answer will come to you!

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