We had 40% more listings for sale in April 2014 vs. April 2013. (493 vs. 350) I think this is huge! We had 15% less “under contracts” than a year before. So what does this mean? I am not exactly sure yet, but what I am seeing – the supply is up and the demand is down – so the market might be slowing down. Here are some more Arlington real estate statistics for April, 2014:
Arlington is experiencing a very hot real estate market. Not all properties are hot, but some are really hot. Most buyers want the what I call “cream puffs” – properties in a great location, with a good layout, in move-in condition. Those properties are flying off the shelves with multiple offers. If you would like to increase your odds of buying one of those properties – here is what you have to do:
1. Move fast – as soon as the property is o the market – go and see it right away. Don’t wait for the open house, because there might not be one – as it could be “under contract” by then. Once you see the house and you love it – you have to make an offer right away. I know some sellers set a deadline for offer, but you can still make an offer and put a an expiration time.
2. If you make an offer before the open house – you have to make a really good one – probably above asking price. Most sellers believe in open houses and will rarely consider an offer below asking price. So if you really want the house – you have to be BOLD. Make an offer they will worry about loosing.
3. What makes a great offer:
- Price – a full price at a minimum.
- Large Earnest Money Deposit – think BOLD – like 25k, 50k, even 100k. This deposit shows how serious you are – it goes towards your closing costs and down payment at the end, but if you decide to cancel the deal before closing – you will be at risk of loosing it. A minimum should be 2% of sales price.
- Settlement date convenient for the seller. If the seller needs rent-back after settlement – ask for a security deposit, but consider giving them free rent-back.
- As few contingencies as possible: Can you remove financing contingency? Some lenders can give you a full approval subject to title work – this way you can wave financing contingency. Can you remove appraisal contingency? This one is a tough one to wave – what if the appraisal comes in low and you have to cover the difference? Can you wave home inspection? This one is a tough one – you could get an inspection before submitting an offer to make sure there is nothing majorly wrong, you could get ages of all systems in the house, you could budget a certain amount of money for potential inspection repairs. Old homes tent to have more issues – so don’t be reckless, but you can make a calculated risk. Can you wave radon inspection? You can get a radon test after settlement and if there is elevated radon reading – you can have a remediation system installed for $800-$1,5000 – a small investment in the big scheme of things.
- If there is another offer on the table you will have to use an escalation clause. The escalation clause lets you increase your offer price by a certain increment above the next highest offer. You do set a limit of the highest price you are willing to offer. The questions is always – how much should I offer? We usually don’t know what the competition is offering, but I always tell my clients to think this way: If this property goes for $1 above this price – I don’t want this house any more. The seller does not have to honor the escalation clause and they can just counter at the highest price you offer – so there is risk in playing this game with your cards wide open, but the seller is in the driving seat and you can always say no.
- If your offer has a financing contingency – you will need a strong lender’s letter. Pick someone local, someone who is known and reputable. Internet lender’s letter won’t do you any good. You can change your lender once the contract is ratified.
These are the main steps in putting your best foot forward. You have to go item by items and see what you are willing to offer and give up and want you are not. If you do less than your best – you will have to live with many “what ifs”. So do it right. And if you do get the house you love – make sure to live there for a while, because real estate values goes up and down and in a few years your home might come down in value and it will go back up again. Regardless of the ups and downs you will live in a house that you love – and that’s living a good life.
If you are a buyer you might be wondering if this market is crazy or what?! Are you hearing multiple offers?Escalations? And on and on and on? Well, the market is a little crazy, but not as crazy as you think and not everyone is getting multiple offers. If you want a “cream puff” property that is perfectly located with a decent layout and in a lower price range – yes – you will have to fight for it, but there are plenty of homes that are not selling the 1st weekend.
So what’s happening? Here are the Arlington real estate statistics for February, 2014.
Inventory – the number of houses that are available for sale – is low. The last 5 year average for active listings is 449, in February there were 377 active listings – that’s 16% less than average.
Number of homes that went under contract (current demand) is 184. Last 5 year average is 201 for Arlington. So that’s a little less than average – I wonder if it has something to do with the freezing cold winter we’ve been having.
The number of new listings is about the same as usual – about 254 (5 year average is 264).
So the law of supply and demand – supply is lower, demand is about the same – expect for the prices togo up!
From the 4 listings that I put on the market this year in Arlington – I did not have multiple offers on a single one of them. Yes – 1 of them did sell in 2 days above list price, but the buyers weren’t snoozing and waiting for the open house – they made an irresistible offer to my client. Others got great offers in a week or two.
The prices are definitely heading up and don’t expect to pay yesterday’s prices – especially in a hot spring market. If you are looking for a single family home under a million in North Arlington – you really need to roll up your sleeves. A lot of buyers are out trying to buy something before the interest rates go up. If you are a seller – this is a great time to sell.
I welcome your feedback on the market – I definitely am not out there selling every home in Arlington and might not know about a certain market segment that’s absolutely crazy – would love to hear about this.
Here are the statistics from out local MLS that I was referring to:
1. The inventory is WAY WAY better. Last January buyers had 260 homes to pick from. This January buyers had 336 homes to pick from – that’s almost 30% more. I know some of you who have been waiting for a 2 bedroom 2 bathroom condo at the Clarendon 1021 – this might not seem true, but the market seems more balanced than last year.
2. Average days on the market went from 60 to 45 – which is a 25% improvement. If you like the house – don’t wait around too long or you will miss the opportunity.
The rest of the statistics is very similar – number of sold homes, homes that are under contract, average sales price, median sales price. If you’d like to see all the statistics in detail – click here.
I know a lot of buyers – especially in lower price ranges that are waiting for some new listings – hang in there – March and April should bring some more opportunities. Just make sure you get your loan approval ready so you can jump on something quickly.
Arlington real estate market is steadily going up. Increase in interest rates has definitely made an impact and slowed things down, but the high demand for housing in Arlington is keeping the prices going up. Homes and condos near Orange line metro experienced the largest increase, but some condos in south Arlington are still struggling and have not reached the price levels of the last real estate boom.
The statistics below I calculated myself from the history of sales in MLS – so there is definitely some room for error, but the trends are definitely obvious.
Arlington Residential Real Estate Statistics:
*The average sales price of $600.309 in Arlington was up 3% from the previous year.
*The dollar volume of homes sales in Arlington for 2013 was $1,574,012,179, about the same as last year.
*Average days it took to sell a property in Arlington in 2013 was 22 – which is almost twice shorter than last year.
Here is a chart for Arlington Residential Sales History:
Real Estate is very local – if you’d like a sales history of your own neighborhood – please shoot me an email and I will send it to you – no obligation. I hope for another great year!