April Market Watch for Northern Virginia Real Estate
The April market watch for Northern Virginia shows prices returning to the plateau levels of 2004 so let’s get a better perspective on what this really means.
Consider ascending a mountain either by foot or by car. The climb can be exhilarating with incredible views from the peak. But, at some point, it’s time to come back down from the peak to a lower plateau. In other words, back to a more ‘normal’ view of the world.
Such has been the residential real estate market for the last five years. In Northern Virginia, we reached the top of the peak at the beginning of 2006. And now, after a steady downward hike, we are back to a ‘normal’ view of home prices.
The latest Case-Shiller Home Price Index for Northern Virginia shows that home prices have dropped 31% since the 2006 peak. As distressing as that statistic may be, the same report shows that home prices have returned to March 2004 levels- a time when real estate was very much on a solid plateau.
It is important to remember that the sharp 41% increase in prices between March 2004 and September 2005 was due to a very low inventory of homes for sale. With more inventory, prices drop, much like descending the mountain. So again, a drop to 2004 price levels is more like getting back to normal.
Another aspect of housing that is getting back to normal is the mortgage lending qualification process. Concerns about lower qualification ratios and higher down payments that were ignored are being watched closely.
We now understand that returning to previous reasonable standards is prudent. With a return to these standards, historically low interest rates are making today’s mortgages even better than usual.
To check housing inventory in your area, please click on the cities below:
A recent Gallup poll found that 71% of Americans think now is a good time to buy a house. If now is the right time for you or anyone you know, please call me at 703.927.4554 and let’s get started on finding your house.
I’m at your service,