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ArlingtonNewsRealtor Q&A: How high can local home prices go?

Realtor Q&A: How high can local home prices go?

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Home values keep on rising in Northern Virginia, but nothing lasts forever. The Sun Gazette checked in with some top local real-estate professionals to get their take on when, or if, the region might hit an upper limit.
Here are their views:

David Howell, McEnearney Associates: “We’re not at the upper limit of this market. We continue to have incredibly low inventory and very high demand, and that is the classic scenario for rising prices. Part of the issue with low supply is that there are homeowners who would like to move, but they are concerned about finding their next house in this hot market. So they are staying put. But markets seek balance over time, and this won’t last forever. Prices will rise to levels that will dampen demand, and more sellers will be comfortable putting their homes on the market. This shift will be gradual, though, and I think we’re looking at tight market conditions through at least the third quarter of this year.”

Barbara Lewis, Washington Fine Properties: “All indications are that the robust market will continue, as we still have a shortage of homes and an abundance of local buyers. If the economists are not certain in their predictions, neither am I. It is a great market for sellers. We have a lot of people relocating to our area and that is also putting pressure on the real-estate market. We do not see signs that the demand for homes is lessening.”

Jack Shafran, Yeonas and Shafran Real Estate: “I don’t think we have seen the peak, and I don’t see the demand being satisfied for a while. There is too much demand for each sale and I see that for the rest of the year at least. If there is a rise in interest rates, that might cause the market to hesitate. Bad economic news or something bad happening nationally could cause the market to fall and people to hesitate buying.”


Eli Tucker, Eli Residential Group: “I think that prices for single-family homes and townhouses are nearing their limits for the next two or three years, and appreciation will slow or remain relatively stable after this summer. This will be particularly true if interest rates continue slowly increasing and life returns to normal by this fall, which will lead to people spending more on entertainment and travel, leaving less for down payments.”

Archie Harders, Long & Foster: “I think the market has not yet peaked, as folks still have the school year to consider. They are, therefore, imagining a closing date after the summer vacation begins. And rates are still low enough to attract condo buyers to that section of the market.”
Dawn Wilson, TTR Sotheby’s International: “I think the upper limit is still coming. Right now we have a considerable shortage of homes. Interest rates are still extremely low. The pandemic has caused many to shift to working at home, and people have wanted more space to do that and have also wanted homes with outdoor space. Even when the pandemic is over, there will be more people who continue to work from home. I also see an increase in interest for people in this area wanting to buy homes on or near the water, including second homes. As long as interest rates remain low and there are people who benefit from the economy and the stock market, the buyer demand in this geographic area will continue to be high.”

Casey Samson, Samson Properties: “Low interest rates, lack of inventory and a migration to the suburbs caused this run up. Prices will peak when rates head back up, or heavy inventory hits the market from those who have to sell in 2021, had to sell in 2020 but couldn’t, and want to sell because of higher values. The market will return to a balanced market and prices will level or recede. Inventory is the key.”

Carol Temple, Caldwell Banker: “The upper limit has not been reached. I believe that some prospective buyers are experiencing “fear of missing out” fueled by rising interest rates coupled with low inventory. Battling to secure a property can result in emotional upheaval, and properties quickly going under contract and then reverting back to active status signal buyer’s remorse. Even so, the reality is that there is always another buyer ready to step in and buy.”

Rob Ferguson, Re/Max Allegiance: “My experience has been that we are seeing a lot of closings that have happened at the end of March that showed the strength of the market and prices that keep pushing higher. Through early April there are continued multiple-offer situations with prices well exceeding the asking price. The slight uptick of the interest rates has not slowed buyer activity, and even with a potential increase in inventory, new buyers continue to enter the market at a faster pace compared to new inventory. So it appears the price increase will continue based on the lack of supply and increasing demand.”

Betsy Twigg, McEnearney Associates: “I don’t mean to be snarky about it, but who the hell knows? I can’t predict anything. If somebody has a profound answer, good for them.”

Dean Yeonas, Yeonas and Shafran Real Estate: “I’m finding it’s a pretty scary time. We are in unknown territory. There is an acute inventory shortage, but it seems like the rest of this year will continue this way, unless there is some kind of external event that changes things. Fundamentally, people can’t be paying what they are for houses right now.”

Karen Briscoe, Huckaby, Briscoe, Conroy Realty Group, Keller Williams: “I think we could still be at the beginning of a cycle where the peak doesn’t hit for several more years. It has too much steam to slow down right now, with a high number of Millennials wanting to buy homes. Many Millennials have been accelerated into adulthood. They had been living the urban lifestyle. Now they want to buy homes and seniors and Baby Boomers are unlikely to leave their homes. So there is no inventory.”

Dee Murphy, Compass: “The market is still on the climb and I believe this will continue through spring and summer. We are already seeing more listings for buyers to choose from, and we will slowly return to a normal market where supply meets demand. Although prices have increased by 10 to 12 percent over the past 18 months, this increase is less dramatic when looking at home prices over the past decade. One lasting effect from this pandemic is that people view and use their homes in a different way than ever before. As we place more value on what home means, this will naturally equate to more valuable homes.”

Lilian Jorgenson, Long & Foster: “As long as there is next to no inventory, I think we will keep seeing buyers fight to get the house. However, future warnings of increasing taxes and higher interest rates may just slow the excitement to buy.”

Laurie Mensing, Long & Foster: “This market is continuing to surprise me every day. Agents are needing to continue to be vigilant and creative in order to win contracts. I believe the soaring is not yet over, but we all know the bubble will pop eventually. When? Most likely with a world event that could cause market volatility, failing consumer confidence, or a huge spike in interest rates. The upper limit will continue to be driven by consumer demand; and the consumer is still demanding and willing to pay for it. I suspect the demand and upper limits will continue into the fall of 2021.”

Mark Middendorf, Long & Foster: “The inventory for single-family homes is so, so low, with so many buyers out there and so many contracts on each home. A lot of buyers are losing out. I think it will take a while for the market to correct and level itself. Interest rates will creep up. But in this area, there is so much money, a quarter of a percentage point will not make or break someone. Plus, there are so many other factors other than low inventory and interest rates effecting the market, like COVID, the vaccine, the going back to school, the economy.”

Jean Beatty, McEnearney Associates: “Housing prices are going to continue to go up, at least for a little while longer. Currently, we are seeing a trend where agents are getting multiple offers on their listings because the home buying field is very competitive. My latest listing went on the market on a Thursday, and by Tuesday had 10 different offers. It is important to keep in mind that people are still looking for quality in their home purchase. If you are expecting to not do anything to your house, that will be reflected by a lower sales price and fewer interested buyers. The housing demand will remain strong probably through June. Contracts will then be set to settle throughout July and August, which is when you will see the peak prices for the year. I think home prices will flatten out as we finish out 2021.”

Diane Lewis, Washington Fine Properties: “We still have very low inventory and a lot of buyers, so all signs indicate the market will continue to stay strong. It is a great market for sellers, and we are not seeing any signs of it slowing down.”

Joan Stansfield, Keller Williams: “We understand that the upper limit has not yet been reached and that prices are forecast to increase even higher this year – some believe as high as six to 10 percent. No, the market has not yet peaked. However, the predictions are that as interest rates slowly rise and inventory increases, prices will level off.”

Carol Ellickson, TTR Sotheby’s International: “In my world, I do not see signs of the market letting up. There are still more buyers than inventory. I have seen as many as 26 offers on a home my clients lost. Despite close communication with the listing agent, the seller decides. Buyers may be getting weary, but with persistence, my buyers are getting homes. Sometimes they are looking at more creative ways to win the sellers’ attention.”

Marybeth Fraser, Keller Williams: “Even with mortgage interest rates creeping up, they are still historically low, fueling more home-buying power. Buyer demand far outstrips our housing supply, meaning that at current buyer demand all homes available on the market will be sold in two months. Realtor.com states a balanced market should have six to seven months of inventory. We don’t see the data pointing to the market having peaked. The escalating pricing will most likely continue for the next year or two, or until the macroeconomic picture changes.”

Joy Deevy, Compass: “When the pandemic began, we had no idea how the real-estate market would fare. To my surprise, we have had a real estate year like that of 2005, when inventory was at an all-time low and buyer demand outpaced the inventory. Even with the recent increase in interest rates, the market has slowed only a very tiny bit. I don’t see the buyer pool shrinking until more sellers put their home on the market. The reason that sellers are not going on the market is that they are afraid they won’t find something they will want to move into. Until sellers get confident that they will find something they will want to buy, our market may continue to be a seller’s market.”

Natalie Roy, Keller Williams: “When COVID appeared, no one had any idea what the future would bring. For the real estate community, there was a ton of expected anxiety about how the pandemic would impact the market. Fast-forward to 2021, and real estate is thriving and that is an understatement. Low interest rates and historically low inventory have translated into a strong seller’s market. Have we reached the peak in terms of prices? The jury is still out. But I do not see anything changing in the immediate future.”

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