By Carla Olivo, Director of Strategic Communications
Will this be the year you stop renting and decide to purchase a home? It is truly one of the largest purchases you will ever make and buying a house when you know the military could move you at any time can be a gamble. But thousands of military families roll the dice each year and come out with an excellent investment. Purchasing, given the right circumstances, can be a great alternative to base housing or renting.
Moving to Virginia – The NOVA HOUSING MARKET
One of the keys to making a smart choice for your family is knowing the local real estate market. Many service members stationed at the Pentagon, Fort Belvoir, Andrews AFB, or Bolling AFB choose to live in Northern Virginia (NOVA). NOVA is known for traffic backups, excellent schools, and a relatively low crime rate.
IS NOW A GOOD TIME TO BUY?
The general consensus is the current NOVA/DC market remains highly competitive. Kate Christofides, a PCSgrades ‘A-Graded’ Realtor® says, “Folks are predicting that in almost every major city, D.C. included, it is a good time to buy as the value of real estate has surpassed that of your stock portfolio, silver/gold, checking or savings accounts, etc.”
Four rate hikes last year have made some a bit nervous about buying property. Predictions of interest rates on the 30-year fixed-rate mortgage rising to 5%, and the rate for a 15-year fixed-rate mortgage going to 4.4% by year’s end make buying early in the year very attractive.
Suzi Welch, another ‘A-Graded’ Realtor® says, “Luckily, while interest rates have moved up, they have not risen nearly as much as anticipated. So buyers still have strong buying power.”
IS IT A BUYER’S MARKET OR A SELLER’S MARKET?
Last year’s historic low inventory of homes in NOVA drove home prices upward. The trend toward a hot seller’s market in Northern Virginia real estate continues in 2019, especially for homes priced under 500K in Fairfax and Prince William counties. A mild winter could kick start the buying season as early as January/February. Low supply and high demand are always good for sellers.
It is not uncommon to see multiple offers on homes priced reasonably. But Welch says, “Never fear buyers! The right agent knows how to negotiate in order to make sure your offer wins. So you get the home of your dreams, even in a tight market.”
STATUS OF INVENTORY
Inventory in NOVA remains tight as it has for the last several years. This keeps home prices moving upward. Our ‘A-Graded’ realtors agree inventory will increase slightly at the beginning of 2019 but will remain relatively tight overall throughout the year.
AFFORDABLE HOMES – MEDIAN SALE PRICES
Sticker shock is very common for those moving here. The Northern Virginia Association of Realtors (NVAR) reports the median sales price as of November 2018 was $510,000, more than $200,000 higher than the national average. Additionally, according to NVAR, median home prices were up more than 2% over the 12-month period from November 2017 to 2018. Average days on the market was up 22% over the last year. “What this tells us is that buyers are still buying and still willing to pay top dollar,” says Welch. “But they’re being a little more cautious and taking their time when it comes to choosing a home.”
Median sale prices do vary throughout Northern Virginia, D.C. and even southern Maryland. A PCSgrades ‘A-Graded’ Realtor® can help you to decide which area will best fit your lifestyle and budget.
WHAT IS THE COMPETITION LIKE?
Northern Virginia real estate remains hugely competitive. Homes up for sale in Fairfax County continue to go fast as rates continue to rise. Welch says, “Late winter is actually a really great time to buy or list your home in this region. Oftentimes people think of the “spring market” as being the busiest time in real estate, which is also true.”
There is an 8-week window from mid-January to mid-March when sellers are listing, but potential buyers are not yet buying. Welch says that window is a good time to make an offer because, while there still may be some competition, “it will be significantly less than what we typically see in the April-June time frame.”
OPTIONS FOR RENTERS Moving to Virginia
Single family home, townhome or condo rentals in Northern Virginia are abundant, especially considering the high number of transient folks (military, government, college/university students, etc.) Zillow reports the median rent price in Fairfax County is $2,250 which is slightly higher than Washington D.C.
Welch says, “It’s important to point out that rent prices in this area are some of the highest in the country. This is why it’s essential to consider all your options, such as buying vs. renting, before choosing the path that’s right for you.” She adds from a landlord/investor perspective, NOVA “is a great area to own rental property.” The rental market is expected to get even stronger when the new AMAZON HQ2 arrives.
LEASE BARGAINING POWER
In such a highly competitive market, there is not a lot of lease bargaining power. Local landlords do appreciate military and veteran renters, so typical incentives can include waived processing fees, a free month of rent, or perhaps a free parking space.
AVAILABILITY OF NEW CONSTRUCTION
New construction is currently down nationwide, which definitely applies to the Northern Virginia real estate market. “We are seeing some new construction,” Welch says. “But it is typically in the higher priced areas, and the vast majority of new builds are townhomes.”
ADVICE FOR FIRST-TIME BUYERS
The basics for first-time buyers include, after determining how much house they can afford, checking their credit standing and saving for a down payment. The process of purchasing a home requires an in-depth knowledge of the real estate market. An ability not only to write an incredible offer, but to negotiate with listing agents to make sure that offer wins, is a must. Let your Realtor walk you through the entire process. Communicate clearly about what you are looking for. Getting pre-approved before you start your house hunt is also recommended as is pausing any new credit activity and exploring your down payment options. “There are many things that take place between contract and closing (including lending, home inspection, and appraisal) for which you will want your Realtor right by your side,” says Welch.
IS IT EASY TO RESELL IN A FEW YEARS?
While the average homeowner lives in their home for 7-10 years, most agree, military families should have no problem re-selling their NOVA home in the next 2-3 years.
“As long as homes are priced right and in good condition, it’s been doable to sell in a few years,” says Welch. Christofides agrees, “If you purchase in a desirable area [with] good schools, location to metro, etc., yes, you will not lose value.”
A two or three-year tour in the National Capital Region can be an exciting assignment for many. While the cost of living is much higher than many other duty stations, with the right Realtor helping you, you can find an affordable, safe place to live in NOVA.
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Carla Olivo has garnered numerous TV industry awards including the Associated Press award for Spot News Reporting, and Documentary Reporting. She lives in Northern Virginia with her husband, a retired USMC Lt. Colonel and their two children.Carla Olivo