2020-12 -- Real Estate of Northern Virginia Market Report - December 2020 Real Estate Trends - Michele Hudnall

|| NORTHERN VIRGINIA OVERVIEW NOVEMBER 2020
BUYER STRENGTH – INTEREST RATES, MORTGAGE ORIGINATION AND DOWN PAYMENTS
The external drivers indicating demand are the mortgage interest rates and the mortgage applications. Interest rates continue
decline and are now predicted to stay low over the next 4 years. Mortgage Originations are up 26% annually, while Refi
Originations are up 124% annually. The interesting metric is that Refi’s represent 74.8% of the Originations.
Homes at the lower end are rising fast with cash investors creating a challenging environment for first-time buyers. I believe
the story is the large portion of Refi Originations indicating investment into current homes instead of selling. The Refi indicates
a decision to reamain in place and thus will not be a reprieve to the current inventory constrained situation.
GROWTH IN BUYER COMMUNITY AND REQUIREMENTS
In a recent article on Mortgage News Daily, a survey was cited that almost 50% of all Americans are considering a move.
Motivation to consider the move is COVID-19 as they want to leave the cities and require more space.
They are considering the following:
27% are considering their current area
12% are considering a nearby city
8% are planning a relocation to another state
Outcomes they expect to achieve are:
44% expect to reduce expenses
27% are seeking larger space
27% are seeking different features in a home
12% want to change their location
The desire to make a move are fueled by the COVID virus putting
additional pressure on inventory demands along with their
current home equity and historically low interest rates. The
following chart is from the article citing desired features in
homes currently.
LARGEST BUYER COMMUNITY, FIRST TIME BUYERS - FIRST TIME BUYER CHARACTERISTICS
The market is a pure Demand versus Supply market favoring the Sellers currently and over the past 5 years. Even though the
market favors the Seller, it is important for Sellers to understand who their buyer is, their characteristics, requirements and
purchasing preferences.
Millennials are the largest buying force in the market
First-time buyers driving demand based on size and price
accordingly
Millennials are ready to grow their family
Millennials grew up leveraging technology and are using it at a
high level – photos, videos, and property presentation matter
regardless of it being a Sellers’ Market
Millennials seek move-in ready – not interested in inheriting
projects, again regardless of it being a Sellers’ Market
COVID has accelerated the decision to purchase
Remote working has added to the savings account
Serious Buyers expect competition, are creating a strategy,
preparing via online viewing and Coming Soon campaigns with
their professional agent along with added savings
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