Shops are adorned with holiday trimmings, but much like the shelves at Bloomingdales, the real estate market will launch into “pre-spring” mode shortly after the first of the year.
Trending this coming season: 1.) sellers who are looking to leverage a housing inventory crunch; 2.) savvy buyers who are prepared to shop in this market; 3.) housing supply demonstrating a slight uptick. Don’t get me wrong – demand will almost certainly still outpace supply this coming spring, but I don’t believe that we should be expecting the same ferocious bidding that occurred last year.
Through last season, homeowners were fearful that they could not recoup their investments. So, homeowners sat on or rented their homes. But when headlines finally started turning from doom and gloom to “it’s 2006 again,” sellers slowly began to gain confidence and release their inventory into the market. Eager buyers paid a premium due to the low inventory in their desired urban neighborhoods and sellers took full advantage with vicious bidding wars.
This time around, sellers should manage their expectations carefully. There still are a myriad of opportunities to capitalize on wise investments in real estate this season, but buyers in the market will punish sellers who overplay their hands on pricing and negotiations.
Wise purchasers should still be prepared to waive appraisal contingencies, present financing scenarios where most of the loose ends already are tied up, plunk down substantial earnest money deposits and to settle on the seller’s schedule. But the days of free rent-backs for sellers and the “I’ll do absolutely nothing on the inspection so don’t bother” may be out of style.
Buyers still will have to move quickly to lock down desirable properties. When homes are priced correctly and presented properly they will swiftly sashay on and off the runway. I expect prices to increase this year, albeit not by the 11 percent year-over-year that we saw from 2012 to 2013. But don’t hold out for a deal too long, these low mortgage rates will disappear when consumer confidence increases enough for the Fed to raise rates. That means the house that you had the assets to fill out in size 4 percent may not fit as well in size 6. Trends come and go, but a smart investment in Washington real estate is a classic.
Sammy Dweck with Evers & Co. Real Estate, Inc. is a licensed real estate agent specializing in townhouse, condo and co-op sales in the D.C. metro area. Reach him at Sammy@SammyDweck.com or 202-716-0400.