Wakeland Manor, Stephens City, VA Real Estate Market Report – 2017

Wakeland Manor, Stephens City, VA Real Estate Market Report – 2017

Wakeland Manor, Stephens City, VA is a unique neighborhood of old and new and different. It is made up of older homes from the early to late seventies and more recent construction. It also has a section of luxury townhouses that are spacious and attractive.

The townhouse area has its own playground, tennis courts and a basketball court. In the newer section of detached homes there is a swimming pool that is available to residents. The newer section also has a community center. There are few areas in the Winchester-Frederick County real estate market that match Wakeland Manor amenities.

Wakeland Manor, Stephens City, VA Real Estate Market: The good news

The Wakeland Manor real estate market has two markets running on parallel tracks. Wakeland Manor, Stephens City, VA Real Estate Market Report - 2017The townhouse complex constitutes one market and the detached homes covers the the other one. Even there, the older homes are a market unto themselves. When you look at the market as a whole, the average sale price for 2017 was $260,454. Remove the townhouses from that and the average sales price was $302,489. The townhouse average sales price for 2017 was $215,617.

There were 62 combined sales in 2017. The detached homes sales made up 32 of those sales. In the combined number, there were 4 distressed properties. Each parallel track had 2. In all areas of Wakeland Manor, the real estate recession of 2008 caused a substantial drop in home values.

The 2007 home average sales price was $299,280 compared to the $260,454 today. That is a 13% drop in value over that 10 year period, but that is in line with the broader Winchester-Frederick County, VA market. The average, market-wide, is still 12% below the 2007 market. When you consider that the overall market took a 37% hit in 2008-2009, the recovery is fighting its way back to the pre-recession values.

Wakeland Manor, Stephens City, VA Real Estate Market: Distressed Properties

The continuing improvement in the Wakeland Manor real estate market is also seen in the number of distressed properties. Distressed properties are short sales and foreclosures. Both types can hurt home values when the numbers are high. In 2013, the total number of distressed properties were 25% of total market sales in Wakeland Manor. When those sales, which tend to be lower, are factored into area property values, they tend to reduce property values on a broad scale.

The 2017 distressed property sales in Wakeland Manor were 6.5%. That is in line with the overall Winchester-Frederick County, VA real estate market. This is an area that has been showing signs of improvement since 2013. From 2010-2012, distressed properties averaged 30% in Wakeland Manor. From 2014-2017, distressed properties averaged 7.25%. That leaves 2013 as the last dismal month for distressed property sales. That’s a good sign of an improving neighborhood economy.

When you’re ready to buy or sell in Wakeland Manor, give Cornerstone Business Group, Inc. a call. We are your local real estate sales pros, and we’re here to help make some great happen.

 

 

 

 

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The cost of low housing inventory and rising interest rates.

The cost of low housing inventory and rising interest rates.

The real estate market, nationwide, has enjoyed the benefits of lower home prices coupled with lower interest rates for the past ten years. Unfortunately, that is about to come to an end. The costs of rising home prices, low housing inventory and rising interest rates are starting to impact housing across the country. There are a few areas throughout the country that are busting with inventory, but many areas with low inventory are presenting buyers with a conundrum.

When interest rates fell at the beginning of the 2008 recession, buyers were able to jump into the market and pick up great deals. There were plenty of foreclosures, and they were followed by short sales. Distressed properties presented buyers with great opportunities to get their dream home at a lower price, and lower interest rate which offered a lower mortgage payment. Even fair market prices were down because of the recession and the impact of distressed properties. As the economy has turned into a healthy economy again, those benefits are about to change.

The cost of low housing inventory and rising interest rates: Low Inventory and the psychological factors.

Low inventory can create a major problem. For instance, when there are 1,000 buyers and 200 houses available, tension forms in the market. Buyers get into multi-offer situations often causing them to pay more for a home than the list price, and creating a higher mortgage payment than they wanted when the search began. It’s stressful and can create anger, hurt feelings and often animosity among the parties involved.

The season may be partly responsible for some of the low inventory. Granted, it is Winter, and homes may sit a little longer during the colder months, but according a RealtyTrac study released in the Fall of 2015, January, February and December are three of the top five selling months nationwide. There may be other factors keeping some homes on the market.

Low housing inventory has a psychological impact on buyers. For instance:

  • Buyers get frustrated because they can’t find anything, and they quit looking.
  • Buyers get tired of racing out to see the latest listing only to find that it’s in terrible shape, in a less desirable neighborhood, or that it has three offers before they opened the door.
  • Buyers get irritated at the long process and fail to keep their financial data up to date, and then they don’t have the required documentation available when a deal comes along.
  • Buyers can get depressed and lose hope because they get outbid on deal after deal.
  • Buyers can’t find homes available in the area they wish to live.
  • Buyers adopt a “why-bother” attitude and continue to rent.

When things like this happen, fewer buyers are in the market and the homes that are available sit longer than normal. It gives the appearance that something is wrong in the local market, when in reality, it can be the psychological impact of low inventory on frustrated buyers.

The cost of low housing inventory and rising interest rates: Low inventory and higher interest rates

Add higher interest rates to low inventory and you have another major challenge for buyers and sellers. Sellers wishing to capitalize on low inventory are trapped when interest rates increase. Higher interest rates reduces a buyer’s buying power, and in turn, can cut the buyer pool. Lower buying power changes what a buyer looks at in the process. Let me show how this works. For the sake of simplicity, let’s say the buyer is not putting any money down and the buyer is working with a 3.92% interest rate. I’m also going to ignore the added cost of taxes and insurance. This will be a purely principal and interest scenario.

The buyer’s dilemma

  • A buyer has been pre-qualified for a loan with a mortgage payment of $946. That’s a perfect payment amount for the buyer. At the time of pre-qualification, the buyer was qualified to buy a $200,000 3 bedroom 2 bath detached home. In the process of working through low inventory, the buyer can’t find a good home in the $200K price range.
  • A month goes by and interest rates have increased to 4%. In order to keep the The cost of low housing inventory and rising interest rates.mortgage payment at the $946 range, the buyer’s buying power drops to $198,000. That’s not too bad, but it may be a little less of a house than the buyer wants.
  • Interest rates are on the rise and within two weeks, they are at 4.25%. Now the buying power is $192,500. Remember, inventory is low and there is a huge number of buyers for properties under $200,000. Competition increases as buying power drops.
  • Another frustrating month goes by with low inventory, and now interest rates are 4.75%. The buyer’s buying power has slipped to $181500. The volume of buyers has increased, but inventory has not. The flurry of contracts thrown at every listing make it nearly impossible to win a bid without forfeiting contingencies that would protect the buyer.
  • Finally, interest rates climb to 5% and the buyer’s buying power drops to $176000. Multi-offer wars are happening everywhere and buyers are buying homes they don’t want in neighborhoods they don’t like, but there is nothing else they can do if they want to own their own home.

This scenario played out before the market downturn in 2008. I’m not saying that we’re heading for another housing bubble, but even without the other issues that caused the last bubble to burst, we’re in a tricky place for buyers. The greatest struggle they have with low housing inventory and rising interest rates is buying power. The higher the rate, the lower the buying power.

The cost of low housing inventory and rising interest rates: Mortgage payments

Another issue that plagues buyers when interest rates increase is the mortgage payment. If our buyer is qualified to buy the $200,000 house at a higher interest rate, the buyer will also find that he has a higher mortgage payment as rates climb.

Our $200,000 buyer would love to keep the mortgage payment at $946, but as interest rates increase, his payment will also increase. The desirable $946 payment rises to $$999 if rates rise to 4.38% when he finally buys. If it goes as high as 5%, that same $200,000 home, will cost the buyer $1,074 a month. Waiting a few months increased the payment $128 a month, or $1536 a year.

The cost of low housing inventory and rising interest rates: Long-term costs of waiting.

In our scenario above, there is a hidden cost that buyers rarely think about. What is the long-term costs of waiting too long to buy a home as interest rates rise. Let’s go back to our $200,000 purchase at 3.92%. If the buyer stays in that home for 30 years, the long-term cost of the home will be $340,427 in principal and interest. Fortunately, a high percentage of buyers move every 5 years.

Most will never realize that cost, but let’s say our buyer does stay through the entire 30 years, and lets say the buyer was qualified to buy the house at $200,000, but interest rates climbed to 5% by the time of the purchase. That 1.08% climb will cost the buyer an extra $46,085 dollars over the life of the loan. When it is all said and done, he will have paid $386,512 for his $200,000 house. Also, his mortgage payment is no longer $946. It ends up being $1074.

The time-value of money has an adverse relationship with interest rates. When rates fall, buyers can buy more and when interest rates climb, buyers can buy less. During the lower rates of the past ten years, buyers could causally look for a home over several months and even years. Today, if a buyer sees a home he likes, that meets his needs and is in his price range, he better move on it. Three months from now, it may be out of his price range or not available.

When you’re ready to buy or sell, give Cornerstone Business Group, Inc., a call. We are your local real estate sales pros, and we’re here to help you make something great happen.

 

 

Canter Estates Subdivision in Stephens City, VA – Real Estate Review – 2017

Canter Estates Subdivision in Stephens City, VA – Real Estate Review – 2017

The Canter Estates subdivision in Stephens City, VA had a solid real estate market in 2017. Like many of its neighboring subdivisions, all the right numbers are up, and the unwanted numbers are down. That is consistent with the broader Frederick County, VA real estate market.

Canter Estates Subdivision in Stephens City, VA: Good numbers

The good numbers in the Canter Estate subdivision are price, distressed properties and Canter Estates Subdivision in Stephens City, VA - Real Estate Review - 2017days on the market. The average home sale in 2017 was $330,386. That is a 4% increase in sales price. Where the average sales price really shines is in the growth over the past five years. There is a 12% improvement in average sales price from 2013.

Each year since 2013, the average sales price has inched its way into positive territory. The average sale price in 2013 was $290,836, $301,240 in 2014, $311,423 in 2015 and $316,874 in 2016. Each year since 2012, an incremental change has taken place that has helped the Canter Estates subdivision regain its prominent place as one of the most desirable neighborhoods in Stephens City, VA.

Homeowners who purchased before the 2008 recession are finally seeing their value come back to near pre-recession values. There is still improvements to be made before the subdivision completely returns to those days of sometimes inflated values, but as of January 1, 2018, the average home sale price is still 10% below the 2007 market average. The local real estate market took a 37% hit with the market collapse in 2008.

Canter Estates Subdivision in Stephens City, VA: More good numbers

Distressed properties are a sign of a market in trouble. The 2017 distressed properties in the Canter Estates subdivision was 12.5%. That is higher than the local market average, but it may be more of an anomaly than a trend. It may also be the last heaving of the past market collapse.

The 2016 distressed number was 3%. That is a below average number. Also, in 2015 Canter Estates Subdivision in Stephens City, VA - Real Estate Review - 2017there were no distressed properties. But from 2014 backward gives a view where the market went during the downturn and where it is today. Those numbers were:

  • 2014 – 14.3%
  • 2013 – 20%
  • 2012 – 46%
  • 2011 – 33%
  • 2010 – 56%
  • 2009 – 30%.

In those numbers, you can see the wild ride the neighborhood had during the down days of the recession. The 12.5% number for 2017 is consistent with the whiplash nature of distressed property sales in the Canter Estates subdivision, but the overall market has made monumental improvements in the past five years, and this neighborhood is no different in those improvements.

Days on the market have been consistent over the past five years with only slight deviations along the way. The 2017 average was 35 days. That is two days above 2016, but here again, it is nominal. There is no changing trend to point to while trying to form an opinion of effect.

Overall, the Canter Estates subdivision is a highly desirable neighborhood with beautiful large homes of many styles. It is close to multiple highways which make it a great place for commuters to live. It is also a sprawling neighborhood with large yards, sidewalks for evening strolls and quick access to shopping, schools and parks.

When you’re ready to buy or sell in the Canter Estates subdivision, give Cornerstone Business Group, Inc. a call. We are your local real estate sales pros and we’re here to help you succeed.

If you enjoyed this post, you may also enjoy:

Oakdale Crossing, Raven Wing, Raven Point – 2017 Real Estate Review

Winchester-Frederick Co., VA Real Estate Market in Review – 2017

 

 

 

Oakdale Crossing, Raven Wing, Raven Point – 2017 Real Estate Review

Oakdale Crossing, Raven Wing, Raven Point – 2017 Real Estate Review

The Oakdale Crossing, Raven Wing and Raven Pointe neighborhoods had a good 2017 in real estate. All three neighborhoods show year over year improvement in sales numbers, distressed property sales and average sales price. They also show a drop in distressed properties (short sales and foreclosures). The five-year sales have increased over 32% from 2013, but the years between 2013 and 2017 were a roller coaster. In every area, these neighborhoods have been up and down.

Oakdale Crossing, Raven Wing, Raven Point: The ups and downs of the past 5 years.

In 2017, total sales for the three neighborhoods were 37. That was a 131% increaseOakdale Crossing, RavenWing, Raven Point - 2017 Real Estate Review over 2016. Ironically, 2016 saw a -40% drop in sales over 2015, but 2015 saw a 23% increase in sales over 2014. Finally, 2014 was down -21% over 2013, and 2013 was down -21% over 2012. The numbers could give you whiplash if you were a seller in these three neighborhoods.

In the current breakdown, Oakdale Crossing had 6 sales, Raven Wing had 17 sales and Raven Pointe had 14 sales. Raven Wing has consistently carried the most sales from 2013-2017. On average, Raven Wing has double-digit sales compared to its immediate neighbors. Raven Pointe rose to 14 in 2017, but it has been below 8 for the past five years. Oakdale Crossing is typically in single digits with 2017 being the highest in the past five years.

Oakdale Crossing, Raven Wing, Raven Point: What’s in a day

Oakdale Crossing, RavenWing, Raven Point - 2017 Real Estate ReviewAnother way to see how the market has improved over the past five years is to look at the days on the market. The average days on the market can be a very revealing number, or it can yield nothing of valuable to the understanding of a neighborhood’s health.

In these three neighborhoods, this is one number that tells the story of the roller coaster ride these neighborhoods have been on over the past five years. The market of 2013 was the first year where real change was noticeable after the down days of the 2008 recession. It was also the lowest days on the market of the past five years. The 2017 days on the market was the lowest since 2013. At 75 average days on the market, it was 15% below 2016, 13% below 2015, 61% below 2014, and 23% above 2013. Again, there was volatility, but these numbers show a market fighting to get back to a healthy norm.

Oakdale Crossing, Raven Wing, Raven Point: Price change

Price change, up or down, can also show a market’s health. The price change in these three neighborhoods has shown the same pattern as the numbers above. The 2013 average home sale was $377,721. That was 8.5% increase over 2012. In 2014, the average sale price was $404,864, but 2013 dropped to $391,483 and 2015 dropped even further at $377,517. The biggest price change happened in 2017. In 2017, the average home sale was $436,964. That is a 16% increase over 2013 and a 16% increase over 2016.

When the numbers are looked at from a distance, it truly has been a roller coaster ride for the past five years. The thing that separates 2017 from earlier years is that all numbers are up except days on the market. That one number is the least important because there are so many factors that can increase or decrease that number, and those factors may not be related to market health.

For instance, a home that is overpriced will take longer to sell. A home that is hard to show will take longer to sell. A home that is in poor condition will take longer and a home that is plain vanilla in a sea of banana splits may take longer to sell. There are so many factors that can lengthen days on the market that it becomes the lessor of the market health parameters.

When you’re ready to buy or sell in any of these three neighborhoods, give Mike Cooper at Cornerstone Business Group, Inc., a call. Mike and Cornerstone are your local real estate sales pros in Oakdale Crossing, Raven Wing and Raven Pointe.

You may also enjoy these previous reports on these neighborhoods and the local market. 

Oakdale Crossing is on the bright side of the economic recovery.

Winchester-Frederick Co., VA Real Estate Market in Review – 2017

Should I list my home in the Winter months?