Low housing inventory. What changes it?

Low housing inventory. What changes it?

Low housing inventory. What changes it? The simple answer is to add more houses to the inventory, but the real answer might be more complicated. The housing market is cyclical. The market shifts from a seller’s market to a buyer’s market and once in a while a market will be in balance, but that is rare.

Low housing inventory. What changes it? – Seller’s Market

When more buyers are in the market than sellers, the housing market is a seller’s Low housing inventory. What changes it?market. Seller’s have more opportunity to generate higher sales prices. Good to great homes that hit the market are quickly gobbled up and they often receive multiple offers. Many times, those offers can exceed the list price.

Buyers will forgo some contingencies to improve their chances of obtaining the property. It may be as simple as not doing a home inspection or not asking for closing cost help. The cleaner the contract, the more likely a buyer will gain an advantage over other would-be buyers. Of course, cash is often king, but not always. Shortening the time of closing is another way frantic buyers may win a multi-bid real estate purchase.

Low housing inventory. What changes it? – Buyer’s Market

Supply and demand influence both seller’s markets and buyer’s markets. When there are more sellers than buyers, buyers have an advantage. In this case, buyers may be able to get a discount on a property. They may be able to ask for closing cost help, and home inspection repairs. During a previous buyer’s market, I asked for the seller’s motorcycle, which he agreed to give me if I bought his house. That’s just how crazy it can get in a buyer’s market.

Some home inspection repairs may be expensive, but in a buyer’s market, they may be the only way to make things happen. In a sale I did a few years ago, my Seller offered $20,000 for a roof replacement. We were in the throes of the recession and buyers for high-end properties were few and far between. The only way to close the deal, was to offer that repair. It was a buyer’s market and buyers could ask for just about anything and get it.

Low housing inventory. What changes it? – The Circular Dilemma

Low housing inventory creates a circular dilemma. Sellers who want to sell may stay put because there is no place for them to move to. Buyers can’t buy houses that are not on the market, and sellers can’t sell if there is nowhere for them to go. It’s a vicious circle.

The Winchester-Frederick County, VA housing inventory has reached a historic low at 270 presently built homes. As I’ve talked to other colleagues, they have stated that their work load has slowed because there are no houses for their buyers to buy. With a market that thrives in the 500-600 available homes range, 270 is incredibly low. So, what changes low inventory.

Low housing inventory. What changes it? – What Changes Low Inventory

There are multiple things that help pull a market out of low inventory.

  1. Lower interest rates. When interest rates are low, people can afford to buy, but as interest rates rise, some buyers are priced out of the market. In a convoluted way, the Federal Reserve controls interest rates, and as long as there is low inflation and low employment, the rates will stay low. But, the rates can’t stay low forever. Low interest rates help home-buyers, but they hurt bond holders and pension funds. Sooner or later, the rates will have to move up, but the FED has held the line on increases, though there are rumblings of rate hikes.
  2. Consumer confidence is another step out of low inventory. When consumers are confident in the economy, they are more likely to buy or sell a home. Consumer confidence is now at a 17 year high. That bodes well for the real estate market. The seasonally low inventory may be bolstered in the new year by the growing consumer confidence. When consumers are feeling good about the economy, they spend money. The recent GOP tax cuts may fuel that even further in 2018, and that could lead to a housing boom.
  3. Low unemployment. The current unemployment numbers stand at 4.1%. That is the lowest unemployment rate in the United States since February 2001. The workforce is growing, and that fuels consumer confidence, the tax base and that puts more cash in the economy. As more people go back to work, their ability to buy a home increases.
  4. Increase in new construction. Buyers can’t wait forever to buy a home, and neither can sellers, but with new home construction at a new high, homes coming on the market may give sellers confidence to get out there and look for new home so they can place their current home on the market. New home construction took an unexpected jump in November. Sadly, housing starts tend to lag demand. That is now contributing to the housing shortage, but it is not a long-term issue. When construction begins to catch up with demand, the market may shift to the buyer’s favor.

The solution for low inventory is more complicated than simply adding more houses to the market. It’s a nationwide issue that takes time to reconcile, but with a little patience, it will correct itself, and in the coming year, the real estate market may hit a new boom. As long as the economy can sustain its current trajectory, 2018 may be the best year for real estate since 2007.

When you’re ready to list your home, or you’re ready to buy a new home, give the Cornerstone Business Group, Inc., a call. We are your local real estate sales pros, and we’ll put economic and construction experience to work for you to make your experience a dream come true.


Should I list my home in the Winter months?

Should I list my home in the Winter months?

Should I list my home in the Winter months? Absolutely! There is a mistaken idea that homes sell better in warmer months, but there is plenty of evidence that homes sell at anytime, but Winter has some advantages that other months may not have.

Realtytrac’s longitudinal study of when is the best time to buy a home found that October is the best month followed by February, July, December and January. Four out of five of the top months are Fall or Winter months. The best day of the week to buy a home is Monday, and October 8th is the best day of the year. That one study blows a huge hole in the “Spring is the best time to list” theory.

Should I list my home in the Winter months? Why?: Inventory is lower

For one, inventory tends to be lower in the cold months. That gives a seller more Should I list my home in the Winter months?visibility because competition is lower. The current Winchester-Frederick County, VA market only has 270 previously owned homes on the market. The market typically has 500-600. The current inventory makes great homes fly off the market.

Think about what low inventory means to a home seller. When the competition is lower, a home seller has more opportunity to make a greater profit on a home sale. Buyers will pay more for a home they fall in love with when there are fewer homes to compare it to. Low inventory, means higher sale prices and quicker sales.

Should I list my home in the Winter months? Why?: Fewer showings

Buyers tend to look at fewer homes in the Winter months. It’s dark early. It can be cold outside (depending on your market). There are fewer homes in their criteria list. Our company has more buyers who buy the first home they see in the Winter months. Why? Because buyers have done their homework before looking at homes. When the inventory is up and the sun is up and the curiosity of buyers is up, they will shop and shop and shop.

In the Summer, a buyer may look at a dozen homes before settling on a home to make an offer on. In the Winter, the process is much faster and the buyer moves more quickly. Therefore, a seller will have fewer people passing through the listed home.

Should I list my home in the Winter months? Why?: Curb appeal is curbed (a little)

If you have kept your yard and home in good shape throughout the year, the Winter months may give you a bit of a respite from all the exterior maintenance. You’re not mowing (again, depending on your market) as much, if any. You’re not trimming hedges as much. Once any leaves are off the lawn, you are pretty well set for the season.

Should I list my home in the Winter months? Why?: Holiday fare may be a plus (but not always)

There is something endearing about a beautifully decorated home during the Winter months. When a buyer comes into a home that is welcoming and cozy, there is a sense of ease and comfort that comes with that. A warm environment, accent lighting, tasteful decorations and a sense of comfort gives buyers the ability to see themselves living in the home.

Don’t be afraid of a Winter listing. The general school of thought is that Spring is the time to list because it’s warmer, it’s lighter longer and more homes are coming on the market. All of those things are true, but the competition is also greater, and with an increase in inventory, there will be a far more showings and more competitive bidding on home prices. Winter has advantages over these issues.

There are many more reasons to list your Virginia or West Virginia home in the cooler months, but you get the idea. Every season has some advantages, and Winter is no different. When you’re ready to sell your Virginia home, give Cornerstone Business Group, Inc., a call. We are your local real estate sales pros.



What to look for before a home inspection on your listed home: Electrical 2

What to look for before a home inspection on your listed home: Electrical 2

It can be very helpful to have a home inspection before listing your home. That way, you know what a home inspector is likely to point out when a buyer puts a contract on your home. There are some areas where home inspectors will focus their attention when going through your home, and one of the most critical ones is the electrical system.

A buyer may panic if he/she receives a home inspection report with electrical issues. My electrical company does a lot of electrical repairs on home inspection reports. Most of the time, the buyers are in a near panic that their potential new home is going to burn down while everyone is sleeping. The reality is, most home inspection electrical issues are not that dangerous, but regardless, they should not be there. In the earlier blog on this topic, I discussed other electrical issues that show up on many home inspection reports.

Home Inspection Electrical Issues: Kitchen Counters

The kitchen is a prime area for electrical issues. Ground fault receptacle placement has What to look for before a home inspection on your listed home: Electrical 2been increasing in homes since 1971. In 1987, any receptacle within 6 feet of a sink had to be ground fault protected. Over the years, that has increased to any receptacle on a counter-top.

A home built in 1970, did not have the same requirements. It is always good to have anything on the counter-top protected, and most inspectors are going to point that out even if the home is a pre-1971 home, but when of the construction was 1970 or before, GFI receptacles were not required on the counter-top. If a receptacle has been replaced from 1971 to the current time, it would need to be replaced with a GFI.

Home Inspection Electrical Issues: Sub-panels

Sub-panels are another home inspection item that is often cited in reports. Sub-panels are smaller electrical panels that are used to increase the capacity of circuits beyond the main panel. Often, a sub-panel is installed in an area where more wiring is being installed. It facilitates the new wiring without going all the way back to the main panel.

Sub-panels are also used in basements, detached garages or anywhere where more circuits are needed and it is more cost-effective to install a sub-panel and not run each feeder back to the main panel. Sub-panels will also show up next to a main panel when the primary electrical need is simply more breaker capacity than the main panel can accommodate.

Sub-panel breakers are exactly like main panel breakers. The only real difference in a sub-panel and a main panel is that there is no main breaker, and the ground wires (bare copper) and neutral wires (white) are separated to their own bars. Neutral wires are not bonded to the box itself. They are tied to a neutral bar that runs back to the main panel. The ground wires on the other hand, are tied to a ground bar and the sub-panel box and they also run back to the main panel.

Sub-panel basics

Without getting to heady and causing your eyes to glaze over, a neutral wire is used to return current back to the main panel. If the ground is tied to the same neutral bar, it will also be carry current (amperage) back to the main panel. It is amperage that kills, not voltage. I’ve been shocked with 20,000 volts before, but it was very low current. Therefore, it stung, but it didn’t harm me. If the neutral and ground wires are tied together in a sub-panel, anything that is grounded, such as, a refrigerator, a freezer or any motor, etc., can be energized and shock you.

What to look for before a home inspection on your listed home: Electrical 2The wires are separated to give voltage a safe and unrestricted path back to the main panel. This happens when an unqualified person installs a sub-panel and the individual violates the rule and creates a shock hazard. Home inspectors will point this out in their report. You’ll see language such as, grounds and neutrals need to be separated in the sub-panel” in the report. This is another reason to have a qualified electrician do any work on a home.

Issues can be resolved quickly and most often, inexpensively. It’s better to have them resolved before listing. That way, a buyer does not panic about other potential electrical problems.

When you’re ready to list your Winchester-Frederick County, VA home, give Cornerstone Business Group, Inc., a call. We are your local real estate sales pros, and we are also Virginia State contractors. We can preview your home before you list to see what needs to be addressed. That way, you can escape a lot of home inspection repairs before a contract ratification.


Don’t be afraid to attend home inspections.

Don’t be afraid to attend home inspections.

As a real estate broker, I attend all home inspections. I’ve had so many real estate agents tell me they’re afraid to attend them. Why? Some don’t like to attend them because they don’t feel like a competent source if clients ask them a question. The best way to learn what a house is made of is by seeing it from an inspector’s point of view. Even then, you’ll want to look the property over with your own fresh set of eyes.

I have a bit of an advantage with home inspections because I’m also a Virginia state contractor with over 40 years experience in the trade. My electrical contracting company is in the field every week fixing home inspection issues. Today, was one of those days.

Home inspections: Pointing out issues

One of the frustrations I have with home inspections, is the tendency for some inspectors to swallow a camel and choke at a gnat. In other words, I see home inspection reports that call things problems when there is nothing wrong at all. The worst of those mistakes are when inspectors point out electrical issues. Area Realtors email home inspection reports to me weekly looking for guidance and second opinions and estimates of what repairs would cost. In those reports, about 40% of all electrical issues cited are in error. That’s a lot.

Today, my contracting company went out and addressed the problems cited in a report, but we didn’t fix the problem cited, we fixed the real problem immediately above the cited problem. Not only did the inspector miss the real problem, but he categorized a problem as a safety hazard while completely missing the real fire hazard within millimeters of his cited problem.

Home inspections: Missing the real issues

In this panel box, the inspector pointed out rust at the bottom of the electrical panel. His report stated that it was a safety hazard because you could stick your fingers through the rust and get electrocuted. He was wrong on both counts. The rust was surface rust, and you would have to have 10′ long banana fingers to get to the buss bars to get shocked.

Ironically, just above the rusty panel bottom was an entire side of the panel that was at the point of catching fire. The electrical meter box connector on the top of the meter had gotten old, hardened and had started to allow water to seep into the meter. The water would drip down through the internal center of the meter and follow the ground wire from the meter into the sheathing of the service feeder. It was inside the insulated conductor, so it was invisible from outside of the sheathing.

Where it showed up as a problem was in the main electrical panel. The water was traveling down the ground wire onto the connections down the right side of the panel box. Every breaker including the right main lug on the panel main breaker had heated up, cooled down by the water, heated again and melted the insulation on the conductors and in the process, had weakened every breaker on the right side of the panel. That was a genuine safety hazard, not a little surface rust on the bottom of the panel.

Home Inspections: Ask questions

Don’t be afraid to ask questions, insert opinions and seek clarity before an inspector writes his report that could torpedo a deal for no real reason. This panel box today was actually dangerous.  All of the inspectors I use know I’m going to be there, and they know I’m going to be looking over their shoulder. If they miss something that is wrong, I’ll point it out. If they point out something that is right, I’ll question their concern. Your presence is important. Don’t be afraid to attend home inspections. Missing them can be worse.