The Winchester, VA real estate market started to see a slowdown in July2014. The number of sold properties were down to 117. That’s a 36% drop from June 2014. By comparison, June saw 183 sold properties. It’s also a 16% drop from July 2013 sales.
The good news is that distressed properties have not seen an increase month to month. June and July 2014 foreclosures and short sales were 12%. That’s a 43% drop from the same period in 2013.
At the end of the third week of August sales have been 83 which is slightly above the July sales performance. July saw 67 sales at the end of the first three weeks. So, what’s the cause of the slowdown? Theories abound, but if you can remember that we live in a micro and macro economy you may be able to answer that question.
The threat of an end to quantitative easing has increased concern over an interest rate increase in both the stock market and the real estate market. Buyers who were excited about buying at 3.75% interest are not as excited about buying at 4.50% interest. It’s only a .75% increase in interest, but it’s a $100 a month increase on a $300000 home. For the budget conscious buyer that’s $1200 less in the family budget.
The increase in inventory has also given buyers a respite from the panicked “buy it now before somebody else does” mindset that hit the local market in the Spring of 2013. With 796 available properties on the Winchester / Frederick County real estate market, buyers have time. That doesn’t translate into time for every property, but it does equate to more options.
Also, more homeowners are in a better position than they were after the real estate market collapse in 2008. Many are vacillating between remodeling or moving. Would an updated kitchen, master suite, finished basement, etc., make their current home more valuable to the market and more valuable to them? If it met their needs, would they seek a new home, or would it be easier to just stay and invest in their current property?
You can see that many factors enter into a market’s health. The overall health of the economy is still in question, and uncertainty can create fear, confusion and indecision. When buyers finally realized that the economy was in serious trouble in 2010 sales dropped 12% year over year. They dropped another percent the following year and finally started to see some encouragement in 2012 with a 4% increase.
Another factor associated with an uncertain economy is an election year. This is a large House and Senate election year and anything can happen. Some buyers may be waiting out the election. In that case, the Fall will finally tell us where we’re headed.
Winchester, VA Real Estate Market – July 2014