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As our team makes the rounds to all the fun End of Summer and Start of Fall parties and events, countless friends and clients ask us our favorite question: “How's the market?” Well, pull up a chair, Friends, because there’s no snappy answer! Check out our take below, and if a move is in your future at all, let’s talk it out now so you are ready when the right home comes along! - jeanne, phil, meg, alex, annie, and christine |
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| Fall 2023 State of the Market |
| Perspective: Homebuyer sentiment is down, inventory is low and interest rates are high. While that paints an alarming picture of the state of the real estate market, if you dig deeper, the data actually tells a compelling story for buying and selling now. The Average 30-year Mortgage rate since 1971 is 7.7% (see Freddie Mac graph below.) While economists consistently agree that mortgage rates will likely decrease from today’s 7%+ because the Fed historically overcorrects when increasing rates to address inflation, we probably won’t see 2% or 3% again anytime soon. |
| | Pent-up Supply: Nationally, we have a 1.6M shortfall of homes. With roughly 1 million new households formed annually and a historical low level of new construction (lowest level since the 1940s), prices on average nationally will continue to rise. We've already seen @ 5% home appreciation this year. The expectation is that property prices will continue to steadily increase over the next decade. Many sellers are currently reluctant to sell because they have the “golden handcuffs” of their currently low mortgage rates and don’t want to take on a higher mortgage rate on the homes that they purchase. These folks are often would-be Buyers as well as Sellers (they gotta go somewhere when they sell, right?). So if rates drop slightly, they will feel liberated to purchase and will fold into the already saturated Buyer market. This will create even more demand, and fuel multiple offers and large home pricing increases. In this area, it is not unusual to see Buyers pay up to 20% above asking, all cash, and waive protective contingencies to beat out others in a competitive situation. That is $1.2 m for a $1m asking price! It seems crazy to have both pent-up supply and demand, but yet we do! Would-be Buyers sitting aside mourning the loss of the low rates will likely flood the market if/when rates tick back down slightly. Additionally, large cohorts of Millennials, the largest generation, are getting close to the median age for buying a first home, 34, which puts us at the beginning of the greatest wave of homebuyer demand that we’ve ever seen, and we will see historically high demand for the next decade! Heightened demand based on these demographics will increase competitiveness and sale prices for buyers. |
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| “Date the rate and marry the house.” We’ve said it before and we’ll say it again. Savvy Buyers are benefitting from buying at today’s lower purchase prices because they don’t have to compete as much for a home, and they are planning to refinance if/when future rates are lower. Sellers/developers are offering rate buy-downs to get Buyers into homes. Lenders are getting creative as well, offering options like mortgage programs with reduced up-front interest rates to keep your payments down. Buyers are pondering whether they'd rather try to get into their next long-time home now for a price that could be priced considerably less and have a higher monthly mortgage for a short amount of time, or have to potentially escalate their price above asking but potentially save 1 or 2% on the mortgage payments (if they can win the house, that is!) Be Ready! While transactions in the DMV are down an average of 30%, homes are still selling at a 4.4% YoY increase 2023 to 2022. Buyers that are ready to buy now are picking up gems for right around the asking price, with favorable terms because the market is more balanced than usual. If the right house isn’t there yet, get your ducks in a row PRONTO, because Buyers who are ready to move fast always do better than those that stumble upon the house of their dreams and then have to scramble to find a lender, get approved, figure out whether they need to sell to buy, move money around in accounts for down payments and renovations, update their current house in order to sell it, etc. Don’t let someone else scoop up your dream house! |
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| | Here's How Gen Z Can Become Home Owners |
| "My parents were in their 20s when they bought their first home. It was the 1950s, Midcentury Modern, (my mother’s favorite furniture style) was just modern, and the house, a Dutch colonial in Brooklyn with four bedrooms, one full bath and two half baths, cost them about $25,000. That would be about $285,000 today, adjusted for inflation." |
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| MoCo Recordation Tax Increase October 1, 2023 |
| The recordation tax premium for Montgomery County will increase from its current rate on all properties closing after Oct 1. The rates are projected to have no effect on the price of affordable housing and will raise $52 million more for rental assistance over fiscal years 2024 through 2028. Find more information here! |
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| Homes are our life, and our Team is passionate about helping those experiencing homelessness. Meg is a former board member of Everyone Home DC. Please join us in giving to Everyone Home DC's September Challenge to help our neighbors in crisis. No one can do everything, but everyone can do something! Click here to participate! |
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| | Put on your dirndl or lederhosen and head to The Wharf for free Oktoberfest festivities such as Polka Dancing, the Wiener 500 Dachshund Dash, and Stein Hoisting Competition. |
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| | Celebrating Books and Authors on Capitol Hill |
| From 11 a.m. to 3 p.m. on Sunday, September 17th celebrate the vibrant literary culture of Capitol Hill at D.C.’s historic Eastern Market! Meet some of your (and OUR!) favorite local authors of fiction, history, memoir, poetry, children’s literature, politics, mystery and more. Learn more here! |
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| Sign up now for A Literary Feast! Our JPM Team and Capitol Hill Community Foundation Board Member Jeanne are proud to co-sponsor "A Literary Feast" fundraiser, in-person for the 1st time since 2019, and sure to sell out!! Dozens of dinner parties will be held in homes across Capitol Hill, all on one evening and all for a great cause—funding the Foundation’s grants to our neighborhood schools. |
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| | | The JPM Annual Gingerbread party, a fun event for adults and kids alike, will be back at Red Bear Brewery this year on Sunday, Dec 3, 2023 from 1-4 pm. Mark your calendars now and keep an eye out for our email invitation! |
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| Lifestyle Tips and Tricks |
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| | On the House: How To Be Certain That You've Found The One |
| Shopping for a home isn’t all that different from looking for a partner: You scroll through tons of photos online, make mental checklists of must-haves, then try to imagine a connection that could last decades. Are you sufficiently in love to commit for the next 30 years of your life? |
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The Best Places to Live for the Weather |
| In these places, residents enjoy some of the best weather in the U.S. |
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| 'Ugliest House in America' Reveals the One Astonishing Upside to Buying a Homely Home |
| As you can imagine, buyers are not exactly lining up to purchase these dingy dives... |
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| To Our Buyer Clients: Ask us about our great upcoming listings - we might know of inventory that Sellers choose to market privately that matches your needs! |
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| | | 5 BD 4 BA 2750 SF $1,775,000 Listed by Denise Verburg, COMPASS |
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| | | 2 BD 1 BA 777 SF $665,000 |
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| | | 4 BD 3 BA 2009 SF $1,100,000 |
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| Check out these fun public collections we put together for you. Call us to discuss how we can help you find the home of your dreams! |
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| | The Jeanne Phil Meg Team at Compass jeannephilmeg@compass.com |
| jeanne harrison: (202) 841-7717 phil guire: (202) 255-8401 meg shapiro: (202) 329-4068 alex schindlbeck: (202) 699-0141 annie richardson: (202) 740-5084 christine o'reilly, team manager |
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Office: 212-913-9058 Compass Real Estate is a licensed real estate broker. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions. |
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