There is no doubt the intensity of bidding wars in Northern VA real estate over the past two years made many potential buyers put the home search on hold? If that was you or someone you know, it’s now the time to get back in the market. I am sure you already know the hyper competitive market has cooled with the climbing interest rates and as buyer demand has moderated and housing supply has grown. Those two factors combined mean you may see less competition from other buyers.

With less competition comes more opportunity to strike up a better deal for buyers. Here are two trends that may be the news you need to reenter the market. *****The “But” is coming!!

1. Contingencies Return

Since 2020 more buyers were willing to skip important steps in the homebuying process because of the lov inventory and high competition. Buyers would drop all contingencies like the appraisal or the inspection, in hopes of gaining an advantage in a bidding war.  But now with much higher interest rates, things are different.

National Association of Realtors (NAR) Consumer Confidence report in October shows the percentage of buyers waiving their home inspections quickly receding. This more recent article from realtor.com points out more sellers are accepting contingencies:

“A year ago, sellers were calling all the shots and buyers were launching legendary bidding wars, waiving contingencies, and paying for homes in cash. But now, the shoe is on the other foot, and 92% of home sellers are accepting some buyer-friendly terms (frequently related to home inspections, financing, or appraisals), . . .”

BUT ………. This doesn’t mean we’re in a buyers’ market in Northern VA, however it does mean you have a bit more leverage when it comes time to negotiate with a home seller. The days of feeling like you may need to waive all contingencies or pay drastically over asking price to get your offer considered may be coming to a close. This of course depends on the specific house, and the reason you need an experienced agent on your side.

2. Sellers Open To Help With Buyer Closing Costs

In the past it was a common negotiation tactic for sellers in Northern VA to cover some of the buyer’s closing costs. This didn’t happen as much during the peak buyer frenzy over the past two years.

We are seeing this make a comeback in the market. A realtor.com survey shows 32% of sellers paid some or all of their buyer’s closing costs. This may be a negotiation tool you’ll see as you go to purchase a home. Just keep in mind, limits on closing cost credits are set by your lender and can vary by loan type. Work closely with your loan advisor to understand how much a seller can contribute to closing costs in your area.

And The But…….

As you know, the interest rates increasing and the overall slowing economy, we may or may not be headed into a recession. This has not and will not caused the Northern VA real estate market to enter into a 2008 style crash, not even close. Instead of homes selling in 48 hours, they are selling in 48 days. By historical definition, this is still a sellers market. Inventory is continued to remain slow, jobs are still coming to DMV, and the demand for homes is still very strong. This is the time to buy before interest rates go down at the end of this year! Here is a recent article I wrote about expected drop in interest rates at the end of 2023.

Bottom Line

Despite the extremely competitive housing market of the past several years, today’s real estate market offers more negotiation room. However, the Northern VA hosing inventory is still low and buyer demand is still out there, just a but hesitant. This is an excellent time to find a house with little or no competition. To find out how you can leverage this to your benefit, let’s connect today.