Ask Ellie: Early signs of a market turnaround?

This regularly scheduled supporting Q&A column is written by Arlington-based Realtor and Arlington resident Ellie Tucker. Please post your queries to him through e-mail for his response to the previous columns. Video summaries of some articles can also be found on YouTube on the Ally Residential channel. Experience!

Question: Are there any indicators of a slowing market trend?

Resolution: As we know from previous columns, the second half of the year is no slower and more intense for consumers than the first half of the year. I think the second half of 2024 will bring another significant moment of recession than we expect (unless interest rates continue to rise to 1% or higher).

The cost has been quite high in this past

Despite lower long-term interest rates, home prices are typically 5-10% higher in 2024 due to lower supply and consumers’ acceptance of long-term prime interest rates. The higher prices were the result of ongoing competition among consumers and consumers reluctantly paying extra to get into an under-supplied housing market. If demand decreases and/or supply increases, due to fewer festivals, buyers will fortunately not pay equivalent to the prices we have negotiated in the first half of the year.

Under this, you will see a 5-10%+ year-over-year (YoY) increase in average and fair costs for Northern Virginia and the better-known DC department.

The untouched checklist number is finally trending

The Northern Virginia and Greater DC division has certainly begun a pattern of new record volume increases, increasing the number of listings coming on the market for two consecutive months and three of the last four months year-to-date. Will happen. The latest record year-on-year volume increases in both sectors in the last week were June 2021, which can also be chalked up to the record volumes of June/Spring 2020, which were extremely low in the months following the COVID outbreak and lockdowns .

The checklist is an important measure to implement volume because increasing volume should bring some stability back to the market, unless that volume is the result of a decline in interest rates, which could lead to an increase in demand.

providing energetic is trending

If we want to see additional stability for consumers, an increase in fresh record volumes needs to be coupled with an increase in active record supply as it shows that demand is lagging fresh supply, which is important for additional market stability.

We have had a significant increase in record numbers in 3 of the last 4 months, plus we have seen an increase in active record supply in each of the better DC departments in each of the last four months and in Northern Virginia in the last two months. Active record supply in the improved DC department has increased by only one alternate week in four consecutive months since 2016. In Northern Virginia, active record supply has increased for four consecutive months on only three occasions since 2016.

Months of providing 5 are similar to past highs

Months of Supply (MoS) is a better market indicator that combines supply and demand metrics into a single measurement. The upper MoS favors consumers and the lower MoS favors dealers. According to economists, a balanced market actually has about six MoS, although we don’t fall into any of those MoS here, except for a few small sub-markets (e.g. $2M+ houses).

MoS has been slowly expanding locally since exhausting 1-2 weeks of supply in early 2022 and is reading 1.3 MoS and 1.74 MoS for Northern Virginia and Greater DC Department of Energy in May 2024, respectively. We have the best readings. In a week (a little bit) from October 2019.

Presidential election sidelines conservatives

In addition to the usual seasonal second half slowdown and the market developments mentioned above, we’re also looking at a fraught presidential election cycle, no matter which side you’re on. It’s common for consumers to be cautious in the election months and take a wait-and-see approach, and I think we’ll enjoy another final version of that this year. The good news is that once the elections are over, things temporarily return to normal in the residential sector.

Expectations for 2024 and 2025

I want to be clear, it’s not that I’m suggesting we’re headed toward a significant market correction where consumers will get bonuses at dealers, although I think it’s probably a significant 5-10%. The gains in the first half of this year get erased in the second half (possibly 2-5%) as festivals fall, supplies tighten, and dealers become more eager to barter. Alternatively, we will still be able to significantly under-supply, and have a steady supply of demand for housing in our pocket which could keep the market buoyant despite my expectations for a change in market conditions.

Furthermore, I do not expect those conditions to end after 2024 and I think we will be able to get back to intense competition and meaningful expansion by January 2025, as we do in most cases.

Of course, if interest rates start to drop to around 6% or even lower, that could potentially induce a sufficient amount of demand to reverse the trend on months of active record supply and supply, with the first portion of the value being secured. The date also increases. by the end of the year.

If you would like to talk about purchasing, promotion, investing or renting, do not hesitate to contact me. (email protected),

If you’d like to answer a question for my weekly column or talk about buying, promoting, renting or investing, please send an email to (email protected), To read any of my used posts, visit the Discuss Weblog category of my website online EliResidential.com, Call me immediately at (703) 539-2529.

Video summaries of some articles can also be found on YouTube on the Ally Residential channel.

Eli Tucker is an Authorized Realtor in Virginia, Washington DC and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10CA.