The number of home sales (year over year) rose for the fourth consecutive month in November, while the number of homes on the market declined for the fifth month in a row. Pending sales (homes going under contract) rose for the eighth month in a row. We currently have an absorption rate (current inventory/monthly sales) of 7.6 months.
It’s still a buyers market, but it’s starting to turn.
I guess the question is, what’s going to happen now? December is usually a slow month in Northern Virginia real estate, but mortgage rates have been falling (around 5.6% right now). The government has been making noises about trying to push rates down to 4.5% to kick-start the residential home market – so are buyers waiting until they get that low? Is the market anticipating this? What if the government decides it will take too much money – will rates shoot up if it doesn’t happen?
My own seat-of-the-pants view is that most buyers are going to wait until after the holidays, but that January and February will be extremely active – and spring 2009 will see a buying spree. There are sellers aplenty (many not yet in the market) and buyers – in our area – who have been salivating for years but nervous.