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Reston Real Estate and Covid-19

The Coronavirus pandemic has affected everything comprising life as we know it, and the Northern Virginia real estate market, including the Reston area, is no exception. However, a strong economy and low interest rates have coupled to leave the real estate market more resilient than expected.

“It took about two weeks for realtors to get their bearings and get used to the new normal,” says Ryan Conrad, CEO of the Northern Virginia Association of Realtors. “I have to say, realtors have been very adaptable. They figured out very quickly how to get homes sold. It’s been really impressive.”

Initially, there was a wave of listings pulled from the market as people reacted to stay at home orders.  Realtors quickly placed more reliance on the internet as a sales tool.

 “The daily number of showings is down substantially, but that’s to be expected as realtors are practicing social distancing,” Conrad says. “There are more virtual tours, less physical tours.

According to NVAR, despite the pandemic, March had strong numbers due to pending listings and a rush to get closings completed by the end of the month. 

Based on current information, “the number of new listings is right on track with where we were in 2019 in Virginia,” says Conrad.  ”Active contracts are tracking above where we were last year.”

However, Conrad adds, “We will probably continue to see a lagging impact in the next month two.”

Dr. Lisa Sturtevant, Chief Economist for Virginia REALTORS®  agrees.  

“We don’t have April data yet, but based on pending sales in March, sales will be down 30%, “ Sturtevant says.

That likely stems from the initial shuttering of non-essential businesses and people navigating the quickly changing circumstances of the pandemic. However, moving forward, the picture looks surprisingly bright. 

Despite high numbers of people out of work, housing prices are strong due to the fact that inventory has been on the decline since last year. Buyers expecting price drops due to the pandemic are going to be disappointed.

“When you put high demand and low inventory together, we see price surges,” says Sturtevant.

Low inventory is also allowing sellers to enjoy multiple bid offers on their properties and the leverage to stick to their asking price.

 “There is a pent-up demand right now,” says Conrad. “If your house is priced right and in good condition it could be really good time to sell.”

It could also be an unexpectedly good time to buy, with interest rates hitting record lows at the end of April, according to Freddie Mac: 3.23% on a 30 year fixed mortgage and 2.77% on a 15-year fixed-rate mortgage. Freddie Mac reports buyers can expect interest rates to remain low for the rest of the year, with an average rate of 3.3%.   

Based on this prediction, “we will probably dip back into that historical area (of low interest rates) again in 2020,” says Sturtevant.

 Even without hitting record lows, “if your job is pretty financially secure and you see 3.3% interest rates, you might decide to take advantage of it,” says Sturtevant.

However, buyers should not expect those low interest rates to correlate with lower house prices anytime soon.

 “Though economists are projecting a softening of the overall number of sales by end of the year, sales prices are still expected to remain strong,” says Conrad.

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