Most of the Winchester Region saw an increase in home sales, according to the Long & Foster Real Estate Market Minute report. With the exception of Winchester City, which had a decrease of 13%, the rest of the region showed an upward trend of units sold, including Frederick County with an increase of 39%. Median sale prices rose in some areas, most notably in Shenandoah County which had a 21% increase. Inventory continued to fall throughout the entire region, with Warren County having the largest drop with a 10% decrease.
“When you look at the market in Winchester the economy is good,” said Larry “Boomer” Foster, president of Long & Foster Real Estate. “We’ve got ample demand, there’s plenty of credit for people to get and we’re not artificially running prices up. The only difficulty in the market is the lack of product to sell.”
There are many reasons as to the shortage of inventory: a lot of baby boomers are aging in place, people who bought or refinanced homes when interest rates were at an all-time low don’t want to move away from that rate and builders are not providing product consumers want.
The tariffs that are being enforced on Chinese goods and Canadian lumber are driving up the materials costs. That along with the increase in wages for skilled workers and land appreciation is putting a squeeze on builders’ margins, Foster explained. Builders are offsetting those margins by building bigger homes however most consumers nowadays are looking to buy entry-level homes.
With interest rates so low consumers have more buying power, meaning more can get qualified to buy. With the current economic environment Foster anticipates the interest rates to continue to be low as “domestic and foreign money get parked in U.S. Treasury bonds, keeping the yields on bonds and 30-year fixed rates down.”
Should homebuyers choose to get a new construction home though, Foster expounds the importance of working with a real estate agent. Typically, people may assume an agent unnecessary for new homes, however the process is different, and contracts are intense. “You need somebody who’s well-versed in the process as contracts are written in favor of the builder and may not always help you get the best value,” he said. “An agent can help you decide if an upgrade is worthwhile or if another home improvement professional can do it later for less money.”