Most of the Fredericksburg region saw an increase in home prices in March, according to the latest Long & Foster Real Estate Market Minute report. Fredericksburg City had the biggest increase of 31%, while Spotsylvania County had a minor decrease of 1%. Most areas exhibited a decrease in inventory, with the exception of Culpeper County which had a 22% increase. The number of homes sold varied widely from a 17% decrease in both Culpeper County and Stafford County to a 26% increase in Caroline County.
With the spring market in full swing, now is a good time to both list your home and buy a new one, according to Larry “Boomer” Foster, president of Long & Foster Real Estate. Foster said, “It’s an exciting time for buyers and sellers. However, it is a challenging marketplace as inventory numbers are down year-over-year pretty dramatically across the region. Though demand is high, there is not enough quality inventory to sell.”
While sellers are able to dictate certain terms to buyer if they’re in a geographical and pricing sweet spot, there are limits to what sellers can demand from buyers. “There are plenty of people buying right now and there’s plenty of demand,” Foster said, “it’s just a matter of sellers doing what they need to get their homes ready to be shown and pricing it appropriately.”
For buyers it is still an exciting time for them since both interest rates and home affordability are in good places. While it was expected for interest rates to grind higher slowly throughout the year, “the dynamics of the world economy have influenced many foreign investors to flock to treasuries as a safe haven for them to park their money, leading the 10-year Treasury bond and the 30-year fixed rates to artificially be held down,” Foster said.
In contrast, the home affordability index went up in February to almost 157, meaning that those making the median household income have 57% more money than is needed to afford the median home price. According to Foster, homes are more affordable now than they were anytime between 1980 and 2008.
For those interested in buying for investment purposes Foster explained that, “People need to be very intentional about what and where they want to buy.” Aspects potential investors should take into account include: determining what kind of investor they want to be, understanding what their buying power is and what return they’re looking for, and working with a real estate professional who understands investing and can provide a good analysis for where the investor is looking.