Market Updates

Greetings and Happy 2023!

I hope you had a wonderful Christmas and New Year's! It appeared as though we may get a bit of snow although that didn't seem to pan out. On the other hand, it certainly felt like winter, especially with the power out.

To be a bit more personal than usual, I will say that I'm very hopeful and optimistic for 2023. Last year wasn't the greatest, losing my Father in March and Mother-in-Law in October, 2 bouts of Covid, and assisting with 3 family moves. That in the wake of trying to help steer a real estate company, a local non-profit (ARC of the Piedmont), and navigate family issues through 2 years of Covid proved to be something (I honestly can't find the adjective that fits).  However, I also carry an abundance of joyful memories and for that I am eternally grateful.

We have also been living in interesting times (by some this is considered a curse) for the real estate business. Covid, RSV, the flu, inflation, talk of a recession, pipeline constraints, and interest rates have all been topics of discussion and concern. Who would have predicted when Covid first shut everything down that 2020 would end up being a great year in real estate followed by a very robust 2021 as well? 2022 began strong although limited by the persistent low inventory challenges we have faced for an extended period. However, the market did significantly slow beginning in the late summer and remained comparatively slow through the fall. Reasons for that include limited inventory, buyer fatigue, concerns of a recession, rising interest rates, and concerns about price escalation over the last few years.

So, what do I see going forward? Being an eternal optimist, I do not see the sky falling at all despite what you may read in the news. So here are my predictions for 2023 (please remember my crystal ball broke some time ago). While the market may remain a bit slow early in the year, it will pick up significantly as the year progresses. Inflation and interest rates will both come down adding to consumer confidence. Inventory in most areas, while improving, will remain low continuing the challenges for buyers and countering the pressure for home price declines. Will my prediction be accurate? Yes, no, and maybe. Every market, neighborhood, and home is different, so how the market may impact your plans or decisions needs to be analyzed individually. If you do have questions, please reach out to us. We would be delighted to help you make the best decision for your specific needs.

I hope you have a wonderful 2023 and I look forward to seeing you again soon.

Rives Bailey

Kelly Faillace, John Farmer, & Christy Fiebert

Happy New Year and welcome to 2021. Much has been written about the last year by talented writers who possess great insight and an exceptional ability to express or persuade. This is not one of those letters. While I'm happy to have 2020 in the rearview mirror, nearly all of the issues that have created stress remain with us. We are still in a pandemic, the political arena is a mess, and divisiveness seems to be the order of the day (at least if you watch the news or follow social media). In reality, we are all in this together though so take the time to offer a kind word, hold the door for someone, and smile.

When the pandemic hit in March, I will confess that my stress levels went through the roof. The enormous uncertainty led me to have many nights of disrupted sleep and a constant high level of background anxiety. Yet despite my worrying, the real estate market was actually quite strong. March and April were of course very slow as everything went into a lockdown. However, over the balance of the year sales improved steadily and annual totals for 2020 surpassed those from 2019. Not bad considering everything that went on in 2020.

General consensus for 2021 is also quite positive for the real estate market. Expectations from a wide variety of sources point to increasing sales and moderate price appreciation. Mortgage interest rates should continue to be very low although there may be some increases later in the year. New construction is also expected to be strong with increased building activity over last year. This is needed to try and fill the void created by record low inventory levels of available existing homes. Unfortunately, there are also shortages of building materials and qualified trades which hampers efforts to increase production. These supply limits are expected to continue leading to price increases and frequent multiple offer situations.

For those of you considering whether or not this might be the right time to buy or sell you are correct, it might be. Many factors should be considered when making this decision and we would be happy to help you make the best decision for your particular needs. For those of you not considering making a move this year please keep us in mind for others you may know who we could assist. The vast majority of our business is from repeat or directly referred clients and we appreciate the faith you have placed in us over the years.

In closing may I wish you all the best for 2021. I hope that you and those around you stay safe, healthy, and that we all have a less "interesting" year. With any luck we may all be able to gather again this year, go to restaurants and sporting events, have parties, and hug!

With gratitude,

Rives Bailey, Kelly Faillace, John Farmer, & Christy Fiebert

A Note From Rives:

I hope you are all doing well and managing to stay healthy both physically and mentally during these trying times. We are grateful as a team to have managed to maintain our health in both areas and have had a strong year business wise as well. Every day seems to bring new information so finding solid footing in business recommendations has been challenging. Part of the conversation about real estate is often "typically we see…." or "usually this time of year….". This year has been and will continue to be anything but typical or usual.

As if the Pandemic weren't enough, we are also facing significant unrest due to racial inequality, tremendous economic uncertainty, and the fact that it's an election year. All of these contribute to a collective anxiety that is likely to remain for some time.  How do I handle that personally? I go for a hike along the Rivanna Trail, go mountain biking at Preddy Creek, and play music. I also try to offer everyone, whether it be at work, picking up take out dinner, or simply at the gas station pump, a few words that might make their day a little better. We are all in this together.

2020 started off full of expectation for a strong year despite a continuing lack of inventory. Indeed, the pace of sales through mid-March was running well ahead of 2019, and then everything changed. As you would expect, the market came to an abrupt halt as consumers stayed home and everyone tried to understand what protocols to follow to keep everyone safe. Many sellers chose to take their homes off the market and many others decided to delay selling or moving. But the slowdown that began in March, which was substantial, had reversed course by June. While still below 2019 in total sales through June 30th, the month of June was stronger than June of 2019. Preliminary numbers for July show a slight lag in closings but an increase in pending sales over 2019. Unfortunately, the inventory of available homes remains well below what is needed to meet demand.

So then what are my thoughts for the balance of 2020 and beyond? First, I do not expect to see mainstream residential housing prices come down. There is simply too much demand and not enough supply. Second, while the market overall in 2020 may trail 2019, it should be a solid year with steadier activity through the second half of the year than we normally see. Third, the spring of 2021 is likely to be quite robust as (hopefully) we see the end of the Pandemic and many rushing to take advantage of exceptionally low rates. Low inventory will continue to be a significant challenge for market growth for some time.

Will my predictions be correct? We shall see, but if you would like to talk further (about real estate or just personally) we would be delighted to hear from you. We are but a phone call, text, or email away.