A summary of the Shenandoah Valley Real Estate Market and Economic Summit

WHAT MATTERS Warren – Chief Economist and Senior Vice President of Research at the National Association of REALTORS (Dr. Lawrence Yun) was keynote speaker at a recent event addressing the Shenandoah Valley’s economy and real estate market. Dr. Yun spoke to a large crowd at Lord Fairfax Community College last Thursday, November 29th, and shared a positive forecast for the local and national economies. In this video, Nancy Silva of the Blue Ridge Association of Realtors (BRAR) asks him to share a message for those who couldn’t attend the BRAR sponsored summit. Following his remarks are a few of the most interesting slides he presented.

Dr. Yun remarked that Seattle has been one of the hottest real estate markets in the country, largely due to Amazon, and he added that Amazon’s local announcement should heartily contribute to the already thriving economic conditions in the surrounding area. He revealed that the greater Winchester area has three times faster growth in comparison with the rest of the country.

The presentation began with confidence that interest rates will not skyrocket as many have feared. He also commented that he feels the real estate market will remain relatively stable and “boring” until at least 2020 as he encouraged long term reflection of positive trends in the face of negative headlines.

Investors and homeowners are doing well over the long term despite the resent lull in the markets, he professed. He attributes the current slowdown largely to the time of year. He said we enjoyed a flurry of great activity in the spring and should not be overly concerned about the recent slowdown. Even though new home sales are at a 4 year low, he insists that the downturn is “not a major crash.” He explained that buyers are burned out from spring bidding wars and are now wanting to see 10+ homes before deciding. He says there’s a lack of inventory of entry level homes and buyers are frustrated.

He elaborated on buyer’s diminished optimism and revealed that expectation surveys are conflicting because despite the recent slump, most people expressed confidence in rising home prices. Dr. Yun is optimistic for a strong spring market despite the fact that, “buyers have retreated and homes are on the market longer.” He encourages current sellers to “give in on prices or wait until the spring.” He suggests that buyers should take advantage of the increased inventory because “more inventory means better deals.” On interest rates, he warned that it’s false hope to think that rates will come down and the question is not if they will lower but how much they will rise.

Dr.Yun is encouraged by the fact that people are paying their mortgages and there are fewer owners facing foreclosure. He reported, “homeownership is making a comeback” and that “home prices are unlikely to drop.” He thinks that real estate trends will be relatively boring through 2020 and confessed that if there is a new bubble, it’s in commercial real estate, not in residential sales. He added that people are staying in their homes longer these days (about 10-11 years) compared to past years in which owners were moving before their 8 year purchase anniversary.

Katrina Meade of City National Bank was in attendance at the summit and had great things to say about his presentation, “I thought it was interesting comparing 2004 (before the bubble) and now – ARM (adjustable rate mortgage) loans made up 28.8% of loan applications in 2004 and now they make up only 6.5% – definitely reflective of marketing/sales/perception issue that we as an industry have to continue to overcome.”

Dr. Yun’s optimism was embraced by his audience as he offered appreciated reassurance in the face of questionable headlines. His insight encourages healthy optimism throughout both the local real estate & economic markets.

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