Herndon house sales do usually respond in the seasonal pattern that is familiar in most other areas. Spring and summer lead the way for weather-related, financial, school scheduling and other family-related reasons. From now into well past July (and sometimes even August), house sales activity can be counted on to peak. Those are the normal expectations.
But when any segment of U.S. house sales numbers quadruple expectations even before spring bulbs see daylight, that’s worthy of special attention. That was the case last Thursday when the Commerce Department reported that in February, purchases of newly built homes rose by more than 6%. Since The Wall Street Journal’s panel of experts had forecast 1.4%, it drew headlines.
In fact, this was the second month in a row for sharp rises in U.S. new home sales—and what could be a bright sign for Herndon’s own prospects as the spring selling season begins. Press reports were, to put it mildly, enthusiastic:
Bloomberg’s Michelle Jamrisko deduced from the house sales rise that the impact from the recent rise in borrowing costs was, at most, “modest.” That sentiment was echoed by the Realtor, which quoted the National Association of Housing’s chief economist. “The uptick in mortgage interest rates,” he said, “is having a minimal effect.”
We’ll have to wait and see whether that is true vis-à-vis the impact of mortgage interest rates on Herndon’s own house sales. They might be either “modest” or “minimal”—or the prospect of continuing hikes might induce more Herndon prospects to get busy sooner rather than later. If “sooner” describes your own inclination, I hope you’ll decide to put thought into action by giving me a call!
Striving to become a prudent person is a laudable goal—one usually only achieved after impetuous youthful misadventures have taught the wisdom of prudence. Caution—particularly in financial matters—may seem to be synonymous with prudence—but they aren’t always the same thing. Especially when there are magicians at work.
An example of that can be found in the way most people think about Herndon rental properties. There’s no sleight-of-hand from the landlord’s point of view: few would argue with the proposition that rental properties are a prudent form of investment.
The now-you-see-it, now-you-don’t sorcery happens when the audience (in this case, renters) view the same proposition: buying a home instead of renting. From that perspective, the exact same prudent investment can seem to be transformed into a fearfully huge risk. Taking the plunge—buying a home—has become a dangerously formidable commitment. It would seem to be a more prudent course to put off that kind of years-long gamble. After all, who knows for sure what the future will bring? Signing on the dotted line for a 15- or 30-year Herndon home loan seems like a humongous step into the unknown.
This apparently prudent risk assessment is actually a conclusion that fails to see what’s happening behind the distracting illusion. At its root is a basic truth behind the rent or buy decision:
Unless you’re living with your parents, you’ll be paying off a mortgage—either way.
The choice comes down to paying for a landlord’s loan or paying for your own. If you take the mortgage yourself, you have to make the payments. If you rent from the landlord, you also have to make the payments—with the landlord acting as middleman.
As soon as you’ve peeked behind the curtain to acknowledge that fact, a couple of other notable backstage realities are likely to come into focus:
First, if you buy a home via a fixed-rate mortgage, you can plan on what your payments will cost—now and 15 or 30 years from now. It’s written in stone. On the other hand, if you rent, you won’t know what your rent payments will be a few years from now. The first choice is the one that creates predictability and stability: i.e., prudence.
Second, if you buy, eventually the loan payments will equal zero. If you rent—well, having seen behind the curtain, you know what happens eventually: i.e., more payments.
At least in the world of Herndon rental properties, there is a distinct difference between prudence and caution. In the rent-vs-buy calculus, it’s pretty clear which is which.
Once you have peeked behind the curtain, you may also conclude that it’s an even more prudent idea to become a landlord yourself. And right now, there are some excellent Herndon rental properties that could make that possible.
To investigate further, give me a call!
When it comes to the reality of pricing a home in Herndon, it’s natural that buyer’s and seller’s points of view reflect their different roles and objective. In a way, they are mirror images of each other.
From the seller’s point of view, pricing their Herndon home starts out from the reality check of the “comps”—the prices registered in recent comparable neighborhood sales. From there, the pricing decision revolves around the tradeoff between maximum asking price versus the desire for a speedy sale. Even if there is no time pressure at all, serious sellers will still set the asking price below a level that indicates disregard for current market realities. Rather than communicating “this place is worth more than what people are willing to pay,” overpricing only serves to needlessly put off buyers and their agents. If time pressure is an issue, experienced sellers will peg the asking price just enough below neighborhood comparables to make the value evident. Tagging “motivated seller” on the listing can attract attention, but the right price cuts to the chase. That’s a tactic bound to draw timely offers—especially when a Herndon property is in A+ showing condition.
For most prospective Herndon buyers, it’s the mirror image. Rather than starting from the reality of neighborhood comps, the pricing of their future home begins as an abstraction: the “looking” range. The top of the range will be a figure that is derived from what is comfortably affordable rather than what that figure will command in the current market. Once the serious house hunt is underway and some area properties have been visited, that top-of-range number will almost always need some adjusting—usually (but not always) upward.
Thereafter, when some desirable Herndon properties have been located, pricing from the buyer’s perspective is apt to become largely an exercise in deconstruction. Even though a home is actually desirable, it’s hard to resist zeroing in on the property’s weak points, turning flaws into subtraction fodder for mental offer calculations.
In a successful transaction, the mirror images of buyers’ and sellers’ approaches to home pricing do ultimately wind up converging. That’s another area where having a knowledgeable Herndon REALTOR® on your team is invaluable. When it comes to offers and counter-offers, whether you’re a buyer or seller, having your side of the negotiations handled by an experienced professional is a sure way to keep the other side tethered to reality. Arriving at a bottom line reflecting realistic and lasting Herndon real estate value is what most often winds up bringing both parties to a happy conclusion. The first step? You guessed it: call me!
When it’s one of those weekend days when the Herndon weather has refused to cooperate with outdoor plans, one way to fill the idle time is to go online in search of home improvement ideas. You may not follow through with any for your own Herndon home—but it’s amusing to review the almost unlimited number of clever and inventive notions people have put online.
When it comes to the kitchen, for instance, there are bounteous home improvement ideas. There’s the herb garden wall (in addition to a green thumb, a powerful sunlamp in the ceiling is required) or the pool table top that slips right over the center island. That one wouldn’t work if your kitchen’s island is plumbed: the water faucet would stick up and ruin everything.
But among the clever and innovative home improvement ideas you will also find some that are totally impractical—or just plain terrible. Here are nine of the silliest I’ve found--
Herndon home improvement ideas can be unique and fanciful—but are best left in the idea phase if they are so unique and fanciful they would drive away potential buyers. Even if you aren’t planning on selling your place any time soon, it’s prudent to keep that option open. And if you are making plans that are more immediate: give me a call in advance!
Herndon house buyers and sellers were not surprised in the least at last week’s Federal Reserve decision to notch up the Fed Funds short-term rates. For once, anticipating the move had been easy. The surrounding factors—the economy, employment, and consumer confidence measures—were all in unison, pointing to a meaningful improvement now underway.
Already, a day before Wednesday’s announcement, Herndon readers could confirm what was coming: “Mortgage applications rise 3.1% as borrowers rush to lock in rates,” per CNBC on Tuesday; “Mortgage rates jump as economy revs up,” echoed MarketWatch.
The editors at CNNMoney, well aware that the “news” was not likely to gather much attention, wisely chose a more direct appeal by promising to explain “What a Fed rate hike means for you.” The listed major impacts:
Since Herndon house buyers belong to that Big ticket group, the last point was relevant. Although it was pointed out that a rate hike “does NOT guarantee that mortgage rates are going up,” a number of outside factors pointed in that direction. So Herndon house hunters might or might not expect that the immediate future could bring higher home loan rates, but the current climate was still favorable—a caption read, “rates are rising but still low.”
So far, so good. But then, to illustrate, CNNMoney offered a cartoon sketch picturing a balance scale with coins in one pan and a house in the other. The drawing was shown under a headline exhorting, “Homebuyers: Decision-making time!”
That graphic was the only obtuse message in an otherwise straightforward commentary. The puzzling part was that the scale showed the cartoon coins weighing heavier than the cartoon house. The visual metaphor for decision-making time would seem to illustrate that the money was more important than the house, which seemed to mean that prudent Herndon house buyers should hold onto their coins. But the article argued for the opposite. The message for Big ticket buyers was right there in the “rates are rising but still low” headline.
I think it’s fair to guess that CNNMoney’s Art Department is at odds with the Financial Prognostication Department about “What a Fed rate hike means for you.” For Herndon house hunters, my takeaway would be to side more with the Finance Department. Certainly, if you are preparing to take advantage of the current crop of great real estate buys, the scales should be weighted toward nabbing the house.
For a head start—give me a call!
The attachment we build to the places where we live is an easy-to-understand human emotion. Almost everyone who has ever moved away from a family home has experienced a sense of loss that can be quite profound. But that’s only one of the emotional connections that come into play where real estate is involved.
Even though we tend to think of such important decisions as buying and selling Herndon real estate in more hard-headed terms, a host of complicated human factors can play an important role.
One of them is becoming more prominent—and is likely to grow more so as we advance into Herndon’s peak spring and summer real estate selling season. That is the hard-to-pin-down factor of general well-being: the nebulous—but real—sense of optimism or pessimism that is shared by the public at large.
It’s undeniable that when people feel good about the way things are going, they’re also more likely to feel confident in what the future will bring. Confidence breeds courage, security, self-assurance. When things seem to be going our way, we’re more likely to strike out in new directions.
The key word is “confident.” Social scientists do their best to get a handle on this murky shared human phenomenon by measuring “consumer confidence”—which seems to be an economic measure, but which has to be also aligned with the “right direction/wrong direction” polling that politicos track. In any event, when confidence rises, we’d expect that Herndon real estate prospects will improve along with it.
The idea that emotion is a measurable part of real estate is confirmed by the quasi-governmental statisticians at Fannie Mae, who have institutionalized the idea with their Home Purchase Sentiment Index. (If “sentiment” isn’t an emotional measurement, what is?). And it’s up —way up! In February, the share of Americans who think it’s a good time to buy a house rose 11% to 40%—its highest point ever. And this month, by the end of last week, Bloomberg was reporting “consumer confidence” at its highest since 2000. The University of Michigan agreed, placing their “Current Economic Conditions” component at its highest since the same year.
As one who deals in the Herndon real estate market every day, I can verify that when the general outlook turns positive, both buyers and sellers perk up—it’s palpable. It’s also true that the emotional component of real estate is a lot wider than consumer poll numbers measure. For example, there’s the feeling I get when I’m there to watch a client turn the front door key of their new Herndon home!
I hope you’ll call as soon as your own Herndon real estate plans begin to take shape. I’ll be able to help from the earliest stages on!
The timing for when to sell a Herndon home can be a decision that pretty much makes itself. Sometimes family demands call for a move to larger or smaller quarters; sometimes a change in career demands or a schooling decision dictates a residential switch. But there are other times when an eventual move is in the cards—but timing is flexible.
That’s a situation where the decision can hinge on expectations for where future Herndon home prices seem to be headed. Nobody likes to be taken by surprise—especially if the surprises were foreseeable. As we enter the start of the peak Herndon real estate selling season, it would be useful to know the direction Herndon home prices are likely to move. Right now, it looks as if mortgage interest rates are moving upward: will that make selling more difficult?
Looking for a truly well-educated guess, it’s hard to argue with the Nobel Prize Committee. Fortunately for us, those ladies and gentlemen named someone in the real estate economics field worthy of their international seal of approval (and a chunk of their 2013 Prize money). That’s Robert Shiller, the Yale Economics professor who accurately predicted both the dot-com and housing bubbles and who co-authors the authoritative Case-Shiller Index.
One logical concern for Herndon homeowners might be whether rising mortgage interest rates are likely to soften Herndon home prices this spring. The Wall Street Journal provided a reassuring answer: “U.S. Housing Market Roars into 2017, Case-Shiller Says.” Per their month-end roundup, “Home prices shrug off higher interest rates.” The shrugging they cited was indicated by the fastest growth in home prices since 2013—despite higher interest rates.
This may not be tantamount to Prof. Shiller’s personal guarantee that the recent interest rate rise won’t retard Herndon home sales—yet it does seem that history has seen a similar home price phenomenon before. In 1983, a 2.04% rise in mortgage interest rates resulted in a 6.6% rise in real estate values. In 1987, similar results. Between April 1999 and May 2000, a 1.6% interest rate rise accompanied a nearly 11% rise in values!
Herndon home prices will certainly not see anything like that 1999 kind of dizzying marketplace—and that’s just as well. The national consensus for 2017 is for moderate price gains in the 4%-6% range. But for those holding back from listing for fear that prospective buyers may shy away this spring, it doesn’t seem to be likely.
In fact, with a little imagination, you may almost be able to hear the approaching sound of the Journal’s housing market “roar.” If so, I hope you call me soon!
Time Magazine ended last week with a commentary that could foreshadow how this year’s Herndon housing market might differ from years past. Author Bill Saporito identified a mismatch in the housing market that could bode well for empty nesters. Whether or not the implications will be a perfect fit for our Herndon housing outlook, the “Big Picture” assessment does seem to gel with a lot of what we’re hearing and reading.
Time’s housing market “mismatch” begins with the national assessment that the U.S. is experiencing an annual shortage of as many as 700,000 new homes. Even though the latest economic outlook is refreshingly encouraging, new home builders are only now beginning to build the capacity to expand operations. As a result, “they haven’t banked as much land” or filed enough permits to keep pace. It’s also possible that the new administration’s crackdown on illegal immigrants may materially tighten labor availability.
The upshot is to create a scenario where demand for existing homes rises, putting current homeowners in “prime position” when they decide to list. Bolstering that proposition are some national statistics which peg the supply of existing homes at a scant 3.6 months—and it’s been more than a decade since the supply was that low.
What that probably means for our local Herndon housing prospects is what you expect when demand outpaces supply. When those greater conditions combine with the more immediate local factors, the overall takeaway should be good news for empty nesters (and downsizers in general). In addition to the extra energy that arrives with real estate’s traditional spring selling season, this year, in addition to the shortage of supply, the specter of rising Herndon mortgage costs acts as an extra prod. Time quotes the chief economist of one global group on that score: “...buyers are beginning to realize you might as well get in now.”
The good news for baby boomers, empty nesters, and downsizers of all stripes is that the new housing starts are now disproportionately being designed with them in mind: high service, luxury condos leading the pack. What that means is even fewer new single-family homes are in the pipeline—further raising demand for their existing properties, if and when they decide to list.
If you have been considering any of the opportunities unfolding in today’s Herndon housing market, I’ll be delighted to discuss ways I can help you take advantage of them. Call me for a consultation—of course it will be obligation-free.
This Sunday marked the annual “spring forward” sleep-robbing occasion: the switch to this year’s Daylight Savings Time. “Springing forward” may sound like a spirited, energetic exercise, but for Herndon residents like me who do our best to keep regular hours, this week it will inevitably produce, at minimum, an extra yawn or two.
Despite the Daylight Savings enthusiasts’ objections, the way the Earth and Sun naturally cooperate with each other seems perfectly satisfactory. The gradual lengthening of daylight proceeds slowly enough to give everyone in Herndon ample time to adapt without interference from outsiders. It’s never been clear why we are asked to abruptly reprogram our internal clocks the way DST promoters insist. Originally, they say the reason offered was to save fuel—but if that never seemed to make much sense, you’ll be gratified to know you aren’t crazy. A 2011 study in Indiana proved that 4% more electricity was required once Indianans started observing DST.
Given that fact, it might seem economical for Virginia to stop observing Daylight Savings so we could save that 4%—but then we’d be out of luck trying to figure out how to sync up with everybody in the rest of the country (except for Hawaii and Arizona).
That issue hasn’t been enough to discourage some foreigners, though. The number of countries observing DST has been gradually falling in recent years. Between last year and this, for instance, Turkey and Mongolia dropped out. The world is now counting 75 observing countries, down from a high of 86 just eight years ago. If this keeps up, by 2030 or so, we may not have to discuss this at all!
This year Herndon’s calendar was complicated by the Daylight Savings kickoff being scheduled perilously close to Saint Patrick’s Day (Friday). This could result in more celebrants than usual nodding off during the festivities. Sleep-deprived party-goers might forget that they’ve already endlessly discussed whether green beer is a useful invention or whether St. Patrick really did drive all the snakes out of Ireland.
If they have fully recovered from Sunday, they might recall that there were never snakes there in the first place. “Snakes” was actually contemptuous put-down for the Druids, who were, in fact, driven from the Emerald Isle. As a group, they’d surely have grounds for a whale of a slander suit. There may be some Druids left somewhere (but probably not in Ireland).
Despite these distracting events, I can report that Herndon’s spring selling season is seeing the light of day and proceeding right on schedule. I hope you will give me a call if real estate matters will be part of your 2017!
If you go looking for new ideas to make a relocation to or from Herndon easier, it’s amazing how often the words “stress” and “relocation” appear in the same paragraph. The most universally agreed-upon method is to separate the two by hiring relocation professionals—not surprising since many of the most-read articles are authored by people involved in the industry. But the runners-up when it comes to relocation are either work-related (for those who are making the move to change jobs) or moving-related (the nuts and bolts of a household move).
Since I’m involved in moving-day drama reduction on behalf of my clients, some of the tips are those I’ve seen work wonders. The first one is something you can get started on long before any move is on the calendar:
1. Stockpile cartons, bubble wrap, padding paper—even those peanut-shaped plastic fillers. More and more, Herndon residents are buying everyday items online, so the shipping cartons and packing materials inside are a lot easier to come by. The only issue is creating an area where you can hoard them.
2. As relocation day nears, be sure to have the other basic packing materials on hand: those disposable heavy-duty Scotch shipping tape rollers and a couple of magic markers.
3. Within reason, try to sell everything you can (they’re not called ‘moving sales’ for nothing). Especially if you are moving out of Virginia using professional movers, the weight saved can make a meaningful difference on the expense side. If you are fond of shopping, there’s even the bonus of replacing shopworn items with new ones at the other end of the move.
4. Think forward; pack backward. Imagine the ideal order for unpacking (label an “open 1st” box, “open 2nd” box, etc.), then line them up backward, so that the “1st” box will be first to be unloaded and easiest to spot.
5. In connection with that earlier “sell everything” tip, once ensconced in your new home, resist the urge to rush right out to complete every room’s decor. Experts agree that this is one of the most common reasons that relos wind up with expensive cost overruns. Relax for a few low-stress days as you unpack at a leisurely clip. Plan to give yourself ample time to figure out what’s really indispensable in your new environment.
The single extra “Top Tip” that most relocation counselors agree upon? It’s Number 6—to avoid falling into the trap of assuming that a simple Herndon-to-Herndon move doesn’t also take some degree of preparation. Above all, pack fragile items as carefully as if they were headed across the Virginia border!
Please don’t hesitate to call me for local recommendations when it comes to a move from or to the area: I’ve spent years collecting a solid slate of proven Herndon resources!
Mom. Mother-in-law. Chef's Wife. Navy Chief's Wife. Realtor. Christian. Connector. Empty Nester. Business Woman. Foodie.