Piet de Dreu, Realtor

04/14/2023

Like most Realtors, I read and hear about "the housing market" every day. Today I checked for myself, looking locally at the market I work in quite a bit, Silver Spring detached homes.

How is the market? Better if you're a seller than buyer. Or for sellers, great and for buyers, it could be better.
Here below is my take

04/10/2023

For those interested in some raw economic data, here is a snapshot of US Rail Traffic. Monitoring rail traffic can be a way to be a little bit on the inside of what is going on with the economy. If the economy is doing well, more rail shipping. If the economy is contracting a little, less rail shipping.
Some trends this data captures is how the Russia-Ukraine war affected oil shipping in the US, and grain. Oil shipping is still up, while our grain shipping had a big boost last spring when Ukraine couldn't ship via Odessa.
Intermodal are containers. Container shipping is down a fair bit from last year. Overall, this data tells me the economy is not growing.
Consumers though, seem to still be buying cars even though interest rates on new vehicles are nearing 9%.
Lumber shipments are down too.
What other things does this data indicate?

03/10/2023

Should I wait to buy?

Instead of hearing this question, I hear: ”I am waiting to buy until interest rates drop.”. Lots of buyers are taking this position, and for good reason. The house that they could buy a year ago with 5% interest is now out of reach at 6.5% interest.

Is waiting to buy until interest rates are lower a good strategy? For some buyers, it absolutely might be. For others, it might be better to buy now.

For those whose job is secure and expect to not move from the area in the next 5 years, deciding to wait because of higher interest rates should consider these two things. First, at your maximum borrowing power, is the house you can buy big enough for your needs for the next 4 years? Lower interest rates will allow you to buy more house. Second, is your rent really cheap and allowing you to save a lot every month? Those are two important questions that might drive decision making towards waiting to buy.

Now for why some buyers may be better off to buy now instead of waiting. First if you are paying pretty high rent, then buying might make sense. Second, if you are thinking of not borrowing to your maximum buying power, you will benefit when interest rates drop by refinancing at that time. Instead of buying then which could be two years from now, you refinance to the lower rates available and save maybe several hundred dollars off your monthly payment. And last, let’s look at history. When interest rates are high because of higher inflation, does inflation cause house prices to drop eventually, or do house prices go up because of inflation as well? Or do high interest rates cause a drop in house prices? Here we are in uncharted territory, mostly because our high inflation seems to be brought on by COVID19. Darn, history isn’t a clear guide. What is known is that if everyone is thinking it is a bad time to buy, that often means good times to buy are right around the corner. If so many house buyers are deciding to wait until interest rates drop to 5.5% or less, then when that time comes will there be supply to support that influx of buyers, or will it be like spring of 2021 when well qualified buyers had little chance to compete with those willing to bid houses well above appraisal values.

It seems that for the last five years in our area, supply has decreased while demand has been going up, independent of interest rates. Low unemployment and low monthly mortgage payments for so many owners don’t seem likely to help end that trend any time soon.
And last, how long will it be until interest rates are down to 5% again is a great question. When interest rates are increased to slow the economy, it usually takes 18 to 24 months before they start coming down again.
So waiting will make sense for some buyers, but for others buying this year might be the best decision.
BTW, I am a Realtor, NOT an economist or a fortune teller.

11/10/2022

The sky is falling, the sky is falling! Doom and gloom in the Real Estate Business. The market is going to tank and house prices are going to fall, maybe as much as in the great recession!

Real Estate Hyperbole, or truth?

To look at what is happening locally, I decided on Zipcode 20906 and what single family homes with garages are selling for. Then compared that to exactly a year ago, and then I looked at May of this year, a time when cash was king and appraisals and inspections were commonly waived.

11/09/2022

For those who are curious as to what the housing market is doing in our area, here is a summary table comparing now, to a year ago.

It seems that the housing market is still not back to "normal", with inventory being low, and low enough overall for the market to continue to be as sellers' market, although not as much as just a few months ago.
For buyers, the good news is that the Median Days on Market has gone up from 12 to 17. That is an indicator that we are seeing fewer homes selling within just a few days of hitting the market and receiving multiple offers.
The other good news for buyers is the Showings number. More than 1/3 fewer showings than a year ago, indicating fewer buyers to compete with. What do others see in this data? Is there data you think is more important?
W

03/18/2021

Fair Housing. A positive term that everyone can stand behind. Who isn't FOR Fair?
sounds much better than all those things that Realtors aren't supposed to do, like steering certain people to certain neighborhoods.
Realtors are well reminded in Maryland and DC that they should not discriminate through regular classes.

Discrimination, does it happen? Of course it does.
Rarely is there the will to do what Newsday did in Long Island a few years ago, doing comprehensive testing, from 2017 to 2019. A resultant video clip is below.

What did they find?

10 of 12 brokerages had clear discrimination
Fair Housing Laws were violated 39% of the time!
Blacks were discriminated against the most, at 49% of visits.
And, EVERYBODY was really nice.

It is a 41 minute video so a real time commitment, and might make you think: "Is this happening here?"
For those who are willing to go an extra step, you can volunteer to be a Fair Housing Tester!! https://www.fairhousingmd.org/

https://projects.newsday.com/long-island/real-estate-investigation-videos/

Fair Housing Action Center of Maryland - Tenant Advocacy and Fair Housing Enforcement