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Ask Adam: Predictions for Arlington Real Estate in 2013

by ARLnow.com | January 8, 2013 at 11:00 am | 1,998 views | 12 Comments

This periodic sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013. Please submit follow-up questions in the comments section or via email.

Question: What changes do you see coming for the Arlington real estate market in 2013?

Based on how 2012 ended, I’m prepared to make five predictions for the Arlington real estate market in 2013.

1) Appraisals – During the last five or so years, appraisal values have been based on an amount equal-to or less-than the most recent home sales in a neighborhood. With home values on the rise, appraisals are going to have to start taking appreciation into consideration above what the most recent sales values have been. For example, let’s say the most similar homes sales were $99k, $102k and $103k, but the subject property has a contract for $105k. In this case the appraiser may need to take appreciation into consideration instead of defaulting to the most recent sales value of $103k. Obviously, appreciation will have to be merited.

2) Selling Buyers To Sellers – As I’ve talked about in past articles, we are seeing more and more competitive situations out there. As a buyer’s agent, I am finding myself “selling” my clients to home sellers more often. By appealing to the sellers on a rational and emotional level, I’m trying to improve the chances of them choosing to work with my client over the other buyers that are submitting offers on the same home.

3) Pre-Construction Sales – I expect that many new homes will sell before they are completed. The bad news is that you will have to use your imagination to envision the finished home. The good news is that you may have an opportunity for input on some of the finishes and design decisions. There is also an opportunity for the home to gain value prior to you closing on it (of course the reverse could also happen).

4) Higher Interest Rates – We’ve been spoiled by absurdly low interest rates, but from what I’m being told by mortgage experts, rates are going to begin inching back towards “normal.” If you intend to purchase a home this year and are depending on the current interest rates, you may want to initiate the buying process sooner than later. Once you have a ratified contract, you can usually lock in your interest rate.

5) More Inventory – As home prices continue to appreciate, I expect that it will motivate more homeowners to sell their homes. The result should be a greater volume of listings and sales in 2013. But, I’m not convinced the housing supply will catch up with demand in Arlington this year. At least not for the under $750,000 market.

I’m looking forward to keeping you updated throughout the year.  Please keep the questions coming.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

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  • Chris

    It doesn’t require a “mortgage expert” to predict that interest rates are going to go up. With an effective federal funds rate of 0.16% it is hard to go any lower.

    The key question is of course: WHEN will the interest rates go up.

    • Bob

      Read the FOMC statements, the FOMC has stated that the FFR will remain between 0 and 25 basis points until at least late 2014.

      • Joan Fountain

        That doesn’t necessarily mean mortgage rates will stay low. The Fed doesn’t set mortgage rates.

  • internet tourettes

    Adam,

    Do you believe that the expected reduction in defense spending will adversely affect housing prices and do you think that when mortgage rates start to rise that the market will be able to support higher financing costs?

  • Vinh An Nguyen

    Does anyone know when does Arlington releases the 2013 assessments?

    • Artie Fufkin

      They should be out shortly. The period to appeal runs from 1/1 through 3/1.

      • Hank

        Wait, are you THE Artie Fufkin? From Polymer Records?!

  • http://maptheroadhome.com/ James Hurley

    In a market like Arlington’s, it is helpful to think about your buying strategy and how you will move from searching using mobile apps and sites, to buying. My blog offers some ideas o how to use today’s tools – FYI – I am not a real estate agent.

    http://maptheroadhome.com/blog/

    • Just wow.

      So you couldn’t get a regular bit on Arlnow.com James, so you resorted to posting your services in the comments of another realtor. That seems somewhat desperate but I see what you are doing here. Turf wars begin.

    • QA Tester

      Site Doesn’t work properly on iOS. It chops off the far right and text cannot be read. Might wanna get that fixed, esp. if you’re claiming knowledge of mobile apps.

    • Lame Blog

      You had an interesting post, so I clicked on your blog. My only response is – LAME. I’m currently looking for a home, and your blog offered zero helpful advise. poorly laid out, now real info, and overall a waste of time an energy.

    • KKR

      A little advice from 5th Ave: Never BRANDish an unloaded weapon.

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