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.