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Julie Willis

5990 Kingstowne Towne Center
Alexandri a, VA 22315
Office: 703-822-2363
Cell (571) 212-8815
Julie.Willis@c21nm.com
www.JulieWillisRealtor.com
Its an election year. An underlying concern over sequestration throughout the
fourth quarter of 2013 never materialized. Our kids enjoyed sixteen snow days
in the first quarter of 2014. Despite the stuttering start, the DC Metropolitan area
is experiencing a transaction velocity well ahead of the same period last year and
momentum continues to build.

Even as our economy improves, trends in the housing market on a national
basis remain diverse. In parts of the US, it will take several more years to resolve
distressed inventory. As a pillar of our economy, the housing sector will be
supported by federal incentives until recovery is universal across the country.
Programs designed to revive distressed markets in other parts of the country will
continue to benefit our market as well.

Our Windfall: Due to a softening in home sales nationally, policy makers lowered
interest rates by three eights of a percent in just the last twelve weeks. The rate
differential creates an opportunity for those in the market today. The delta in
interest rate means a buyer may borrow over five percent more than the same
payment would have serviced only three months ago. The information below details
how much impact interest rates have on purchasing power.


PURCHASING POWER / INTEREST RATE
FISCAL POLICY, POLITICS AND WEATHER PATTERNS...
How much you pay for a home often matters less than
how you finance the purchase. As an example, the
principal and interest payment for a $250,000 loan at 5.5%
is $1,193 per month. If executed when the interest rate
was 4% instead of 5.5%, the same payment would buy
$47,000 more home.

When the national housing market shows any signs of
slowing, economic policy makers lower rates to increase
demand. If the market shows signs of becoming
overheated, they raise rates. Despite the fact that the
DC market is performing well, rates have come down to
spur the national trend; our windfall.

Today, rates are in the low four percent range and on
some days, the high threes. Economic forecasts call for
rates to be at 5% by the beginning of 2015.
The opportunity to secure mortgage money at todays
rates is significant in the long term. If you are considering
buying a home, now would be a good time to act!
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LONG TERM INFLUENCES
SUSTAINABILITY
INVENTORY
Any feeling of an inventory shortage should
be tempered by reference to historical levels.
Obviously, we endured a significant spike
between 2005 and 2010, however, current levels
are in line with our normal and the market today
is healthy. With three to four months of supply,
buyers enjoy a good selection of property.
Sellers can expect to achieve fair market value
and buyers should expect to pay the same.
Real estate is no longer on sale but gone too
are the days of buyers routinely offering more
than the appraised value. Fair Market Value is
fair.
The reason the Washington DC MSA fares better
than most in recessionary times is our healthy
employment base. Each of our jurisdictions is
forecast to enjoy robust job growth in the near
and longer term. With more jobs comes the need
for additional housing units.

The need for more housing creates more
employment opportunities. Experts suggest that
we will add over a million new positions between
now and 2030. It is really pretty simple; new
workers need a place to live. It will create
higher demand for existing housing and support
new construction at a rate higher than weve seen
in several decades.
REGIONAL ADVANTAGE
The Labor Force Participation Rate stands at
62.8 percent which matches a 35 year low.
We will see sustained job creation initiatives
nationally for the foreseeable future. What
might be designed to spur job growth in a
depressed metro will be applied equally to our
MSA.

Unemployment in our MSA runs about thirty
percent below the national average of 6.7
percent. A tighter labor market typically results
in higher wages. Where we live, things trend
very well indeed.
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REAL TIME INDICATORS

VALUE TREND

A WINDOW OF OPPORTUNITY
In response to a tentative fourth quarter and sometimes
sluggish 2014, mortgage rates remain below what was
forecast. Monetary policy is made to encourage
sustainable growth in the housing sector.
The downward spike in rate over the last thirty days
reflects the underperformance of the sector over the last
nine months.

Rates are unlikely to remain this low since we saw sales
velocity increase substantially in April and May, well
ahead of last years number. The same payment today
buys about eight percent more home than it did just a
month ago. Both are very attractive rates but those
ready, willing and able today are in position to benefit
substantially.
Low interest rates and affordable pricing have
created steady growth in the number of property
transfers annually. The thirty percent appreciation
since 2009 has restored equity for many owners who
are now considering local moves. Many who lost
their homes to short sale or foreclosure are once
again qualified to purchase.

While the national forecast is for a modest decline in
the number of existing home sales, we are expecting
the number to rise regionally. The first quarter was
down marginally, but April and May showed marked
increases over the same months last year.
We expect the number to become positive by the end
of the second quarter.
On average, home prices in our area almost doubled
between 2002 and 2007. Looking back, it is obvious
that trend was unsustainable and unhealthy. We were
fortunate; it only took until 2009 for our values to
bottom out. Since then, weve realized modest
appreciation of about eight percent annually.

Policy makers will continue to moderate the pace of
our market. Cost of funds and lending standards are
the main controls. Today, we are seeing some Dodd
Frank standards being reevaluated while rates remain
below the forecasted level.
BUYER SIDE GROWTH
CENTURY 21 NEW MILLENNIUM | REAL ESTATE NEWS
Julie Willis
.
5990 Kingstowne Towne Center
Alexandri a, VA 22315
Cell (571) 212-8815
Julie.Willis@c21nm.com
www.JulieWillisRealtor.com
SUMMARY
If you are considering a real estate transaction, thorough analysis and competent representation
are essential. We are in a transitioning market. There is potential for profit, as there is risk of
loss. If we understand the underlying facts, we can continue to make good business decisions
logically and without emotion. I am a real estate professional and accept responsibility for
keeping my friends, neighbors, and business community informed as to all aspects of things
affecting the real estate portion of their holdings.
If your home is currently listed for sale, this is not a solicitation. If you have a real estate
question, I will be happy to answer it or find the answer. If you have a real estate need, I will
appreciate an opportunity to compete for your business.
Our team is very good at what we do. Results demonstrate that now more than ever before.
Dont settle for less.
Sincerely,
Julie Crismond Willis