Lynchburg area real estate agents and lenders offer insight into the housing market

The state of the U.S. housing market is undergoing significant changes, and the effects are being felt both nationally and locally.

Carl Miller, principal broker at Carl Miller Realty, said 2023 will see a significant decline in home sales nationwide, with only 3.9 million homes sold, the lowest number since 1993. Stated.

“And the crazy thing was in 1993, there were 260 million people in the United States, and now we're up 30 percent to almost 340 million,” he said.

Miller said the current situation is unsustainable and pent-up demand among both buyers and sellers is the driving force behind fluctuations in market dynamics.

In Lynchburg and surrounding counties (Amherst, Bedford, and Campbell), the median sales price for single-family homes rose 6.3% in 2023. On the other hand, the decrease in the number of units sold (down 19.5% from the previous year) reflects the decline in housing prices nationwide. Depending on trends, the local market has its own nuances.

Despite a relatively stable home inventory of approximately 350 homes for sale in the Lynchburg area, the average list price is a surprising $441,000. But Miller said the homes that are attracting the most attention are those priced below the median, about $340,000.

He said that one of the most important changes observed is in the day-to-day of market indicators. In 2023, homes typically stayed on the market for just seven days before securing a buyer. However, in January 2024, his median days on market reached 56 days.

For buyers, current market conditions offer clear advantages. With less competition, especially for homes that remain on the market for more than a week, buyers have more bargaining power to secure favorable terms, from concessions to closing costs, Miller said. He said he could take advantage of this opportunity.

“There's not a lot of competition for buyers,” he said. “They can get into the home right now, and they're more likely to be the only buyer making an offer, especially if it's been on the market for a week or two.”

Things may change in the spring, but for now the buyer is not competing with other buyers.

“It's very unlikely that you'll be competing with five other offers. So if you have a little bit of teeth, you can negotiate concessions and maybe even repairs. The market is “It's shifted much more in favor of buyers than it did a year ago.”

Therefore, sellers should not expect multiple offers within the first week.

Miller advises sellers to avoid unrealistic expectations for high-demand instant sales and to remain flexible and responsive to market feedback.

Miller said the current market environment benefits buyers. With less competition, buyers have more leverage to negotiate prices and concessions with sellers, he said. This opportunity especially arises for homes that have remained on the market for several weeks, potentially putting buyers in a less competitive bidding environment.

Kem Cobb, a real estate agent with Elite Realty, advises buyers to “marry the house, date the rate,” a mantra that locks in an interest rate now and if rates go down in the future. We advise you to consider refinancing.

Cobb said it's important for homeowners looking to sell their property to find a real estate agent with the expertise to conduct a comprehensive market analysis.

“I'm doing it now and I go back 10 years and I'm just shocked at how much equity people who bought 10 years ago have in their homes. “I think a lot of people are even thinking that they might be surprised by the value of their home,” she said.

She said working with a local real estate agent who has local knowledge is valuable.

“I've actually worked with a lot of people who move here, and it's important to use that local agent. 'I can recommend painters and doctors because they can help,' she said.

Citing speculation about future interest rate declines, Mr Miller urged caution against using potential savings to make bank transactions. While lower interest rates may seem attractive, a surge in demand could offset any potential benefits.

“Let's say interest rates drop 1% in August. You know now is the best time to buy, but even if it's a good idea for you, it's not for everyone or “Think about whether it's a good idea for a million other Americans, too,” he said. He said. “So all of a sudden the affordability index is in favor of buyers. So they have to make an offer on a house that's on the market for $250,000, and we have eight other We had several offers, and instead of selling it for $250,000, we are now selling it for $270,000.”

In the Lynchburg area, he said the area's affordability is a major factor in migration. With a median price well below the national average, Lynchburg presents an attractive proposition for value-seeking buyers. He predicts home prices will continue their upward trajectory, supported by increased demand and favorable affordability indicators.

“No matter what interest rates are, Lynchburg is going to go up this year. Money is flowing in the Lynchburg metropolitan area when there is opportunity, and there is affordable housing in Lynchburg, so home prices will go up. It will be,” he said. “In fact, we know we're going to see a lot more home sales this year than last year. I think we'll sell 15% more homes this year than last year.”

In the first two weeks of 2024, his real estate office had more homes under contract than in the entire month of December.

He said the median age of first-time homebuyers in the United States has risen to 36, and recent research shows there is a strong desire for homeownership among younger generations.

He said 95.5% of Millennial and Gen Z respondents indicated they intend to buy a home in the future.

For those looking to take the leap to homeownership, Miller advises starting by improving your credit score, then saving for a down payment, then contacting a lender to get pre-approved. He said you should contact a local real estate agent who prioritizes relationships over transactions. .

Cobb said first-time homebuyers may be eligible for grants of $12,000 to $15,000 to help with closing costs and down payments, and may be able to inquire with their lender about the opportunity. .

Harmony Frimpong, a loan officer with Atlantic Coast Mortgage, said first-time homebuyers can take advantage of state and federal subsidy programs to maximize affordability and increase purchasing power, thereby increasing their chances of homeownership. He said opportunities should be opened up.

Looking ahead to 2024, Frimpong expects interest rates to gradually decline compared to previous years, paving the way for a flood of buyers to enter the market. This expected rate reduction is expected to increase competition among buyers.

While interest rates can vary based on individual circumstances and loan products, he notes that average rates are in the low 6% range, and buyers should consult with their lenders to find the best option for their specific needs and financial situation. I mentioned that I needed to check my financing options.

He said it was important to maintain healthy credit habits and advised buyers to prioritize timely bill payments. By keeping credit card balances below his 30% of the allowable limit and nurturing his account over time, a buyer can strengthen his credit score and increase his eligibility for favorable loan terms. .

Unlike large banks, local agencies often have direct access to state housing programs, offering buyers a unique opportunity to leverage financial assistance and streamline the homebuying process, he said.

“I think there is great value in working with local financial institutions because they know your area well,” she said. “They also know about the subsidies available to first-time homebuyers in our community. If you are thinking of buying in 2024, your best bet is to talk to your lender about credit. Because if you need to take advantage of or save, we can help you make a plan. We just advise you about your money and your options.”