Ask three Coastal Virginia real estate experts—Terry Gearhart, Katie Zarpas and Becky Claggett—to predict the future, and they’ll each respond the same: 2017 should be good.
After 10-plus years of a twisting and turning market that kept experts and neophytes alike on their toes, this year points to stability.
“It’ll be low to mid growth, 2 to 4 percent, average growth,” says Gearhart, a manager with Residential DataBank and a sales manager with Rose & Womble Realty. “That’s a good thing. 2011 we were at the bottom. Finally, in 2013, there was a little life; we were clawing our way out in December 2014, and 2015 saw double-digit growth. The same in 2016, with some areas showing double-digit growth and others single.”
The 37-year real estate veteran notes that new jobs should be the driving factor behind the growth.
“We’ll see how it goes, but President Trump appears committed to adding jobs and specifically military jobs. The DOD (Department of Defense) has committed to shipbuilding, so employees laid off before will go back to work, and two local key groups—Hampton Roads Economic Development Alliance and Reinvent Hampton Roads—are focusing on six, high-paying industries as they recruit businesses to the area.”
Plus, interest rates, after rising slightly after the 2016 presidential election as predicted, should not increase drastically. Claggett, 2016 chairman of the board for Hampton Roads Realtors Association and a managing broker with Century 21 Nachman Realty, is encouraged by forecasts from Fannie Mae and Freddie Mac, agencies backed by the federal government. She notes that in a report published the day after the election, Fannie Mae called for low mortgage rates into 2017 and even 2018. Thirty-year mortgage rates should be around 3.6 percent in the first half of 2017, rising only to 3.7 percent by year's end. Rates in 2018 are predicted to be just 0.10 percent higher than that.
“Freddie Mac makes its own forecasts,” Claggett says. “But its predictions are strikingly similar to those of its sister agency.”
Even if rates creep higher, Gearhart sees buyers still knocking on sellers’ doors. “If we go to 5 percent, buyers just shift down slightly in the prices they can afford,” he says. “People purchase homes to solve problems. They need more space for the new twins they’re having, or they’re getting divorced. Some were hesitant to buy as we came out of the recession a few years ago, but they are coming back.”
Millennials—now in their 20s and 30s, paying off college debt, getting married or tiring of living with their parents—are particularly ready to buy.
“New homes under $400,000 seem to be selling quickly,” says Zarpas, a certified real estate negotiator with Long & Foster, Christie's International Real Estate. “The ones in the $200,000 to $300,000 [range] are going like hotcakes. I believe inventory is very low.”
Claggett points out that as these millennial buyers jump into the real estate market at a greater rate, everyone is affected. “The segment of the market that should do the best is the first-time buyer or the millennial buyer,” she says. “Therefore, that move-up buyer will be selling their home to the millennial and moving up.”
Sellers and their realtors are increasingly relying on social media for marketing to this age group and others, and virtual, online tours are moving from still pictures to three-dimensional videos with technology from companies such as Matterport.
“With the 3D, you can look up and down in the home, back and forth; look at any space, hop in the shower,” Gearhart says.
Drones to show aerial views of the home, the yard and the neighborhood are also popular, Zarpas notes.
“Any home should have these images,” she urges. “No matter the price point of the property.”
The 3D video and drone technology is simple enough for anyone to operate, and homes for sale are easily found online now. Both trends, however, do not mean buyers and sellers will find it easy to go it alone.
“My first piece of advice is always talk with a few professionals and interview them,” Zarpas urges. “Don’t necessarily go with the first person you talk to. Make sure they know their stuff.”
Gearhart concurs: “Go for a team—a realtor and a lender—who know what they are doing. Thanks to the great listings everywhere, you don’t need a realtor to get access to them, but buying and selling are complicated and can get sticky at times.”