There’s reason for those who make their living in real estate to feel better about the nation’s economy, and by extension the economy of the state of Virginia and the Piedmont area.
Speakers at a forum held by the Greater Piedmont Area Association of Realtors (GPAAR) July 23 at Lord Fairfax Community College in Warrenton offered their assessments to about 90 realtors and public officials, including Rappahannock County Administrator John McCarthy and supervisors chair Roger Welch.
Rappahannock, meanwhile, seems to be undergoing a modest rise in sales of homes and land, according to several local agents.
Since the bubble in the housing market burst and the economy went into recession in 2008, followed by a couple not-so-great years, a change for the better is noticeable, said Lawrence Yun, chief economist for the National Association of Realtors.
“We’ve had a couple years of recovery. More people are able to buy homes,” Yun said. Mortgage rates have risen to about 4.5 percent from 3.5 percent over the past two years, “but it’s a bargain rate compared to the 13- to 14-percent” level of years past. But he predicted that mortgage rates will hit 5 percent by year’s end.
Even with higher interest rates, tighter economic policies by the Federal Reserve and the likelihood of higher inflation rates, Yun forecast “a multi-year housing expansion” fueled by pent-up demand and growth in population and jobs.
Any doubt that Rappahannock County is part of the D.C. metropolitan area was dispelled by speaker David Versel, a researcher at George Mason University, who said that both Rappahannock and Culpeper counties are considered part of the metro region based on commuting patterns.
Versel told the assembled that the recession is not yet over. “We are a job-driven market,” he said, and while Yun’s view of the future sees job growth, Versel pointed to the loss of 22,000 federal jobs over the past two and a half years after a spurt during the early stimulus-driven years of the Obama presidency. Federal procurement spending is down $41 billion over the same period.
But June 2014 was a good month for job growth, Versel said, and he sees slow growth from 2015 to 2017.
As for other predictions, “ask me in November 2016” when a new president is elected. “A lot could change between now and then,” Versel said.
Jonathan Hill, president of RealEstate Business Intelligence, a firm that analyzes the real estate market, said that there has been a 17 percent increase in active, pending and sold properties over the past year. Higher prices paid for property are encouraging other sellers to come in.
Butch Zindel, owner of Rappahannock Real Estate Resources in Washington, said he was “encouraged by what Dr. Yun said,” but a bit puzzled by Versel’s statement that the baby boom generation was happier living in or near cities with nightlife and amenities, and how that squared with an expected growth in the rural housing market. Perhaps some of that rural growth will come from people working from home or from people buying second homes, Zindel reasoned.
“Basically I was encouraged. It doesn’t seem like the market is going crazy It’s a steady, normal, increasing market,” he said.
Rick Kohler of Washington’s Better Homes and Gardens/Real Estate III agency was not at the seminar, but reported an upswing in real estate activity over the past year, even during the winter, which he said is unusual. “I think people are recognizing that the market has bottomed out. Interest rates are beginning to fluctuate.”
Like the forum speakers, Kohler noted Rappahannock is not typical of the market as a whole. “We sell a lot of second homes,” he said.
As forum speakers pointed out, fluctuations in the smaller volume of real estate sales in Rappahannock can make the differences look outsized.
That said, Kohler said this week that there’s been a 110-percent increase in land sales through July 26 (with 19 land sales compared to nine for the same period last year). There were 49 home sales recorded through July 26, a 40-percent increase over the 35 recorded for the same period last year.
Martin Woodard of Cheri and Martin Woodard Realtors in Sperryville also reflected on the fact that “we’re a real small market and it doesn’t take too many sales to make a difference.”
In his view of the current market, he said he thinks there is “more commonality,” or a meeting of the minds, between buyers and sellers on the price of property. “Buyers realize they’re not going to be able to steal the property and sellers have a better understanding of what’s a fair price for their property.”
Heidi Lesinski, a Century 21 agent in Rappahannock, said she’s had two recent sales, has one property under contract and one active listing. The seminar, she said, basically confirmed what she knew.
“Rappahannock is kind of a special place. It doesn’t necessarily conform to national trends . . . People are here who want to be here,” she said. “They don’t jump ship. They like the understated culture and ambience. They want to raise their children and are willing to forget a bit about convenience.”