According to the December 2022 Virginia Home Sales Report, released by Virginia REALTORS®, following two very busy years in the housing market, Virginia’s market slowed considerably in 2022. There were about 123,000 homes sold in Virginia in 2022, which is 20% fewer than the annual total in 2021. In December 2022, 7,492 homes were sold statewide, a sharp drop of nearly 38% from the same time last year. The rapid rise of interest rates over much of 2022 played a significant role in the slowdown. In all, 87% of counties and cities in Virginia had fewer home sales in 2022 compared to 2021. From an annual perspective, statewide sales activity is back to pre-pandemic totals, near market levels seen in 2018.

Affordability continues to be an issue for many home buyers as mortgage rates have risen a lot in the last year, home prices continue to rise, and inventory remains low. Many are looking for alternative ways to cut down on costs while also trying to keep the dream of owning their own home alive. One of these tactics that has recently returned in popularity is a temporary buydown or mortgage buydown, a home selling strategy that was big in the late 1970s and early 1980s. Some home buyers may be wondering what is a buydown and is it the best option for me? Let’s take a deeper dive to answer these questions. What is a Interest Rate Buydown? A mortgage rate buydown is when a borrower makes a lump sum payment at closing to obtain a lower interest rate for the first few years of the loan. This payment is sometimes called mortgage or discount points which are used to make up the difference between the current rate and discounted rate. Many lenders and home sellers are offering mortgage buydowns as an incentive for would-be home buyers looking to save money in the first few years of ownership. Different Types of Mortgage Rate Buydowns Mortgage buydowns can be temporarily used to reduce mortgage payments at the beginning of the loan or throughout the life of the loan. The most common method used by lenders is the 2-1 buydown, which allows buyers a discounted rate for the first two years of the loan. An example of this is if I buy a home for $300,000 and the current interest rate is 6%, with a 2-1 buydown I would pay an interest rate of 4% the first year, 5% the second year, and then the full standard rate of 6% from the third year until the end of the loan term. The cost for this discounted rate varies based on your loan amount but is typically 1% of the loan. Using the example above with a reduced interest rate of 2%, approximately $6,000 would need to be paid at the time of closing. This would mean $6,672 would be saved in the first two years of ownership. The 1-0 buydown is also a popular option used by mortgage lenders and lowers the interest rate by 1% the first year of the loan. Lastly, the 3-2-1 buydown allows buyers to lower their rate by 3% the first year of the loan, 2% the second year, and 1% in the third year. Buyers can also obtain a permanent buydown meaning that the interest rate would stay the same over the course of the loan resulting in greater savings over time but with a heftier buydown cost at closing. Positives and Negatives Buying down your interest rate saves you money on your monthly mortgage payments so that you have more funds to dedicate to furnishing or repairing anything in your home. If it is offered as a concession from a seller, it may help qualify you for your home loan and could be used as a tax deductible. If you are unable to get seller concessions for the cost, the downside is that your closing costs will increase so there may not be enough money left for a down payment. You could also potentially lose money if you decided to sell or refinance the home.  Mortgage rate buydowns can be a helpful tool for those looking to save money at a time when prices are high and mortgage rates are above 6%. Before jumping in, buyers should consider several factors, such as how long they will be staying in their home, if they want to refinance, and the upfront cost of the buydown.

Updates for RVAR Contracts

It’s competitive out there! To achieve and sustain success and credibility, REALTORS® are tasked with thinking outside the box to stand out among a sea of talented colle agues. Here are 5 ideas to help YOU stand out when the market seems flooded with agents. Find Your Specialty Are you interested in development? Maybe you have a knack for finding and working with foreclosures. Whatever it may be, having a specific type of home you typically go for can help you stand out from other REALTORS®. You could be the go-to condo agent in your area, making clients refuse to go to anyone else if this type of sale is what they need. You don’t need to choose just one, but you could think about narrowing down your interests and spreading the word about what type of real estate is best for you. Be an Expert Whether you are fresh to the career or a seasoned veteran, it can be helpful to brush up on all there is to know about real estate whenever you can find some down time. Virginia REALTORS® supplies economic blogs with insights on the latest market trends specific to Virginia. You can also take part in our  continuing education options. It’s also always a great idea to keep up with the latest episodes of our legal podcast, Caveat REALTOR® . These concise episodes are informative, easy to digest, and entertaining! Subscribing will keep you in-the-know on all updates related to new laws and standard form changes. When you are a REALTOR® who can provide the latest market insights, clients will be more inclined to seek out your services. Have an Online Presence Whether it be a personal website or social media business pages, you need to be online to make your reach go even farther. Make sure you keep your website or pages up to date, and try to be as responsive as possible so potential clients have another way to get in touch. Those that would like to work with you in buying or selling a home can get to know and trust you before even reaching out. Build Your Community Get your name out there! You are likely part of a specific area or community in which you focus your time and efforts. You can always be working to spread the word about your business or market yourself to people in your town you haven’t yet met. Host a fundraiser, hand out goodies at a local event, or leave your marketing items at businesses that agree to help. These seemingly small tactics can result in a lasting impression on future clients. Be Flexible and Responsive While you should always prioritize your time and make sure you take care of yourself, it’s important to also be flexible for your clients. If your schedule is more accessible than the next agent, clients are going to choose you as their REALTOR®. It’s also important to be as responsive as possible. Sales are moving quickly, and clients are asking questions and needing advice, so it’s imperative that you answer in a timely manner so they feel confident you are there for them. If you need to set some boundaries for your own well-being, choose a few hours where you can put your phone on “do not disturb”, and let your clients know about these hours. Take a moment to stop and check-in to see if you are doing these 5 key things to stay on top of the game and get the most out of your market.

According to the December 2022 Virginia Home Sales Report, released by Virginia REALTORS®, following two very busy years in the housing market, Virginia’s market slowed considerably in 2022. There were about 123,000 homes sold in Virginia in 2022, which is 20% fewer than the annual total in 2021. In December 2022, 7,492 homes were sold statewide, a sharp drop of nearly 38% from the same time last year. The rapid rise of interest rates over much of 2022 played a significant role in the slowdown. In all, 87% of counties and cities in Virginia had fewer home sales in 2022 compared to 2021. From an annual perspective, statewide sales activity is back to pre-pandemic totals, near market levels seen in 2018.