Annandale REAL ESTATE
It's Getting Interesting
By: Scott Pearson, Pearson Realty
July 2018, ENDEAVOR News Magazine
Everyone that tracks the real estate market should be aware that interest rates are rising and based on the statements from the Federal Reserve rates will likely rise two more times this year. What that means is that our era of historically low interest rates is over and that rates will likely creep up to an average 5.5% for home mortgages.
Meanwhile, due to the nagging problem of low inventory, the price of a home is also increasing. That means we are being confronted by a series of financial conditions that will both benefit and be a challenge for both home owners and businesses in Annandale. Starting with home buyers, the cost of buying a new home is increasing at the same time that the cost of financing is increasing. That may push some buyers to rethink what size house and what locations are still within their budget.
Fortunately for Annandale residents it means that some buyers who might have insisted on an Arlington address, close to Metro, will now consider buying in Annandale where home prices have always been relatively reasonable. If they do, those buyers will be pleasantly surprised to discover that Annandale’s geographic location is one of the most convenient in all of Northern Virginia. There is a reason Annandale is known as the, “Crossroads of Northern Virginia.”
For sellers the challenge will be patience as higher interest rates are absorbed. The pool of buyers for your house might be reduced due to greater financial challengers on buyers. Whether this circumstance is offset by a low inventory of houses for sale is not yet known, but it could be a factor, particularly for higher end homes.
Additionally, people who are staying put will feel the effect of higher tax assessments coupled with a higher tax rate. On average, homeowners in Annandale should see an increase in property taxes of about $300 a year. Note: Senior residents should check into the County’s tax relief program for seniors on a fixed income.
Finally, the assault on the deduction for local, state and property tax to reduce homeowners’ adjusted gross income may create a burden for homeowners that is not offset by other recent changes to the tax code. Perhaps the dullest document ever written, the U.S. Tax Code, is incomprehensible to most people. Seek some personal, professional advice to determine what is the best course to take given your individual circumstances.
The era of cheap money is coming to an end for homeowners and businesses as the prime rate creeps up for commercial lending as well. This does not mean that rates are not low historically and certainly there is no panic over these changes. But the effects will be felt in everyone’s wallet and it is best to learn more and be surprised less.
On a personal note, we have moved our offices to 7006 Little River Turnpike. We are proud to be a part of the Annandale business community and will continue our support for its residents and the local business community.
Median Sales Price of Annandale Homes
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