As a residential appraiser working in Woodla Manor, I use statistical modeling everyday to support adjustments in value. Multiple Regression Analysis helps me determine the added value of a Woodlea Manor home for such things as a third bathroom, a finished rec room, or an updated kitchen. When I complete a residential appraisal for a lending institutions, the adjustments that I make on a property have to be supported. Although an appraisal is an opinion of fair market value, the adjustment shouldn’t be opinions at all but rather supported with market derived data.
I also use statistical modeling, specifically “regression to the mean”, to forecast the future market of many of the larger neighborhoods in Loudoun, Fairfax and Prince William counties. Woodlea Manor is one of the neighborhoods in Loudoun County that I study closely and forecast future market trends. As an agent, this gives me a clearer picture of the market conditions and allows me to price my client’s home appropriately, and ultimately, sell it more quickly. Regression to the mean is a statistical phrase that refers to the tendency of a random variable that is highly distinct from the norm to return to “normal.”
In real estate, this concept means that no matter how good or how bad the real estate market gets, we know that over time it will return to “normal.” So, what is normal for the Woodlea Manor market?
Adjusting for the years between 2005-2007, where there was hyper-appreciation, homes in Woodlea Manor have appreciated an average of 5% to 7% annually over the past 15 years. A typical year will have approximately nineteen settled sales with a list to sales price ratio of 96%. Historically the average “Days on Market” in Woodlea Manor is 73 days. I expect values to be in line with this 5% to 7% appreciation in the coming year, but the days on market to be closer to thirty days for homes that are priced appropriately. Pricing your Wooldea Manor home appropriately is one of the most important factors to achieving a successful transaction.
What is the one thing to watch for that could have a major impact on our market here in Woodlea Manor as well as the overall real estate market in the U.S? Interest rates! Interest rates directly influence purchasing power and the rise of one point on a 30 year mortgage will mean a decrease of almost $40,000 in purchasing power. It’s entirely possible to see stagnant values in 2016 if interest rates rise significantly. As of January of 2016, the Federal Reserve has decided to raise the Federal Funds rate. This is the interest that the Fed charges banks for short term loans. What we can expect to see for loan term rates is harder to determine. Thirty year fixed rate loans are typically influenced by the ten year treasury bond. This has been relatively stable and there has been very little movement in the rates for home loans. In fact, the rates for at thirty year loan have actually gone down in the weeks following the Federal Reserve raising their rates. If you would like additional information regarding the Federal Reserve and how it effects interests rates you can visit this website.
If you are in the planning stages of selling your Woodlea Manor home, I would appreciate the opportunity to be your agent. Remember, it is imperative to get the listing price right the first time to be successful in receiving the full value of your home in a timely manner. As an active Certified Appraiser and real estate agent, I can assure you that working together we can achieve a successful transaction.
If would like to learn more about Woodlea Manor or view homes that are currently on the market, visit my Woodlea Manor page. I am always available to discuss the local market and answer any questions you might have about buying or selling a home in Northern Virginia.