Today’s Crazy Market VS. That Of The Mid 2000’S
The news is spreading. Homes are once again selling like hot cakes and buyers are having a difficult time finding the perfect home for their family due to low inventory. The Northern VA area has become a sellers market over the last few months and buyers are once again in bidding wars for homes and doing everything possible to make their offers stand out.
With my latest listings I have seen buyers waiving appraisals and inspections. When you take a step back, it makes you wonder what is so different about today’s market from that of the mid 2000’s where home values were out of control.
And the answer is… Appraisals and lending restrictions.
The truth is that nothing can dictate or control the ebbs and flows of real estate values. However, much of the last market collapse can be blamed on the foolishness of under-regulated financing provisions. Since that time, the industry has arguable swung too far in the other direction, but the overall nature of real estate inflation has greater restraint. In other words… lenders have tighter guidelines on who they can lend to and appraisers are held to much tighter restrictions on over appraising a home.
Therefore, while we will see home values inflating over the next few months and possibly years, we can take some solace knowing that it is happening under a more watchful eye.