How do I know if it’s time to downsize?

Many empty-nesters and beyond debate that question almost daily. Residents often remain in their big homes almost by default – it can be hard to imagine a move. But ask yourself: “Will I be better off if I move? Will I get more out of life if I don’t have to maintain a large house? Could I use the extra time to travel, go to the theater or become engaged in that “cause” I have always wanted to? In short, is staying put actually holding me back from enjoying the things I have always envisioned for the next stage of my life?

For many, the answer is yes. Making a change in housing can be a step toward living life to the fullest.

Some tips for coming to the decision:

  • “Am I saving/storing these antiques from my parents and grandparents for my kids?” Reality is, the kids don’t want them. Just ask. Many want a small item to remember grandparents by, but their personal style is not a match.
  • “How do I get rid of my grandfather’s table or my mother’s china set?” Let go of the guilt. Keep one or two things that you actually use regularly – and let go of the rest. That still honors your ancestors.
  • “How do I know what I can keep after I move?” Best bet is to find the next home first, then do a little space-planning. After that, perhaps make a list of what you will not take, room-by-room, and email to your kids, family, friends. If they want any, ask them to come get it!

This type of move isn’t always for the faint-of-heart. Downsizing can take a team. Start with a good real estate agent who can help you explore the homes that represent your next lifestyle – whether a townhouse, condo, apartment or even assisted living if health changes require it. Then comes the team – move managers, de-clutterers, charities for donations, vendors to prep the former home for sale. That good real estate agent will help manage the whole move.

Want to brainstorm? Call me to get the conversation started.


Absorption Rates and Sell-by Dates

Determining the appropriate list price for a home or figuring what to offer is equal parts art and science. The “art” has a lot to do with the motivation and level of risk tolerance of the parties, as well as the degree of emotional attachment to the outcome. The focus of the “science” has typically been on knowing overall market and financing conditions, and picking the most “comparable” properties to see how the subject property stacks up. Unsurprisingly, there’s a lot more to it than that.

Among the factors to consider are absorption rates and what we call “sell-by” dates. Absorption rates simply measure the percentage likelihood a property will sell in a given month. Absorption rates above 35% are reflective of a seller’s market, and rates less than 20% create more leverage for buyers. Anything in between indicates a more balanced market. Sell-by dates reflect how much of the inventory sells before list price reductions are needed. Generally, when homes sell quickly they sell closer to list price, and the discount from the original list price is greater the longer they are on the market. Let’s look at some specific examples.

We analyzed the contract activity for detached homes with a list price of $800,000 to $899,999 from July through October for three communities in the metro area: Great Falls, Virginia, Bethesda/Chevy Chase, Maryland and the Spring Valley/American University Park area of Northwest DC. Great Falls had the lowest absorption rate at just under 20%, meaning that of all the inventory of available homes, only 20% on average sold in a given month. The average number of days a home was on the market before getting a contract was 37. Advantage: Buyers. At the other end of the spectrum, almost two thirds of the available inventory sold each month in Spring Valley/AU Park. The average days on the market was a remarkably low 10 days. Advantage: Sellers.

The “sell-by” date is the threshold for considering a list price reduction. In Great Falls, homes that sold in 30 days or less sold for an average of 99% of the original list price. Those that sold after 30 days on the market sold for an average of 92% of original list, and almost all had to lower their price before receiving an offer.

In Bethesda/Chevy Chase, homes selling in 21 days or less sold for 99% of original list; those that took longer sold for just 94% and all but one had to drop their list price.

In the hotter Spring Valley/AU Park market, homes on the market 25 days or less sold for 105.5% of list price, but after 25 days the average dropped to just 94.3%.  Even in this market, 75% of sellers had to drop their list price to receive an offer after their home had been on the market for 25 days.

Despite very different pricing dynamics in these markets, sellers need to understand there is a critical window of opportunity to sell for the highest price. And buyers understand that if they wait for the inventory to “age” a bit, they might be able to drive a harder bargain.


  • The month-end inventory decreased 9.6% for October 2017 compared to October 2016 – but the number of homes coming on the market increased 3.6%.
  • Inventory is down for all price categories.
  • 43.7% of all homes on the market have had at least one price reduction since coming on the market.
  • Last October, 42.6% of all homes on the market had at least one price reduction.


  • The overall supply of homes on the market at the end of October was 2.3 months, which was a decrease of 12.9% compared to the end of October 2016, when supply stood at 2.6 months.
  • Price category supply ranges from a low of 1.4 months for homes priced between $300,000 and $499,999 and a high of 10.7 months for homes priced $1,500,000 and higher.


  • As we have noted in this space for years, initial pricing strategy is critical to sellers’ success.
  • Homes settling in October 2017 that received contracts their first week on the market sold, on average, at original list price. Those that took 4 months or longer to sell sold for 9.7% below original list price.

McEnearney Associates “Market Watch: Northern Virginia”

Champagne, baths – and real estate

Bubbles are great to have in champagne, baths, and a host of other things, but they are not good for the real estate market.

A real estate bubble generally is caused by unjustified speculation in the housing market that leads to a rapid and unsustainable increase in prices. When it bursts, prices decline quickly – often to levels lower than when the run up in prices began. The whole country experienced a painful bursting bubble almost a decade ago, and its impact was felt far beyond the real estate market.

There is no doubt that home prices have risen significantly in the metro area during the past several years and affordability, especially for first-time homebuyers, is a real concern. But are we in a bubble? The short answer is no.

From 2002 through 2005, home prices in the Washington, D.C. metro area skyrocketed. Demand was artificially high, driven by ridiculously low “teaser” interest rate mortgages. Prices were up 14% in 2002, 15% in 2003, 20% in 2004 and 21% in 2005. Since mortgage underwriting guidelines were essentially non-existent, more and more buyers rushed into the market to buy homes they could not afford, with the expectation they could cash in their gains later.

When those artificially low adjustable rate mortgages started to adjust and guidelines tightened, demand plummeted. There was a 40% drop in the number of home sales in 2009, compared to the peak in 2005. At the same time, the market was flooded with new inventory as homeowners rushed to sell homes they could no longer afford. With the enormous drop in demand and the jump in homes on the market, prices dropped almost 15% in 2009. Prices only started to head back up in 2012.

None of those supply and demand conditions exist today.

Let’s take a look at demand. There are three basic ways to increase the desire for housing: an upturn in economic activity, an increase in population and generally low interest rates. To a large degree, all three of those exist today. The region’s economy is doing pretty well, especially in The District. Further, the region has grown by one million residents in the last 14 years. Finally, low mortgage interest rates have created an extremely attractive environment for prospective home purchasers, and yet, demand has not exploded. The number of home sales this year in the metro area will be virtually identical to the number that sold in 2003. There have been significant demographic shifts – people are waiting longer to marry and form households, and student loan debt makes it harder for many to buy their first home. And despite those low interest rates, it is harder to qualify for a loan. In short, demand is reasonable, and it not being fueled by speculation.

On the supply side, inventory of available homes is at a historic low. Just as buyers are waiting longer, homeowners are staying put longer. Nationally, the median number of years sellers have been in their homes has risen from six years in 2000 to 10 years today. New construction isn’t keeping pace with household formation.

Low inventory has certainly contributed to increasing home prices, but even in the hottest market area in The District, annual appreciation rates have been between 6% and 8% during the last three years. It is far lower in the suburbs. If demand were greater, the lack of inventory would have pushed prices much higher.

Markets seek balance over time, as long as they are not artificially stimulated or restricted. The hottest areas in our region are due for an adjustment because 6% to 8% appreciation isn’t sustainable forever. In our more suburban markets, current appreciation rates are in line with historic norms. And we know that eventually, mortgage interest rates will climb, and that will ease some of the upper pressure on home prices. We believe the inevitable market adjustment will come in the form of lower appreciation rates, not a drop in prices.

— David Howell, McEnearney Associates Chief Information Officer

Millennials feel the pinch: The impact of rising mortgage rates

As millennials are entering their prime as homebuyers, they are feeling the pinch between very low inventory for entry-level priced homes and rising interest rates in the metro DC market.

Continue reading “Millennials feel the pinch: The impact of rising mortgage rates”

Guest Post: Spring cleaning tips from Rescue Me Cleaning

Rescue Me Cleaning co-owners Dawn and Geoff Crawley

Moving to Reston is interviewing members of the community who are a part of small businesses that serve the Reston area. Up next is Dawn Crawley of Rescue Me Cleaning (previously known as Champagne Services), a chemical-free, organic house cleaning company.

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What are the up-front costs associated with buying a home?


The spring real estate market is here, and with all the buyers out there, I thought I’d put together a series of posts covering the various topics addressed during the purchasing process. The first in this series is what the up-front costs are in purchasing a home.

Continue reading “What are the up-front costs associated with buying a home?”

Around Reston: Meet Caliber Home Loans’ Scott Silverstein

Scott Silverstein, Caliber Home Loans

Moving to Reston is interviewing members of the community who are a part of small businesses that serve the Reston area. Next up is Scott Silverstein, a loan consultant with Caliber Home Loans.

Continue reading “Around Reston: Meet Caliber Home Loans’ Scott Silverstein”