Homes are selling quickly at nearly the full asking price in most Northern Virginia markets. That’s good. But what isn’t good is that overall sales are down and buyers are paying more than they might have expected. It’s all because there simply aren’t enough homes for sale.
In fact, Long & Foster reports that Northern Virginia’s residential real estate market continues to see double-digit declines in the number of properties for sale. As a result, median sale prices increased across most of the region in March, and homes were selling quickly at nearly full asking prices.
The number of homes sold overall in the Northern Virginia region decreased in March compared to the same month a year ago. Sales rose 12 percent in Alexandria and were up a percent in Loudoun County, but fell in other areas, while inventory declined by double digits across the region.
A “perfect storm” of market conditions is compounding an ongoing inventory crunch, said Larry “Boomer” Foster, president of Long & Foster Real Estate. Builders’ margins are squeezed by rising labor and materials prices, so they are not meeting demand for entry-level and move-up homes. Would-be sellers of existing homes, many of whom refinanced at low interest rates, are reluctant to list their homes because they aren’t finding the selection of properties they want to move into.
“There has never been a better time to sell,” Foster said. “People who have homes that are ready to go on the market are going to be getting top dollar.”
The right questions
He cautioned that for both buyers and sellers, it is important to ask the right questions before enlisting the help of a real estate professional. Find out what services they offer and their track record of results, he said.
For sellers, what is the agent’s ratio of final sale price to initial asking price, and how long are their clients’ homes on the market before selling? For buyers, how skilled is the agent at locating homes that might not even be on the market yet, negotiating a contract, and getting to the closing table in a reasonable amount of time.
“You might think you’re getting a deal with a discount broker, but it ends up costing more in the long run,” Foster said. “If you get a broker who isn’t good at negotiation, can’t navigate the process, doesn’t know the contract or the marketplace – they hurt everybody. They especially hurt the consumer.”