Homes sales increased in several parts of the Northern Virginia region in January, according to the Long & Foster Real Estate Market Minute report. Arlington and Prince William counties both experienced an increase of 4 percent, while Loudoun County took a dip with a decrease of 12 percent.
Median sale prices also increased throughout most of the region, except for Alexandria City which saw a decline of 12 percent. Inventory continued to fall, ranging from a 48 percent decrease in Alexandria City to a 10 percent decrease in Prince William County.
“Our January report reflects how hyperlocal the market is in and around Washington, D.C.,” said Larry “Boomer” Foster, president of Long & Foster Real Estate. “There were some surprisingly good reports for Arlington, Fairfax and Prince William counties, where we saw increases in units sold.”
Foster said while they knew the government shutdown would have an impact on sales, it’s likely that it wasn’t as large of an impact as anticipated.
“Another interesting anomaly for January was that inventory has started to slow in its contraction in a lot of places, but Arlington County and Alexandria were down 38 percent and 48 percent, respectively,” Foster said. “I believe that’s a reflection of properties that were purchased due to the Amazon effect in December. The huge influx of purchasers that came into the marketplace in both of those places caused December unit sales to be up about 30 percent and now inventory is significantly lower.”
The housing affordability index also improved recently, and Foster noted that while the index has typical seasonal fluctuations, there are three factors that influence those fluctuations.
“The three things looked at in the housing affordability index are mortgage rates, appreciation of homes, and people’s ability to pay – or wages,” Foster said. “When these things come together in the right way, it leads to more affordable housing, though that normally happens this time of year anyway.”
Although mortgage interest rates are expected to increase this year, industry experts lowered their predictions and they continue to remain down.
“I don’t expect that to be a trend moving forward,” Foster said. “We’ve avoided another government shutdown and investors are becoming more confident around U.S./China trade talks. We’ll see money shift out of Treasuries and into equities, which will cause the yield on the 10-year Treasury bond to go up within the next few weeks, unless something else happens in the world economy.”