Home sales increased across most of the Northern Virginia region in April, according to the Long & Foster Real Estate Market Minute report. Alexandria City saw the highest increase with a 6% rise. Loudoun County was the only county to demonstrate a decrease with a 12% fall, while Prince William County exhibited no year-over-year change.
Median sale prices also increased throughout the region, with Arlington County having the biggest increase of 16%. Inventory continued to fall throughout the region with decreases ranging from 61% in Alexandria City to 18% in Fairfax and Loudoun counties.
“The market is more of the same,” said Larry “Boomer” Foster, president of Long & Foster Real Estate, “inventory is still contracting, with Arlington County down 48% in number of homes on the market right now and Alexandria City down 61%.”
Foster attributes this to the continuing Amazon effect, with many rushing to buy homes close to National Landing. When looking at the median sale price increases, it leads Foster to believe there is healthy growth and “that we’re in a good place, besides the fact that there’s not a lot of product to sell.”
Builders’ margins squeezed
When discussing the tariffs imposed upon Chinese imports, Foster noted they’re causing a squeeze on builders’ margins. “When you combine an increase in material costs with an increase in wages for skilled workers, plus land appreciating, there’s downward pressure on builder’s margins,” he said. “Builders account for this by building bigger homes as they’ll get bigger margins for that.”
This is not helping the inventory problem however, as most consumers are looking for entry-level or first-time buyer homes. When it comes to new construction homes, Foster mentions how most consumers don’t think about what construction materials cost. “They look at a house and what it costs and what it’s going to cost per month and whether or not they can afford it,” he said. Their awareness of how tariffs affect the price is not at the forefront of their mind.
Should consumers choose to buy a new construction home, Foster explained the benefits of having an agent. “The process is different, and you need somebody who’s going to understand what you’re getting yourself into,” he said. “Contracts for new construction homes are very intense, typically one-sided and written to be in favor of the builder. Having somebody that’s well-versed in the process and able to walk you through the financing and closing process is essential to getting the most value for your money.”