You can’t sell what you don’t have. That just about sums up the Northern Virginia real estate market at the moment, according to the Northern Virginia Association of Realtors (NVAR), which blames limited housing inventory for flat sales in July.
“Sales and prices in our NVAR region were relatively flat last month,” said Christine Richardson, NVAR president. Median and average prices were about 1 to 2 percent higher than in 2018, and the total number of sold units were around 1 percent above last July, with buyers paying 99 percent of asking prices, on average.
“In the ‘Amazon Area’ covering Arlington County and Alexandria, the big changes over last year were in average time on the market and the number of active listings,” Richardson says.
Homes in Arlington sold an average of 40 percent faster than last July. In Alexandria, the average number of days on the market was about 53 percent below July 2018. Arlington County and Alexandria both showed a year-over-year decrease in the total number of units sold, at -9.52 percent and -17.03 percent respectively.
“Those decreases reflect significant reductions in the number of available homes for sale compared to last year. Arlington County inventory fell by about 57 percent, and Alexandria had about 56 percent fewer homes for sale in July. What we need now are motivated sellers,” says Richardson.
This past July, Realtors in Northern Virginia closed on transactions worth $1,380,553,285, which was 2.36 percent above the July 2018 sold dollar volume of $1,348,735,532. Year to date at the end of July, closed sales in the NVAR region totaled $7,909,921,972. The NVAR region includes Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton.
Fairfax County led the NVAR footprint for the number of July year-over-year units sold, which were up by 6.53 percent, to 1,680.
“Across the region, total dollar sales volume is up, and homes are selling more quickly. This clearly shows activity is there, prices are stable and demand is strong,” says NVAR President-elect Nicholas Lagos of Century 21 New Millennium in Arlington.
With the recent drop in average 30-year fixed mortgage rates, to 3.6 percent as of August 8, according to Freddie Mac, buyers are eager to lock in favorable terms.
“We’ve certainly experienced an uptick in refinancing activity, and I’m sure the recent lowering of the fed funds rate has contributed,” says Fred Westerlund, CEO of MBH Settlement Group and chairman of the NVAR Real Estate Finance and Settlement Forum. Westerlund believes that the rate cut isn’t deep enough to significantly impact affordability. “Our biggest challenge remains inventory,” says Westerlund.
There is plenty of opportunity for potential sellers in this market. “The hope is that sellers recognize there are eager buyers who could qualify to borrow more right now than they might when rates rise again,” says NVAR CEO Ryan Conrad. “Perhaps this will motivate some sellers to make a move now instead of waiting to see if prices will continue to climb,” Conrad says.
Lagos says that for the most part, it is still a sellers’ market in most areas, particularly those closer to the District.
“With the very buyer-friendly interest rates, it seems that will only continue to drive the demand for housing – with a realization that a buyer needs to be prepared and act quickly if a home shows well and is well priced,” Lagos says.