Latest Northern Virginia Housing Market Numbers

Buckle up! Its a wild ride

Jan 06, 2023

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Northern Virginia Real Estate Market

The housing market in Northern Virginia, as well as around the country, has experienced a significant contraction over the past several months as interest rate hikes have pushed average monthly mortgage payments substantially higher.

The rate hikes combined with the record number of transactions in 2021 and the beginning of 2022 have led to a softening market, fewer listings, and generally lower prices.

The median sales prices in Alexandria City have dropped by almost 25% to $525,000 from October. Arlington County has seen its median price drop almost 10% to $586,500. Fairfax County has fallen about 2% to

$627,582. Loudoun County has dropped 4% to $627,500. Fauquier County has seen a small 0.5% drop to $462,450, while Prince William County is an anomaly and actually saw a 4% increase in median sold price to $500,000.

The average Days on Market for real estate listing has increased close to healthy, historical average levels after the red hot market of the pandemic era. Prince William, Loudoun, Fairfax Counties, and Alexandria City all have an average DOM of near their five year average. Arlington County’s DOM is 35 with a 29 day five year average, and Fauquier County is still a bit hot with a 21 average DOM with a 36 day five year average.

Some of the biggest changes in the most recent stats are the big drops in the number of new listings and closed sales. This is not at all surprising, as there have been so many transactions during the past few years.

Closed sales throughout Northern Virginia are down between 40% and 50% compared to November 2021. Again, this enormous drop speaks more to the previous inflated numbers rather than a lack of new sales now. In addition to the data, we are seeing an end to the trends of waived inspections and sight unseen offers well over the asking price, which has led to the excesses of the recent past and is actually very unhealthy for the market as a whole.

New listings are also down throughout the area, but there are a few minor anomalies. Prince William County’s new listings are down 30% from this time last year. Loudoun County is down 14%, Fairfax County is down 24%, Arlington County is down 25%, Alexandria City is down 17%, and Fauquier County is slightly down only 4%.

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Is the Worst Over?

On Friday, January 6th, we did get some economic data that again suggests that the worst of the interest rate hikes are most likely behind us. The December jobs report came in with slightly lower than expected job losses, but wage growth has significantly slowed, which is a terrific indicator of decreasing inflation.

Going forward, at least one more small interest rate hike is expected by spring, and the economy will likely experience the soft landing that the Federal Reserve has stated is their goal.

This will put mortgage rates right around their historical average, and the housing market will return to having a healthy balance of buyers and sellers. We are getting close to finally having a healthy balance between buyers and sellers, along with mortgage rates likely stabilizing near the historical average as well.

Northern Virginia and DC Real Estate Expert - Chris Colgan

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