Northern Virginia and Washington DC Housing Market is out of control!!

Rates are DROPPING

Dec 27, 2023

Home Buyers and Interest Rates

One of the key findings from the survey is that 78% of Realtors had buyers who decided not to purchase a home after actively looking for one. When asked why, 72% of these buyers cited high interest rates as the main reason, while 34% mentioned the lack of inventory, and 17% mentioned affordability. This tells us that interest rates play a crucial role in the decision-making process of home buyers.

At the beginning of November, interest rates were hovering around 8%. However, as we approach the end of December, they have dropped to 6.5%, with some rates as low as 5 .9%. This significant decrease in interest rates may motivate more buyers to enter the market and consider purchasing a home.

Home Sellers and Interest Rates

On the seller side, approximately 40% of real estate agents reported meeting with sellers who decided not to sell their homes because they couldn't afford or didn't want to give up their lower interest rates. However, when looking at the sellers who actually went through with the sale, 90% of them said they had to sell regardless of the interest rates. This could be due to various reasons such as a death in the family, a job transfer, or financial constraints. As a result, the low inventory in the market can be attributed to the reluctance of many homeowners to move up to a larger home or a different type of property due to the fear of higher interest rates.

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The survey also highlighted the potential impact of interest rate reductions on sellers. For the Northern Virginia area with a median sales price of around $410,000, a decrease in interest rates from 8% to 7% would result in a monthly savings of $250 on mortgage payments. With interest rates dropping further to around 6%, sellers may be more motivated to put their homes on the market and pursue their desire for a larger home. This reduction in interest rates could potentially bring more sellers off the fence and increase the inventory in the market.

Market Statistics for Washington DC

In Washington DC, the market has experienced a slowdown. New listings are down by 21%, with only 652 homes coming on the market. However, new pendings have increased by 6%, indicating that there is still some activity in the market. Closed sales, on the other hand, have decreased by 10%. The median sales price in DC has also seen a slight decline of 1.6%. The market for condos and duplexes in DC remains active, with 8,879 active listings. The average days on market in DC have reached a 5-year high at 37 days, and sellers are getting 96% of the asking price.

Market Statistics for Arlington County

Arlington County, known for its job market and popularity among out-of-state movers, has seen a decrease in new listings by 17.7%. However, new pendings have increased by 99.5%, indicating strong buyer interest. Closed sales have remained relatively stable year-over-year. The median sales price in Arlington County has increased by 21%, reaching $772,000. Active listings in Arlington County are at a 5-year low, with an average of 304 days on the market. Sellers in Arlington County are getting 98.7% of the asking price.

Market Statistics for Alexandria

Alexandria, a city that could potentially be the future home of the Wizards and the Capitals, has seen a decrease in new listings by 40%. Despite this, new pendings have remained steady, indicating a high demand for homes in the area. Closed sales have decreased by 2%. The median sales price in Alexandria has increased by 133%, reaching $595,000. Active listings in Alexandria are at a 5-year low, with an average of 26 days on the market. Sellers in Alexandria are getting 98.9% of the asking price.

Market Statistics for Fairfax County

Fairfax County, the largest county in Virginia, has seen a significant decrease in new listings by 32%. New pendings have also decreased by 21%, and closed sales have decreased by 13.3%. Despite these decreases, the median sales price in Fairfax County has increased by 5%, reaching $660,000. Active listings in Fairfax County are at a 5-year low, with an average of 18 days on the market. Sellers in Fairfax County are getting 99.2% of the asking price.

Market Statistics for Loudoun County

Loudoun County, one of the most popular and affluent counties in the United States, has seen a decrease in new listings by 20%. New pendings have also decreased by 11%, indicating a slight slowdown in buyer activity. Closed sales have decreased by 5%. However, the median sales price in Loudoun County has increased by 15%, reaching $725,000. Active listings in Loudoun County are slightly below their 5-year average, with an average of 18 days on the market. Sellers in Loudoun County are getting about 99% of the asking price.

Market Statistics for Prince William County

Prince William County, known for its affordability compared to neighboring Fairfax and Loudoun counties, has seen a decrease in new listings by 14%. New pendings have also decreased by 11%, indicating a slight slowdown in buyer activity. Closed sales have decreased by 10%. The median sales price in Prince William County has increased by 4%, reaching $529,000. Active listings in Prince William County are slightly below their 5-year average, with an average of 19 days on the market. Sellers in Prince William County are getting 99.3% of the asking price.

Market Statistics for Stafford County

Stafford County, located in the Fredericksburg area, has seen a decrease in new listings by 30%. New pendings have also decreased by 12%, indicating a slowdown in buyer activity. Closed sales have decreased by 25%. The median sales price in Stafford County has remained relatively stable, with a slight increase of 1% to $499,000. Active listings in Stafford County are below their 5-year average, with an average of 21 days on the market. Sellers in Stafford County are getting 98.5% of the asking price.

Conclusion

The real estate market in Northern Virginia and Washington DC has experienced some interesting trends. While there has been a decrease in new listings and closed sales in most areas, there is still strong buyer interest and high demand for homes. Interest rates play a significant role in the decision-making process of home buyers, with high rates being a deterrent for many. However, the recent decrease in interest rates may motivate more buyers to enter the market.

In Washington DC, new listings are down by 21%, but new pendings have increased by 6%, indicating some activity in the market. Arlington County has seen a decrease in new listings by 17.7%, but new pendings have increased by 99.5%, showing strong buyer interest. Alexandria has experienced a decrease in new listings by 40%, but new pendings have remained steady, indicating high demand for homes.

Fairfax County, the largest county in Virginia, has seen a significant decrease in new listings by 32%. Loudoun County, one of the most popular and affluent counties in the US, has seen a decrease in new listings by 20%. Prince William County, known for its affordability, has seen a decrease in new listings by 14%. Stafford County, located in the Fredericksburg area, has seen a decrease in new listings by 30%.

Despite the decrease in new listings, the median sales prices in these areas have generally increased. In Arlington County, the median sales price has increased by 21% to $772,000. In Alexandria, the median sales price has increased by 133% to $595,000. In Fairfax County, the median sales price has increased by 5% to $660,000. In Loudoun County, the median sales price has increased by 15% to $725,000. In Prince William County, the median sales price has increased by 4% to $529,000. In Stafford County, the median sales price has remained relatively stable at $499,000.

Overall, the real estate market in Northern Virginia and Washington DC remains active, with strong buyer interest and high demand for homes. The recent decrease in interest rates may motivate more buyers to enter the market and potentially increase the inventory. Despite the decrease in new listings, the median sales prices in most areas have increased, indicating a strong seller's market. It is important for buyers and sellers to stay informed about the market trends and work with a knowledgeable real estate agent to navigate the current conditions.

In conclusion, the real estate market in Northern Virginia and Washington DC is experiencing some interesting trends. While there has been a decrease in new listings and closed sales in most areas, there is still strong buyer interest and high demand for homes. The recent decrease in interest rates may motivate more buyers to enter the market. It is crucial for buyers and sellers to stay informed about the market conditions and work with a trusted real estate agent to make informed decisions.

Chris Colgan - EXP Realty Powered by Place

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Northern Virginia and DC Real Estate Expert - Chris Colgan