The Northern Virginia Housing Market is the Wild West again
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February Northern Virginia Market Report
The Northern Virginia real estate market continues to pick up after several down months in 2022. Inventory has decreased, and many houses in the area are selling with multiple offers above the asking price.
While we are nowhere close to the levels we saw in 2021, the market has stabilized, shaking off higher interest rates and fears of a slowing economy.
Tightening Inventory in the Region
The market did come to a near standstill late last year, but in the past few weeks, more buyers have entered the market, and we are actually seeing a tightening in inventory throughout many areas of Northern Virginia.
Active Listings are all relatively close to the 5-year averages in each county, indicating both the high and low extremes of the past three years are behind us.
Average Days on Market (DOM) are mostly in the range of the five-year averages as well, again indicating that the buyers have stepped back in and are purchasing homes. Fauquier County had a 41 DOM for January, Arlington County was 40, Fairfax was 35, Prince William was 39, Stafford was 42, Loudoun was 37, and Alexandria City was 39.
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Prices are Rising Again
Median Sold Price was higher throughout the region as well. Loudoun County had a Median Sold Price of $653,456, up almost 12% from a year ago. Alexandria City was $572,450, up over 15%. Stafford County was $464,900, up over 5%. Prince William County was $474,999, up 3.4%. Fairfax County was $610,000, up 6%. Fauquier County was $540,000, up 13%, and Arlington County was $636,500, up 2.7% from a year ago.
Most notable is the price increase just in the last month in several areas. Arlington saw a whopping 21.1% increase in the past month, Fauquier County saw a 19% increase, and Loudoun County saw a 6% increase.
New Listings are down from a year ago throughout most of the region as well, again indicating a somewhat limited supply of houses and pushing up prices.
All Eyes Still in Interest Rates
Some of the slowdown has been attributed to the rising interest rates from the Federal Reserve Bank. While most economists predict at least one and most likely two more rate hikes from the Reserve Bank will happen in the remainder of 2023, mortgage rates have leveled off some, even seeing a small decline in the past few weeks.
While rates are higher, by historical standards, they are still right around their average, so rates will unlikely hinder the real estate market for the foreseeable future.
Looking out into 2023, as we head to the spring and summer months when the real estate market tends to pick up, we should have a very healthy market with a good balance between buyers and sellers. The frantic buying we saw during some of the pandemic months is long gone, and the fears of higher interest rates and the dearth of qualified buyers of the past few months have waned as well.
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