Local Outlook is All that Matters: Inventory Down, Prices Up

As I’ve been saying for months – the Northern Virginia market is totally in a seller’s market. The only price range not fully recovered is the over $1 million price range. Every other price range from the $100,000 condo to the $700,000 single family is selling like the proverbial hot cake. Fresh off the griddle, and ready for the butter and syrup. And therein lies the problem – or should I say, opportunity.

When it comes to housing data, sales prices, inventory levels, pending sales, etc., it doesn’t matter what’s happening across the country when you’re looking for a house in your locality. All that matters is what’s happening in the market where you want to sell or buy. It doesn’t matter that foreclosures are slated to increase nationwide when they are selling like hotcakes in Fairfax, VA.

The challenge for buyers in Northern Virginia is they have little inventory from which to shop. As a result - the bonus for sellers is that prices are on the rise. Not year over year, mind you, but month to month, they are definitely on an upward ascension.

Since January 2009, the overall average sold price has increased 15%. The average price in January was $376,669. In May the average price tapped at $433,257. (Source: Metropolitan Regional Information Systems, Inc.) Is this a trend? Well, consider this: the last time we had a 4-month, month-over-month increase in sales prices was in 2006. (At that time, by the way, the average price hit $553,618).

Why is this happening?
* Foreclosures rates are dropping in Virginia (Source: George Mason University, Center for Regional Analysis)
* The inventory is beginning to include private-seller owned properties (instead of banks), stopping the price drops and pushing them forward and upward.
* Buyers are taking advantage of the affordable housing prices, the historic interest rates and the First-Time Buyers Tax Credit (up to $8,000) before it expires November 30, 2009. (But there’s talk on Capitol Hill to extend the sunset period.)

So what? What does this mean to you? Buyers get in line. You will be competing for well-priced homes now. We have multiple offers in all price ranges. (The highest I’ve heard told of so far is 23 offers in a weekend).

Sellers, get ready to sell quickly if you are priced competitively and start using home of choice clauses and ready to move into your new home sooner. (The higher up you move in price, the more inventory that’s available). You have the opportunity to move up into your bigger home for a smaller price for the home and a smaller interest rate for the loan.

HELP! WE NEED LISTINGS!

This post is going to be very local in nature - Northern Virginia readers -- we need houses to sell! The market has turned on a dime and sellers are now starting to get their asking price, (or 10s of thousands more -- see Steve's comment on last posting); entertain multiple offers and move up to their next house with very cheap loans.

Are you ready to sell? Who do you know that's ready to sell? Please respond asap so we can catch this upsurge for you, get your home sold and move up to that next great home that you can buy with interest rates that even you grandparents haven't seen! (Lingering today under 5%).

The whole Northern Virginia market is down to a 2.0 months' supply -- that's deep in seller market territory. For price ranges under $500,000 it's even less than 2 months!

Call me today, please! (703) 819-9800. I need the lead!

Home Sellers Market Returns in D.C.

If you’ve been waiting for the Seller’s Market to return – wait no longer! In the first quarter of this year, several towns and counties in Northern Virginia have entered the Seller’s Market territory with less than a 3-month supply of homes available to home shoppers.



Buyers have been leaping off the sidelines for months to snatch up houses that have had a 5-year backup in pricing. For instance, this activity has reduced the standing inventory in Fairfax County down from a 6.54-month supply in March 2008 to a 2.94-month supply today. Here’s how the regional absorption rates look:


Northern Virginia: 3.14 months
Arlington County: 4.33 months
Loudoun County: 3.31 months
Alexandria City: 3.18 months
Fairfax County: 2.94 months
Prince William Co.: 2.03 months

Prices are starting to move up, however. Homes in the lower end are beginning to sell at or above the asking price. Meanwhile, average sales prices are selling at 96% of asking prices. As the market tightens, those price increases will start creeping up higher end homes as well.

So what? What does that mean to you? If you or anyone in your family is a first time buyer – get off the fence! The federal government is offering an $8,000 tax credit (with no pay back required!). Prices are still very affordable. And there is also $0 down payment financing available for first-time buyers as well – coupled with the $8,000 tax credit. The credit is available on homes settled by December 1, 2009.

If you’re a move-up buyer - now may be the time to make that move up before prices start escalating out of control. If you bought before 2003, you most likely have the equity necessary to make that move up while the time is right – prices are lower than in 6 years; interest rates are lingering in the 5% range (even in the 4%'s with points!); and there’s inventory still available.