February Northern Virginia Market Update
The real estate market is never boring, it’s always changing. Housing inventory, mortgage rates, buyer demand, consumer confidence, and so much more are consistently adjusting.
So, what has changed recently?
For starters, buyer demand has picked back up. We are seeing more interest and more questions from people online, more showings at our listings, and more contracts written, and as a result, more sales are happening. It also seems there is a more positive “buzz” around the market.
Why did this happen?
As interest rates steadily climbed, buyers became apprehensive. Couple this with the inflation and Fed rate hikes, and people got nervous about the real estate market. When would rates stop increasing? Would prices crash because of the increasing rates? Now rates have come down, inflation has slowed, and people are beginning to realize that a rate of 6.125% is historically a decent rate (as low as 5.3% for a VA loan). If you look at the history of rates, 30-year fixed rates have been, on average, 7.75%. All of these factors are bringing back buyer confidence in real estate. It’s why we are where we are today – a healthy real estate market.
Obviously, I have concerns about the future. Where will inventory come from for all these buyers? Most of the homes that are coming on the market are due to a life event such as divorce, death or career moves.
Right now, we have only 1,337 homes on the market in Northern Virginia and with all of the recent sales, we have a one-month supply of homes (if no more homes entered the market, we would sell the current inventory within a month). For the week ending on 27 January, we had 188 homes come on the market in the previous 7 days. By comparison, we had 466 houses go under contract in the previous 7 days. At this rate, we won’t have any houses to sell by Mid-March.
What will be the result?
Higher prices. it’s a simple supply and demand equation. We are not going to see prices crash. We have little inventory and high demand. Stay tuned for more details as we go into the Spring Market.
As you know, every situation is different, so whether you are looking to sell or buy, please call me to discuss your situation in more detail. I am here to help you!