There are so many factors that go into making the housing market for Northern Virginia. While the area is insulated by a strong job market, good infrastructure and medicinal and education services, there are also other factors at play. The fall season and upcoming presidential elections also play a role. Here is the Northern Virginia Market Update for October 2024.
Consumer Price Index News
The latest Consumer Price Index (CPI) report for the end of August 2024 showed inflation (the cost of goods and services) increased 2.5% over the last year. This is down from 2.9% reported at the end of July 2024. This is great news as it’s that much closer to the 2.0% goal set by the Federal Reserve.
Federal Reserve Announcement
At their last meeting in September, the Federal Reserve reduced the federal funds rate down by half a point. This is the first rate cut in 4 years. The next announcement is scheduled for November 7, 2024.
Mortgage Interest Rates
Since the last Federal Reserve Announcement on September 18, 2024, mortgage interest rates have been going higher. Still the expectation is that the rates will gradually decrease over time. It’s important for home buyers and home sellers wanting to refinance their loans to keep a keen eye on rates.
Statistics and What it Means
Using statistics from MarketStats by ShowingTime, we looked at 10 counties in Northern Virginia – Alexandria, Arlington, Fairfax, Falls Church, Fauquier, Loudoun, Manassas City, Manassas Park City, and Prince William. Here are the highlights for Northern Virginia.
The median sale price for a home in Northern Virginia at the end of September 2024 was $675,000, which is down about 2% from the previous month and up 9% from the same time last year.
By the end of September, 2,138 homes in Northern Virginia were sold. This is down 15% from the previous month and up 6% from last year. This is good news for real estate and showing signs of a more balanced market.
The number of Days on Market for Northern Virginia is now 20 days, this is 3 days more than last month and 3 days more than last year. It is taking a little longer to get homes under contract.
This month, there are 3,180 homes for sale, which is a 2.5% increase from last month and 11% increase from last year. Additionally homes sold at 99.2% of the original asking price.
Inventory Levels
The phrase “Month’s Supply” refers to how many months it will take to sell all the homes currently on the market. Most consider a balanced market, where buyers and sellers are on the same playing field, to be about 3-6 months supply. Currently, Northern Virginia has a month’s supply of homes for sale of 1.5 months. This is an improvement from previous months and shows increasing inventory but still not enough to meet buyer demands.
Bright MLS Buyer Demand Index
According to Bright MLS Home Demand Index, buyer demand in the Washington Metro Area (which includes Northern Virginia) remains “Limited”. The Bright MLS | T3 Home Demand Index measures and tracks consumer and real estate professional behavior related to shopping for real estate. They look at metrics such as the number of views of homes online and in-person showings. Ratings are categorized into 5 score points: Limited (under 70 points), Slow (70-89), Steady (90-109), Moderate (110-129), and High demand (over 130).
For the month of October, buyer demand was predominantly still SLOW across most areas. Still the numbers are increasing from previous months, likely due to lower interest rates. Here are the top 5 in Northern Virginia: MODERATE in Arlington (137) HIGH; Alexandria (127) and Prince William County (112) MODERSTE; Fredericksburg City (96) STEADY; and Fairfax (89) SLOW. Loudoun County’s buyer demand is SLOW (82).
What Does This All Mean
The real estate market in Northern Virginia has seen an uptick in showings and homes for sale at the beginning of Fall. This is customary as school are back in session, vacations are being wrapped up and last minute plans are executed before the holidays. Additionally, activity is affected by upcoming elections as home prices tend to go up after a major election.
Advice to Sellers
For homeowners in Northern Virginia, accurate pricing and good condition remain crucial ingredients to ensure a smooth and successful sale. If done properly, expect some negotiation from home buyers, whether it be on price or closing costs requests. Also expect to go under under contract in about 2-4 weeks, depending on where you live. We offer neighborhood-specific advice on pricing and clear expectations to make the process as hassle-free for our clients.
Advice to Buyers
This is not the time to wait for better rates. Work with a professional lender to determine your budget and then begin your search. Our advice is to lock in a great rate and ensure your lender can always lower the rate before your loan is approved. Also consider that your first home does not have to be your dream home. The important thing now is to build wealth through home ownership. Also, consider looking in other areas where you may be able to get more home for your month. Has anyone taken the time to explain the home buying process in Northern Virginia with you? If not, please reach out.
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Bottom Line
The market update for September 2024 shows stable home prices and mortgage interest rates paired with more homes for sale this month. As mortgage interest rates go down, more home buyers will increase competition and possibly drive home prices even higher. We look forward to keeping you informed every step of the way.
Questions/Concerns? Please contact us.
