Is the real estate market asleep?
This is the time of year when we make time to see family and friends, decorate the house, and start holiday shopping. The chilly weather calls for warm drinks, relaxing by the fire, and staying warm. Even the hectic pace of work, at least for most, slow down. For realtors, there were markedly less open houses over the past few weekends and less homes on the market than previous months. It seems the real estate market in Northern Virginia continues to mystify us. So the question is – is the real estate market asleep?
Let’s dive into December’s market update looking at the latest statistics from MarketStats by Showing Time, find out if the real estate market is asleep, what agents are reporting, and what it all means to you.
Homes that Sold in November
The average sale price for a home in Northern Virginia is $643,536. This is an 5% increase from the same time last year and almost a 5% decrease from the previous month.
At the end of November 2021, there were 3,642 homes sold. This is almost a 7% increase from last year and 1% increase from October.
The total value of homes sold amounted to $2,330,976,054. This is up 12% from last year and down 4% from the previous month.
The average number of days it took to sell a home went up from 19 days to 21 days. This is 31% more time than last year and up 10% from last month.
The average price per square foot went up slightly from October when it was $294 per square foot to $298 per square foot in November. This is also a 9% increase in value from last year.
Homes that Came on the Market in November
By the end of November, 2,580 homes for sale. This is 36% less than the previous month and 19% less than last year this time. Inventory keeps falling.
The month’s supply for November is now at 0.6 down from 0.97 the previous month. This figure represents how many months it would take to sell all the current homes now on the market. Most consider a balanced market, where buyers and sellers of homes are on the same playing field, to be 3-6 months supply. This figure is significantly low though this time of year traditionally is a slow month in the real estate market. The five year average for November is 1.3.
Mortgage Interest Rates
According to Forbes, mortgage interest rates are on a steady rise, as was predicted. Still, rates are at historic lows and worthy of getting locked into. The average rate on a 30 year fixed conventional mortgage is at 3.29, which is 19 basis points more than last month. The same holds true for 15 year fixed conventional, which is now at 2.54. This is 15 basis points more than last month.
Of significance is that the Federal Reserve announced this week that they will consider raising interest rates as much as a quarter percent three times in 2022. The increase, they say, is due to inflation which has seen an increase in prices not seen in 40 years. “Employers are having difficulties filling job openings, and wages are rising at their fastest pace in many years,” Federal Reserve Chair Jerome Powell said.
The gradual increase in mortgage interest rates are now certain so buyers have limited time left to take advantage of locking in good rates.
What Agents are Seeing
Most seasoned real estate agents are accustomed to a slow winter season and this year is no different. Still inventory is markedly low as buyer interests have also declined.
According to Bright MLS, the demand for homes in the DC metro area fell sharply by 24% in November when compared to the previous 4 months.
What Does This All Mean?
The data highlights the current lack of inventory and an increase in the value of homes. It remains a sellers market and is projected to remain the same coming into 2022. So for now, Sellers still have the advantage. At this time, buyers interest has declined. This is expected to change. Buyers who qualify will want to take advantage of low interest rates while they last and there may be a last push to secure these good rates going into 2022.
While inventory is low, the market still favors the Sellers. The forecast for the market going into 2022 is that inventory will remain low and buyers demand will increase.