REAL ESTATE IN NORTHERN VIRGINIA
This market update for February 2023 for Northern Virginia shows that despite the fact that home sales are down, home prices remain strong. Compared to last year this time, home prices are, on average, 8% higher. Inventory remains low and buyer demand is increasing as mortgage interest rates level off and the holidays are behind us. In this article, we’ll review the latest statistics and let you know how the numbers translate for home sellers and home buyers. Here it the latest real estate market update February 2023.
Statistics and What it Means
Using data from MarketStats by Showing Time, the median sale price for a home in Northern Virginia is now $575,000 down from 565,000 the previous month. This is a 2% decrease from the previous month and a 8% increase from this time last year. On a national level, housing prices were up 4% from last year. This is a much more “traditional” rate of increase which indicates that the efforts to curb inflation are working. During the pandemic, housing prices were up to 20% in this area, which affected housing affordability. This is a major observation in the market update for February 2023.
By the end of January, there were 1,349 homes sold. This is 26% decrease from last month and a 31% decrease from last year. Again, this is not surprising considering the lack of inventory of homes for sale.
The average number of days it took to sell a home is now at 37, up 6 days from last month and up 9 days from last year.
The median price per square foot per home is now $284, which is up 2% from last month and up 0.7% from last year.
The total value of homes sold amounted to $ 911,276,235. This is down 25% from last month and down 28% from this time last year. This rounds up the numbers for the latest market update for February 2023 for Northern Virginia.
What Agents are Seeing
Buyer demand in Northern Virginia is “Moderate” at best. The latest information from Bright MLS Home Demand Index lists areas and their overall demand from buyers using data such as showing requests an other Bright MLS metrics. In February, there areas with “Moderate” demand from buyers were Arlington and Alexandria; these were followed by “Steady” demand in Manassas City, Prince William County, and Stafford County. They noted that demand for the Greater Washington DC area (including Northern Virginia) was up 25% from January and 16% lower than this time last year.
The month’s supply is rising steadily. From 1.2 last month to 1.6 this month. This number shows how many months it will 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 about 3-6 months supply. It illustrates how low inventory is at this time. Many experts speculate that this will keep home value to remain steady in Northern Virginia in the coming months.
Mortgage Interest Rates
According to Nerd Wallet, the annual percentage rate on 30-year conventional mortgages is at 6.771. This is up 21 basis points from the previous week and also up 274 basis points from last year. Many experts predict rates may continue going up (as high as 7 or 8%) and then begin goin down again, once the Federal Reserve is comfortable that inflation has come down. The main takeaway is that most experts agree rates will not return to 2-3% anytime soon.
Advice to Sellers
If you’re in a situation where you need to sell your home, pricing will be important to understand. Now that a few months have passed since the cool down in home buying, you will have a better perspective of how much you can get for you home. It’s important to note though that buyer demand seems to be high now. There is no telling what the next months will bring.
Advice to Buyers
Buyers who are discouraged by higher interest rates should keep in mind that rates are expected to get higher and it doesn’t mean you shouldn’t buy a home. If you can afford to buy a home, this may be a good time. Lenders can assist you with finding the best course of action for you – whether using a first time homebuyers program, buying down interest rate points, or using a “buydown” option. There will never be a time when you can get low rates AND low home prices. Since homeowners have about 40% more net worth than renters (according to the National Association of Realtors), it will be a good time to buy a home when you can afford it. Trying to “beat the market” shouldn’t be your tactic when it comes to your financial future.
There is still a low inventory of homes for sale. Mortgage interest rates are hovering in the 6 percent rage and expected to go up before coming back down. Homebuyers are looking for their dream homes again and enjoying more to choose from and less competition. Thankfully, Northern Virginia is still a great place to live and own a home.