Market Update – October 2021
Home sales in Northern Virginia continue to fall month over month. While inventory levels remain low and favor sellers, this overall slow down is causing some homeowners concern. The numbers do show that the housing market is giving way to a more balanced market. But after looking at 5 year trends, it appears that things may just be normalizing after a jolt to the market during the Covid pandemic. Using data from the end of September, this article reviews the statistics in the housing market and what it may mean for future home sales. Where is the real estate market heading?
Statistics
Sales Volume
The sales volume of homes sold in Northern Virginia in September 2021 was over $2.3 billion. This is down just a bit compared to last year’s sales volume of $2.4 billion and also down compared to last month’s sales volume of $2.7 billion.
Closed Sales
The number of home sold in September is 4,774, which is up 3% from last month (4,634 homes old) and down 4.5% from September 2020 (4,998%).
Average Sales Price
The average sales price for this region is now at $635,339, which is down 1.6% from last month ($645,551) and up almost 3% more than last year ($617,286).
Days on Market
Homes in Northern Virginia are also spending on average 18 days on market. This is up 3 days compared to last month and the same number of days compared to last year.
Month’s Supply
Using figures from MarketStats by ShowingTime, month’s supply in September 2021 is at 1.27 months. This translates to how much time would be needed to sell the current inventory of homes currently for sale. The less homes for sell typically means prices go up. A balanced inventory/market where buyers and sellers are on the same playing feel is usually considered to be 3-6 months supply. This means it remains a sellers market similar to last September when month’s supply was at 1.26. Still, compared to last month, there is more inventory and it is taking a little more time to sell them. August’s month’s supply was 1.09.
September 2019
Looking at figures for September 2019 (pre-COVID pandemic), there seems to be little similarities except for Month’s supply. The number of homes sold and the average sales price are up while the number of days on market is down from 33 to 18 days.
5 Year Comparisons
Home prices keep rising in Northern Virginia. The chart below illustrates how home prices keep going up over the last 5 years. While an average home cost under $500,000 in October 2016, they are worth well over $120,000 more today.
It also appears that the housing market is following more normal patterns as over the past 5 years. Most homes sale occur during the summer with volume beginning to fall during this time of year. Still, even with the declines, the number of homes sold in September (4,774 homes sold) is still surpassing the 5-year average of 4,448 homes sold.
What Agents are Seeing
Home sales appear to contrast depending on the area the home is being sold and the condition of the home. Some agents report few days on market, multiple offers and over asking price while others report sitting on the market over 3 weeks, having to negotiate home inspections and price, sometimes offering closing costs to buyers. Often, homes in the best condition are able to take advantage of the lack of inventory. It makes us wonder where this real estate market heading?
What Does This All Mean?
The data suggest the market is still outperforming the previous 5 year averages and remains a seller’s market with home appreciation still solid in Northern Virginia. It is losing ground from previous months in terms of average sales price, days on market, and number of homes sold. But it appears that this is more indicative of the trends for this time of year. In terms of month’s supply, it resembles more pre-pandemic availability. This “return to normal” in terms of month’s supply is great news for the Northern Virginia region. Sellers can still take advantage of low inventory while buyers have a much better chance of getting offers accepted. Additionally, more homes are coming on the market each week and it is expected to be a busy fall season.
Bottom Line
Where is the real estate market heading? It remains a seller’s market and more homes continue to come on the market. With mortgage rates still low, buyers can continue to take advantage of more homes coming on the market and a little less competition.
Questions/Concerns? Please contact me.