Are Home Prices Going Down in Northern Virginia?
All the talk is about inflation. Gas prices, electricity, food are all going up in costs. The stock market is taking a serious blow. Inflation is now at 9.1%, an all time high in 40 years, according to Forbes. And the Northern Virginia area is being affected as well. This month’s market update is showing a slowing seller’s market and a shift to a more balanced market. For the first time since the start of this year, home prices have fallen. Here is the real estate market update July 2022.
Using data from MarketStats by Showing Time, the median sale price for a home in Northern Virginia is now $640,000, down from $660,000 at the end of June. This is a 6% increase from the same time last year but a 3% drop from the previous month.
By the end of June 2022, there were 3,871 homes sold. This is a whopping 26% less than last year’s figure AND a 6% decrease from the previous month. This reflects the lack of inventory in the housing market.
The average number of days it took to sell a home is now at 10, up one day from last month yet down by one day compared to last year when it took 11 days to get a home under contract.
The median price per square foot per home is now $290. This is up 8% from last year and down 2% from last month.
The total value of homes sold amounted to $2,786,979,177. This is down 20% from this time last year and down 6% from last month.
The month’s supply for June was 0.98, up from 0.7 last month and last year this time. This number shows 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 about 3 months supply. This figure has gone up significantly and indicates we are heading to a more balanced market.
Mortgage Interest Rates
According to Nerd Wallet, mortgage interest rates on a 30 year conventional are at about 5.497%. This is as of July 14, 2022 and is actually down from the 6% reported June 14. The Federal Reserve announced yesterday that it will again raise interest rates, possibly as high at 1 full point.
What Agents are Seeing
With the Summer in full swing, inventory of homes is improving and there seems to be less buyers. Open houses are not as well attended, it takes longer to get contracts in on homes, and there are less offers coming in. Still, it is most certainly a SELLER’s MARKET.
This trend is expected to continue through to the end of the year with the market becoming more balanced for buyers and sellers. It means homes will stay on the market longer. Homes in great condition and in sought-after areas will continue to be in high demand. Homes needing more repair will take longer. The longer the homes stay on the market, the more buyers can negotiate on better prices.
HOME DEMAND INDEX
According to Bright MLS’s Home Demand Index report for July, the Northern Virginia area continues to have a healthy and moderate demand by buyers. “This Home Demand Index (HDI) and accompanying economic research measures and tracks housing demand, home prices, and home buying activities by analyzing property data gathered from real estate agents, home sellers, and homebuyers involved in the viewing, showing, buying, and selling of homes,” according to Bright MLS. The top 5 counties in Northern Virginia with the highest demand are (in order of ranking: #1 Arlington (208); #2 Manassas City (181); #3 Prince William (175); #4 Alexandria (174); and #5 Falls Church and Stafford (145).
What Does This All Mean?
The data shows that there is still a shortage of homes on the market. With this scarcity of homes for sale compared to buyers’ demand, seller’s are still in a good position. Still , for how much longer, is uncertain. The market is shifting toward a more balanced equation.
The market update July 2022 shows that Northern Virginia remains a great place to own real estate. Home prices keep rising and demand to live in these great counties and communities remain high. While stock and other investments don’t provide a good return, this area is stable and strong with no signs of letting up.
Questions/Concerns? Please contact me.
Also feel free to compare this update with last month’s Market Update – June 2022