This month, the Northern Virginia real estate market seems to be closer to pre-pandemic activity and a more balanced market. At the end of last month, sale prices were up 1.5% from the previous month and up over 6% from last year. It’s taking longer for homes for sale to go under contract and buyers are able to do a lot more negotiation than before. Buyer demand continues to lag behind. This is likely due to mortgage interest rates that really aren’t’ going down significantly enough for buyers to notice. Here’s what it all means for the Northern Virginia Market Update for December 2024.
Consumer Price Index News
The latest Consumer Price Index (CPI) report for November 2024 showed inflation (the cost of goods and services) increased 2.6% over the last year. This is up from 2.5% reported in October. While up, it’s still relatively close to the Federal Reserve goal of 2.0%.
Federal Reserve Announcement
On November 7, the Federal Reserve dropped the federal funds rate another 0.25% in an effort to bring down interest rates. The next Federal Reserve Announcement will be released December 18, 2024.
Mortgage Interest Rates
For the past few months, interest rates have been hovering between 6.5 and 7%. Recently, rates have been gradually going down. Today the rate on a 30-year fixed mortgage was 6.343%. Still the expectation is that the rates will continue to gradually decrease next year.
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 October 2024 was $670,000, which is up 1.5% from the previous month and up 6.6% from the same time last year.
By the end of November, 1,992 homes in Northern Virginia were sold. This is down 16.5% from the previous month and up 9.7% from last year.
The number of Days on Market for Northern Virginia is now 23 days, this is 2 days more than last month and 5 days more than last year. It is taking a little longer to get homes under contract.
This month, there are 2,403 homes for sale, which is a 18% decrease from last month and 2% decrease from last year.
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 1.2 months. While inventory continues to be low, buyers demand is also not high.
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 November, buyer demand was predominantly still LIMITED across most areas. Here are the top 5 in Northern Virginia: MODERATE in Alexandria (112); STEADY in Arlington (108); SLOW in Prince William County (86), Fredericksburg City (74) and Manassas City (74). Loudoun County’s buyer demand is LIMITED (62).
What Does This All Mean
The real estate market in Northern Virginia at the end of November is slow on sales but showing positive returns to home sellers. This is not surprising considering November held the general elections and the Thanksgiving Holidays. Whatever homes were on the market sold well though we are seeing more home inspections and negotiations. This is also a typically slow time for the real estate market.
Advice to Sellers
For homeowners in Northern Virginia, accurate pricing and good condition remain crucial ingredients to ensure a smooth and successful sale. If you do get an offer on the sale of your home, our advice is “Don’t Negate, Negotiate”. It is likely you will see offers that are not what you wanted. Take time to review the offers and see if there is space for negotiations. This is when seasoned real estate agents are crucial.
Advice to Buyers
If you’re ready to buy a home, this may be the time to jump in. If you’ve been approved for a loan, it’s a great time to negotiate with homeowners before the competition increases next year. 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 December 2024 shows a more balanced real estate market where home shoppers and home buyers can come to mutually beneficial agreements. We look forward to keeping you informed every step of the way.
Questions/Concerns? Please contact us.
