REAL ESTATE IN NORTHERN VIRGINIA
This market update for March 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, 2% higher. Inventory remains low and buyer demand is increasing as mortgage interest rates level are back under 7%. 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 March 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 $585,000, up from $575,000 the previous month. This is a 2% increase from the previous month and a 2% increase from this time last year. On a national level, housing prices were up 3% from last month and last year. This increase is no where near the 15-20% increases during the pandemic. It seems to suggest that the efforts to curb inflation are working.
By the end of February 2023, there were 1,707 homes sold. This is 26% increase from last month and a 25% decrease from last year. As interest rates fell below 7%, buyer demand increased and many of the homes that were sitting on the market before the holidays finally went under contract. Agents were even reporting multiple offer situations during this time.
The average number of days it took to sell a home is now at 32, down 5 days from last month and up 11 days from last year.
The median price per square foot per home is now $288, about 1% up from last month and down 0.7% from last year.
The total value of homes sold amounted to $ 1,155,195,417. This is up 27% from last month and down 22% from this time last year. This rounds up the numbers for the latest market update for March 2023 for Northern Virginia.
What Agents are Seeing
Some agents are reporting multiple offers and over-asking price on some homes. In general, buyer demand in Northern Virginia started to go down as mortgage interest rates went above 7% again. At this time, buyer demand for this area is considered “Slow”. This is according to information from Bright MLS Home Demand Index. This metric measures demand from buyers using data such as showing requests an other Bright MLS metrics.
In March, only two areas had “Moderate” buyer demand – Arlington and Alexandria. Areas that had the next level down in buyer demand “Slow” were Prince William County, Fairfax, and Falls Church (in that order). Loudoun County was measured to have “Limited” buyer demand.
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Month’s Supply
The month’s supply is now at 1.2, which is down from 1.6 the previous 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 6.719. This is down 27 basis points from the previous week (when it was above 7%) and also up 249 basis points from last year. Many experts are hesitant to make predictions on how the rates will go from here. The main takeaway is that most experts agree rates will not return to 2-3% anytime soon and that rates are still relatively normal considering historic highs around 15%.
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 not expected to decrease significantly anytime soon. While the amount you can spend on a home has probably gone down since the pandemic, if you can afford to buy a home, then it should be considered. Additionally, with less buyers in the marketplace, it means competition is not as high as it once was. The likelihood of negotiations and inspections are higher. 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.
Bottom Line
Northern Virginia is still a great place to live and own a home.
Questions/Concerns? Please contact us.
Also feel free to compare this update with last month’s Market Update – February 2023
