MARKET UPDATE – OCTOBER 2022
For the fifth time this year, the Federal Reserve has raised the funds rate, this time another 75 basis points. The hope is that these measures curb inflation. Lending institutions have raised mortgage interest rates as a result, this week close to 7%. The real estate market has felt the effects as buyers are reacting to these higher rates, with some no longer able to afford the buy a home. This month’s market update shows that the numbers are reflecting the slowdown in the real estate market. Home prices are falling in some areas of Northern Virginia.
What Agents are Seeing
Most agree that the housing market is experiencing a transition from just a few months ago when it was a clear Seller’s market. Now, buyers seem to be more particular and not in a rush to find a home. Still, the future is uncertain. Most describe the current market as “volatile”. As inventory is increasing, buyer demand is declining suggesting a balancing of the market. Still, does this indicate that home prices are falling?
Statistics
Using data from MarketStats by Showing Time, the median sale price for a home in Northern Virginia is now $585,000 , down from $595,000 at the end of August. This is a 2% decrease from the previous month and 6% increase from this time last year.
By the end of September 2022, there were 2,612 homes sold. This is 15% decrease from last month and 30% decrease from last year. This speaks to the lack of inventory of homes for sale.
The average number of days it took to sell a home is now at 24, up 6 days from last month and up 6 days from last year.
The median price per square foot per home is now $276. This is up 5% from last month and down 2% from last year.
The total value of homes sold amounted to $1,724,556,144. This is down 28% from last month and down 17% from last year.
Month’s Supply
The month’s supply was 1.53; which is up from last month’s figure of 1.22 and up from 1.10 from last year this time. 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.
Mortgage Interest Rates
According to Nerd Wallet, the annual percentage rate on 30-year conventional mortgages is at 6.939. This is up from 6.1 from last week. It’s also up from last month when the APR was at 6.2%.
Northern Virginia Cities
Most cities in Northern Virginia are seeing a decline in home prices from last month but still holding on to higher prices from the year before. There are exceptions. Arlington saw a 14% price drop from last year and a 13% price drop from last month. Conversely, Falls Church saw a 8% increase in home prices from last year and a 12% increase from last month. The chart below shows how other areas did.
Advice to Sellers
It’s important that people selling their homes in the coming months are aware of what is happening in their county, city, and neighborhood. More than ever, the condition of the home and pricing are important. Buyers are more likely to walk away from homes with too many needed renovations or negotiate on price. Even in this volatile market, homes with the latest updates, in popular areas, and that are reasonably priced sell quickly.
Advice to Buyers
For buyers who may be discouraged by higher interest rates, do not lose hope. Some buyers have been asking if they should wait until 2023. Each individual situation is different. Factors to consider include affordability, the cost of renting vs. buying, personal situations, and the ability to work with a lender on either reducing the monthly payments and/or decreasing the interest rates by buying points.
Bottom Line
The market update for October 2022 shows an overall trend toward falling home prices in Northern Virginia. The future is still uncertain. Still, Northern Virginia remains a great place to live and own a home.
WATCH THE LATEST VIDEO – MARKET UPDATE FOR OCTOBER 2022
Questions/Concerns? Please contact me.
Also feel free to compare this update with last month’s Market Update – September 2022
