The data for the real estate market in Northern Virginia are showing some real positives. In spite of a higher inflation rate (now 3.5%, the economy is still strong with lower unemployment rates, higher wages, and more consumer spending. It seems the public are optimistic about the future. Additionally, the housing statistics for Northern Virginia show higher home prices, increasing inventory levels, and increased buyer demand. Home prices are up 5% from the previous month; closed home sales are up 19%, and home inventory is up 3%. Mortgage interest rates have inched up past 7%, the first time since February as a reaction to the higher inflation numbers. Most experts don’t know what to expect from the Federal Reserve after their next meeting April 30 to May1. Here is what it all means for the Northern Virginia real estate market update for April 2024.
Consumer Price Index News
The latest Consumer Price Index (CPI) report was announced on April 10, 2024. It indicated that the overall cost of goods and services went up 0.4% in March, indicating that inflation continues on an upward trend. The rate is now measured at 3.5% since last year. While shelter (the cost of rent) and transportation services went up, the cost of used cars and trucks went down. This has most experts concerned that the Federal Reserve may not lower the federal funds rate anytime soon. Federal Reserve Chairman Jerome Powell insists that inflation must be curbed at 2%. This means that mortgage interest rates would also remain higher in the coming months. The next meeting is slated for the end of April with the announcement scheduled for May 1 at 2:00 pm.
Mortgage Interest Rates
Mortgage interest rates were hovering between 6.5% and 6.9%. Since April 10, they are trending upward, going over 7% for the first time since February. Still home buyers are still purchasing the few homes consistently. For the most part, they seem to have become accustomed to the higher interest rates. This is great news considering that if rates do lower, it is likely that high competition will likely result in more multiple offer situations and even higher home prices.
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 is now $675,000, which is up 5% from the previous month and up 9% from this time last year.
At the end of March 2024, 2,047 homes sold in Northern Virginia. This is up 19% from the previous month and down 11% from last year. This shows the increase in sale activity as the Spring market is in full swing.
The number of Days on Market for Northern Virginia is now 17 days, this is 6 days less than last month and 5 days less from this time last year.
This month, there are 2,042 homes for sale. Additionally homes sold at 101.8% of the original asking price. In general, home owners are getting more for their homes than what they set as the sale price.
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; this is less than 1.5 last month.
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).
This month, buyer demand is SLOW across most areas and may be due to the winter season. Here are the top 5 in Northern Virginia: MODERATE in Arlington (126) and Alexandria City (119); STEADY in Prince William (102), Manassas City (98), and Stafford (93). Loudoun County’s buyer demand is LIMITED at (59).
What Does This All Mean
The Spring market in Northern Virginia is becoming more active with new homes for sale but still not enough to keep up with buyer demand. This is in spite of the 7% interest rates. Inflation has increased from the previous months and there is the fear that rates may go even higher. The expectation is that they will come down by the end of the year. The Market Update April 2024 shows strong home prices and shorter days on the market. This is a popular time for home sales due to improved weather, families wanting to move before the new school year begins, and more availability of homes to see. It seems that this year is no different.
Advice to Sellers
For homeowners in Northern Virginia, accurate pricing and good condition remain crucial ingredients to ensure a smooth and successful sale. If done properly, expect to get your asking price and go under under contract in about 3 weeks. This is a great time to get your home on the market.
Advice to Buyers
This is not the time to wait for lower interest rates though they are expected to come down from 7% by the end of the year. The reason to not wait? Imagine how many others are waiting for lower interest rates. Again, the market will be flooded with buyers meaning more competition and even higher home prices. This is the time to shop around and find the right home for the next chapter of your life.
Bottom Line
The market update for April 2024 shows a more vibrant real estate market with even more excitement to come. We believe in staying on top of the real estate market trends to help our clients succeed in real estate and in life. Reach out if you need help buying or selling your home.
Questions/Concerns? Please contact us.
