The real estate market in Northern Virginia continues to be in a remarkable time. First, rates continue to be extremely volatile – the jobs report exceeded expectations, and rates took their
February 2024 | Market Update
Dated: February 6 2024
The real estate market in Northern Virginia continues to be in a remarkable time. First, rates continue to be extremely volatile – the jobs report exceeded expectations, and rates took their biggest one-day jump in over a year. These reports will, in all likelihood, be revised downward as they typically do, but rates won’t drop as much as they increased as a result of this news. Even with the higher rates, buyers are still coming out of the woodwork. We had several homes come on the market on a Thursday, we held open houses on Saturday and Sunday, and they brought in more than 100 visitors, with agent showings exceeding 25. As a result, you can see that buyer demand is not wavering at all.
Another anomaly we have is the number of homes for sale. Inventory throughout the rest of the country is rising nearly 9% over this timeframe last year, and we are down 21%.
One of the reasons for our lower inventory levels is the pace of our sales, which is up from last year by 8%, supporting my previous comment about buyer demand. In addition to the rise in our sales rate, we continue to see the lock-in effect of homeowners with low-interest rates staying in their current homes longer and increasing prices. These two factors make it less affordable for people to make a move, and therefore, we have lower inventory.
Where do I see the market going forward? I believe we will continue to see low inventory levels as buyers continue to flood our market. This will result in higher prices, as we are already seeing multiple contract situations and escalating prices. We have also had sight-unseen offers on our listings, which shows how much interest and need buyers have in today’s market. I believe we will see more new home sales with less inventory of resale properties available to buyers. Typically, new home sales make up between 10 and 12% of the market; today, it is over 30%. In my opinion, this trend will continue. We are already beginning to see builder’s prices go up and incentives go down with their increase in sales activity.
So - where does the market go from here? I believe interest rates will come down as the inflation rate continues to come down. The lower rates will bring more buyers into the market because more people can qualify for mortgages.
Therefore, any homes that come on the market will be sold quickly, resulting in prices continuing to increase.
What should you do if you are considering selling or buying a home? Call me so we can determine your best course of action.
Happy Valentine’s Day!
Scott MacDonald, an experienced entrepreneur in the real estate industry with over three decades of expertise, leads a dedicated team at RE/MAX Gateway. Scott has successfully closed thousands of tran....