Is it seasonality, or is it a slowdown? This is the big question on many minds in the real estate business. Until recently, we had always experienced a slower August, but during the COVID/Pandemic
August 2023 | Market Update
Dated: August 1 2023
As always, time really flies during the summertime. It is hard to believe that we are already entering August. In the real estate world, we typically see a slowdown this time of year with vacations, back-to-school activities, and the last month of “summer”. With rising mortgage rates, lower activity, and high demand, I’m interested in what we will see for our real estate market for the rest of the year.
While this activity this year has made it difficult to predict, I believe we will see more of what we have seen so far this year. Inventory will remain low, and with the high demand due to demographics and life circumstances, prices will continue to increase. One thing to remember is time to contract has remained at 16 days for the 4th week in a row, which means we are in a strong seller’s market. In the past, time to contract usually begins to slow down later in the summer as the fall approaches, but the elevated competition among home buyers in the Northern Virginia region from the lack of inventory is keeping the time to contract low and prices high.
Another thing to remember is that prices don’t increase as rapidly this time of the year as they do in the Spring Market. As a result, you will start to see headlines saying things like 'Prices are Plunging', 'Prices Continue to Fall Due to Higher Mortgage Rates', 'Prices are Plummeting'…and so forth. Do not be alarmed. We will see a decrease in the pace of price appreciation, but not a depreciation in housing prices. There is a huge difference, but the media loves to terrify - more than clarify - what is truly happening in the real estate market. It’s always best to contact me when you are looking to sell or buy to get the right information on the market and market conditions.
So - where are we today on inventory levels, sales, and prices? As of the end of July, we had 1,746 homes for sale in Northern Virginia – this is 53% below last year and 58% below the last five years’ average for the same week. Contracts written the previous 7 days were at 572 sales – 20% below last year and 35% below the last 5 years' average. We currently have a .9-month supply of homes available – last year, it was 1.5, so we are experiencing high demand with low supply. Lastly, prices are up 1.3% over last year, and if we go back to 2019, the last “normal” year before the pandemic, prices are up 26%. As you can see, homeownership is a great way to build wealth. The good news for our area is that out of the top 20 Metro areas in the US, we have had the most stable market in terms of prices. We are not experiencing the drastic increases and now, the subsequent declines, like other areas. To learn more, please feel free to call me.
As a Northern Virginia native, I am familiar with many neighborhoods and their amenities to help educate your buyer referrals or highlight the benefits to enhance the home values of your seller referr....