As the Northern Virginia real estate market shifted from winter to spring, a lack of inventory led potential buyers and their agents to act quickly.
“What real estate agents are facing right now are many visits within the first 48 hours of listing,” said Thai-Hung Nguyen, secretary-treasurer of the Northern Virginia Association of Realtors (NVAR) and principal broker. of Better Homes and Gardens Real Estate. in the Church of the Falls.
“I put up a listing at 8 a.m. and at 10 a.m. I would have the first visit,” Nguyen noted as he analyzed March home sales figures, which showed that 71% of properties that closed during the month spent less than 10 days between initial listing and a ratified contract.
A total of 2,035 properties sold in March in the region, down 4.9% from the previous year – but much of this shortfall is due to a continued lack of inventory on the market, coupled to the very strong COVID rebound home market of early 2021.
(Figures represent sales in Arlington and Fairfax counties and the cities of Alexandria, Fairfax and Falls Church. For complete data, see the website at https://nvar.com/marketstats.)
While those looking for homes are feeling the pinch of a pro-seller environment, many are refusing to jump on any property.
“Buyers still prefer move-in ready homes,” Nguyen said. “If homes sit on the market for more than two weeks, that’s a sure sign that they’re overpriced or in a condition that’s not good enough for most buyers.”
Others, however, throw caution to the wind.
“We’re hearing stories of buyers coming in with no contingencies, which could be risky, depending on their particular situation,” said Ryan McLaughlin, CEO of NVAR.
There are signs that the inventory crisis of the past year is beginning to ease, at least to some degree. While the number of homes on the market in March was still down 22% from a year earlier, it’s not as steep a drop as seen in previous months. And there was a 37.8% jump in month-on-month supply in March compared to February, although this may simply be the market’s return to normal seasonality after being derailed by COVID.
“One thing I’ve noticed is that there are more ‘Coming Soons’ in MLS which hopefully means more homes in the pipeline which will provide some relief to the inventory problem. “, Nguyen said.
Individual results still vary; while the typical number of offers for homes averages five to many, it can range from as few as one or two to as many as 25. Buyer interest remains high in Arlington, Alexandria and the Fairfax County, according to the Bright MLS T3 Domestic Demand Index.
Multiple bids for a limited supply of homes pushed prices to a record high in March. The average sale price of a home in the NVAR region in March was $779,908, 12% above the March 2021 average of $696,318. The average price of a single-family detached home was $1,137,371, up 11.6% from last year.
Homes continued to sell above list price in March, with an average sale price to opening list price ratio of 103.4%.
Can this upward price spiral continue, particularly with purchasing power eroded by the rise in inflation and interest rates?
As Freddie Mac reported on April 7, mortgage rates have risen 1.5 percentage points over the past three months, the fastest quarterly rise since May 1994. The increase could impact affordability , keeping some buyers on the sidelines.
“With the Fed raising interest rates, which translates into higher mortgage rates, some buyers will likely be squeezed out of the market,” McLaughlin acknowledged. “While this, combined with rising inflation, may dampen the rapid price increases we have seen over the past year, homes are unlikely to lose value in our market.”
For March, year-over-year sales were down in all five NVAR index locations, with the exception of Arlington, which edged up slightly. Average selling prices increased in all jurisdictions; median sale prices increased in Arlington, Fairfax County and Falls Church; in Alexandria; and effectively unchanged in the city