The market has absolutely shifted, but don’t expect a sea of change, at least here in NOVA. The last 6 weeks or so have brought a perfect storm of a stock market crash, a precipitous rise in interest rates, and a bunch of buyers tired of writing great contracts and being told it wasn’t good enough. We are now in a bit of a transitional period as the market digests these shocks to the system. Not everyone is as aware of what is going on with the market as we are here at RE/MAX Gateway, so there continues to be overpricing (and subsequent price reductions) as uninformed agents and sellers are not conducting themselves in light of these new realities. Look for a more balanced, yet still modestly rising market through the 3rd and 4th quarters.
Here are some data points which buttress my previous statements. This week we have 3,300 homes on the market, which based upon current sales rates translates to a 1.1 months supply of homes. Compare that to a .7 months supply in May and a .9 months supply in June. For reference I peg a balanced market at closer to a 3-4 months supply.
Average home price in Northern VA is 728K. Average detached 928K. Wow.
A bubble? Nope. Only 2,830 foreclosure starts Nationally in April, an average of less than 57 per state. NOVA region only 9 foreclosures and 7 short sales.
People have equity. A staggering 40% of all homeowners have no mortgage debt and own their principal residences free and clear!
New construction challenges continue to put pressure on supply. In this region it’s been decades since we built enough new housing to accommodate population growth in the region. New home sales are down 19%, as rising material costs (materials costs up 19% in 1 year, 36% from pre-pandemic prices) and labor shortages undermine timelines and rising rates hurt affordability. A pull back is expected.
Major corporations continue to pour into the region. Raytheon Technologies is relocating their global headquarters to the Roslyn area, as is Boeing. We are fast becoming an Urban Tech Hub.
Add it all up and you have what is still a healthy, robust market, with higher yet historically speaking very moderate interest rates, and a great time to buy and get an appreciating asset with fixed ownership costs that is the best real hedge against inflation right now. Call me if you have any questions or thoughts.
It’s a good life.