The anecdotal evidence from my brokerage firm and the data continue to tell the story of a still robust Northern Virginia market but one that is moderating. Inventory this week is up to 3,824 homes. Slightly better than 2021 which was at 3,571. But home sales themselves have taken a DEEP dive year over year. Home sales in June were 3,871 units. Compare that to 2021 when we had 5,227 units and you are looking at a 26% decline in sales! Those are still robust numbers but starkly demonstrate the retreat from the craziness of the first part of the year.
Median Days on Market is still a healthy 10 days, and we are looking at less than a 1.5 months supply of homes on the market.
We are seeing a lot of daunting economic news coming out on a pretty much weekly basis that is impacting the buying mentality. The economy shrank for a 2nd straight quarter which is the traditional definition of a recession, though the administration is trying to redefine the term! Frankly though it is an odd recession. This one has some positive forces the last couple have lacked, but also some egregious ones those did not, particularly inflation, which continues to erode wages, savings, and destroy the budgets of those least able to bear up under it. The good news on the real estate front is that I believe after the shock of these factors are absorbed and analyzed, buyers will be back in the game as they realize that real estate, especially Northern Virginia real estate, is perhaps their best hedge against inflation.
One other point that I still see being misread. That is the relationship between the FED’s actions on the Federal Funds Rate and long term mortgage rates. While they occasionally correlate there is NOT a causal relationship. In point of fact rates have fallen since the June increase. So don’t panic when you see the FED “raising rates”. Call me for a more in depth discussion, and about what they mean for you as a buyer or seller. In fact, reach out to me about anything even tangentially related to real estate and we’ll get you taken care of.
It’s a good life.