Tim Savoy, a real estate agent with Coldwell Banker Residential Brokerage Dupont/Logan Circle, writes an occasional column about the Washington area housing market.
Northern Virginia’s real estate market experienced overarching steady growth throughout 2015.
While the District of Columbia experienced larger growth, the theme throughout Arlington County, Alexandria, Fairfax County and Loudoun County was tempered growth, especially when compared to 2013 and 2014.
While Northern Virginia showed much slower growth in the first six months of the year, the area experienced more sales throughout the summer and fall real estate seasons, according to data from RealEstate Business Intelligence, a subsidiary of Rockville-based multiple-listing service MRIS.
Here are a few indicators of the real estate market in Northern Virginia:
The median sales price across Northern Virginia was on the rise in 2015. Communities in Northern Virginia saw largely modest gains in median sales price: 1.1 percent to $460,000 in Fairfax County; 4.4 percent to $435,000 in Loudoun County; 5.75 percent to $560,000 in Arlington County; and 5.24 percent to $500,000 in Alexandria. Still, each one saw a bigger gain.
Days on market
The median days on market — the number of days it takes a property to go from active on the market to under contract — in Northern Virginia has remained at or around 30 days throughout 2015 for most areas. That’s much lower than the national median of 84.
The median was the highest in Fairfax County (38) and Loudoun County (34). Still, the numbers are going in the right direction. Fairfax County’s median dropped 5 percent year over year. And Loudoun County’s fell 27.7 percent, an indicator of that market’s growing popularity.
Closer to Washington, the median for Alexandria and Arlington County was 27 days in 2015. Both jurisdictions were down about 5.5 percent from 2014. Typically, the median is lower in these areas because of the proximity to the District. With small price increases year over year and a reduction of days on market, growth in Arlington and Alexandria is expected to continue into 2016.
Price per square foot
The price per square foot throughout Northern Virginia varied significantly by county.
While the sales prices in each county were up slightly from 2014, the price per square foot was slightly down. This means that there may be a skew in the size of home that was sold.
Price per square foot was lower in Loudoun County ($191) and Fairfax County ($281) compared to Arlington ($452) and Alexandria ($360). Each area saw slight growth in price per square foot, reflecting steady gains throughout Northern Virginia.
Throughout Northern Virginia, the sales-price-to-list-price ratio — the price for which a property sells compared with its list price — tended to stay around 97 percent. As a property sits on the market longer, the ratio tends to fall because of diminishing desirability.
The ratio was highest in Arlington (down 0.4 percent to 97.4 percent) and Alexandria (up 0.4 percent to 97.2 percent). This shows us that the market’s pricing is consistent year over year given the small insignificant changes to the ratio.
Moreover, Loudoun County and Fairfax County were similar with comparable ratios of 96.6 percent and only a small reduction at 0.5 percent.
What does this mean for 2016?
As prices continue to rise at higher rates in Washington, Northern Virginia will likely see more production, especially in the Arlington and Alexandria areas closest to the city.
This factor, along with the increase in interest rates expected through 2016, will likely create a similar growth pattern for Northern Virginia in 2016.
Whereas the Washington market is severely strapped with supply, Virginia’s market is much more buyer-oriented as supply continues to increase. Overall, growth will continue in Virginia, but likely at a much slower pace than its neighbor Washington.
Catch up on Tim’s previous columns:
In 2005, the housing market cooled in Montgomery while prices rose in Prince George’s
In 2015, the fortunes in D.C.’s housing market spread eastward
Smart-home upgrades that you can install yourself
Tim Savoy can be reached at Timothy.Savoy@cbmove.com.