For the most part, Northern Virginia has seen a stable pattern of real estate activity in the past five years. While home prices have experienced a steady upward trajectory, there are some signs that several locations have started to pull away from the pack and outpace the rest of the competition.
Falls Church has rarely made much news when it comes to the most sought-after places to buy a home in Northern Virginia, but in the past year or two it has continually ranked as one of the best-selling neighborhoods for the area. Just five years ago, median sales prices there typically ranged from $500,000 to $600,000. In the past two years, however, prices have surged to well over $700,000 most months out of the year — even surpassing $800,000 two months out of the past 10.
This increase in prices naturally comes with a decrease in how long these homes stay on the market. So far this year, there have only been three months when the median number of days on market (DOM) was higher than 20. When median prices increase by almost $200,000 in just a few years and homes sell in under a month, that is a sure sign of a hot neighborhood.
Another sign of a hot neighborhood is when the number of days on market makes a sudden drop and stays low for the remainder of the selling season. North Arlington saw this trend take hold in March when the DOM suddenly plummeted from a median of 80 days to nine and hasn’t gone above 23 days ever since. Often this can be explained by a decrease in inventory, but this happened as more and more homes were going on the market for 2016. Word got around that North Arlington was a hot place to buy, and buyers responded accordingly.
Not surprisingly, prices increased in North Arlington more quickly than anywhere else in the county, with median sales prices well into the $900,000s. There was even one month — June — when the median sales price was more than a million dollars ($1,036,250). That happened once during 2015 as well and all the data suggest this trend will continue next year. One trend North Arlington hasn’t seen much of this past year is homes selling over their asking price. But given the strong demand already in 2016, this is possible in 2017.
No discussion of Northern Virginia is complete without a look at the massive growth surrounding the Tysons corridor. The expansion of Metro’s Silver Line is an attractive feature and certainly a contributing factor to the popularity of Tysons. But despite all the new buildings and construction, there hasn’t been a significant impact on the micro-level Tysons real estate market — yet. However, many of the areas surrounding the Tysons corridor have seen a noticeable effect on their individual markets. This is expected to only increase in the next few years.
Pimmit Hills, for example, is the closest large residential neighborhood to the east of the Tysons, and it has seen median sales prices go from under $450,000 just four or five years ago to almost $550,000 at the end of this year.
An even bigger spread comes in to play when we look at the Zip code 22180 just southeast of Tysons. Prices there have gone from under $550,000 five years ago to just under $700,000 today. So while Tysons itself hasn’t yet seen an impact from the major developments, the neighboring communities have taken notice, and that push will work its way closer to the hub as more residential buildings reach completion.
The real estate story line for Northern Virginia is still unfolding as we wait to see the outcome of construction near Tysons and how the neighboring locations will respond. One thing that we can say for sure is that the demand for homes here has strengthened in the past few years and it is very likely to increase even more in the coming years.
David Charron, president and chief executive of Rockville-based multiple-listing service MRIS, writes an occasional column about the Washington-area real estate market.