Low inventory and competition for homes in popular areas near the city and Metro stations are impacting Northern Virginia this spring along with the rest of the Washington-area market. As in Maryland and the District, buyers came out earlier this year and started the spring buying season as early as February.
“Sellers who put their homes on the market in late January and in February went under contract almost immediately because buyers were out looking early to get ahead of the competition,” says Reggie Copeland, an associate broker with Long & Foster Real Estate in Great Falls. “Now that we’re settling into spring, homes are still selling quickly, but not quite as quickly as earlier in the year.”
Northern Virginia’s neighborhoods vary widely in price range and types of homes, which means that looking at the area as a whole can be difficult. Nela Richardson, chief economist for Redfin in Washington, puts it this way: “Northern Virginia is a mixed bag. In Alexandria there’s about a two-month supply of homes and prices are up. But in Arlington, sales, new listings and inventory are all down because that area is really struggling to get any new inventory.”
February statistics from the Northern Virginia Association of Realtors (NVAR) showed disparities from one location to the next, with year-over-year median prices up 21.4 percent in Falls Church City, 9.38 percent in Fairfax City and 5.06 percent in Alexandria, but down 1.57 percent in Arlington County.
In general, homes are selling fastest and with multiple offers in Reston, Arlington and Alexandria, where there is less than a two-month supply of homes to meet current demand. In Great Falls, however, there’s a nine-month supply of homes, according to NVAR.
“Unless new listings turn up in these tight markets this spring, the lack of inventory will push prices up in May and June,” says Jonathan Hill, vice president of marketing and communications for multiple-listing service MRIS in Rockville. “June is always the peak month for sales in all the D.C.-area jurisdictions.”
According to MRIS, Northern Virginia’s inventory was up 0.6 percent in March 2016 from the year before, with a total of 7,700 properties on the market. Median sales prices were up 1.1 percent, from $415,500 in March 2015 to $420,000 in March 2016. With the slight increase in inventory, homes in Northern Virginia are selling more slowly than they were last year, with the average number of days a home stays on the market increasing by 1.5 percent, to 68 in March 2016. In Northern Virginia, condos sell in just about the same number of days, 67, while detached homes and townhouses sell the quickest, in an average of 53 days.
Copeland says that homes in the upper price brackets are taking longer to sell, with most in the $1 million-plus price range staying on the market for at least 200 days. He says homes priced at $2 million and up take even longer to sell.
“There are so many different markets in Northern Virginia,” says Copeland. “For instance, today there are only three homes listed for sale in Chantilly priced from $700,000 to $900,000, and there are only five in that price range under contract right now. In Great Falls, there are about 175 active listings right now but there were 275 last year. About half of those just got taken off the market for the [Christmas] holidays because they didn’t sell.”
The shortage of homes hits particularly hard in different price ranges, Copeland says.
“If you’re looking under $500,000, you’ll find the market is hot everywhere, with lots of competition,” he says. “Last month, there were six townhomes priced around $350,000 in a Centreville community that went under contract within six days — all with multiple offers. Now there are none available in that development.”
Copeland says that besides homes under $500,000, another price category where buyers face tough competition is for homes priced from $600,000 to $1 million, particularly in Arlington County.
“In Arlington County today there are 500 homes listed for sale, and 400 of them are under contract,” says Copeland.
The competition is also fierce in popular communities such as Franklin Glen in Fairfax, where four single-family homes went under contract within less than 30 days in February after receiving multiple offers, according to Copeland.
“We’ll continue to see more homes coming on the market this spring, but there are plenty of buyers out there, too,” Copeland says. “Lots of first-time buyers who have been on the fence the last couple of years are looking now, especially now that there are more low-down-payment loans available to them and their rents have gone up so much that buying just makes more sense.”
First-time buyers, move-up buyers and downsizing buyers can find homes under construction in Northern Virginia that may meet their needs.
“Developers are really responding to buyers and going full-force into designing homes in walkable communities,” says Dan Fulton, senior vice president of John Burns Real Estate Consulting in Reston. “They’re adding roof decks to four-level townhomes to satisfy buyer desire for outdoor space.”
For example, Knutson Communities and Ryan Homes are building upscale condos and townhouses at Crescent Place in Leesburg within walking distance of shops and restaurants. Fulton says these residences appeal to professional couples and empty-nesters who often like the option of adding an elevator. The residences are priced from the upper $300,000s to the $500,000s. Knutson will be building similar residences at Brambleton Town Center within walking distance of shops, services and restaurants.
Condos and townhouses will be available soon from Stanley Martin Homes at One Loudoun, another walkable community. Wormald Homes is designing crescent-shaped residences with large decks built directly above shops, priced from the $400,000s at Cascades View in Sterling.
“First-time buyers can find townhomes priced in the $300,000s at Brambleton and single-family homes on small lots at Stone Ridge in Loudoun County, both from Van Metre,” says Fulton. “Brambleton has a wide range of ‘suburban’ townhomes, not walkable to the Town Center, with prices from the $300,000s into the $600,000s.”
Buyers willing to spend $500,000 to $600,000 for a townhouse often see them as an alternative to a single-family house, such as the 22- and 24-foot wide townhouses at Discovery Square in Herndon. The houses have a fourth level that adds living space and are within a relatively close commuting distance to Reston and Tysons Corner, says Fulton.
Some builders have expanded their development to western Loudoun County to areas such as Purcellville and Waterford, Fulton says, because land prices in eastern Loudoun County have risen so high. In addition, Stafford County, particularly at Embrey Mill in North Stafford, has become the “new frontier” for most of the larger regional builders in Northern Virginia, he says.
“Buyers can save $100,000 on a home if they’re willing to move from Prince William County to Stafford County,” says Fulton. “The homes are more affordable, but you have to be willing to fight the traffic past Quantico.”