The lack of homes for sale has taken its toll on the housing market in Northern Virginia, as it has in other markets. In every jurisdiction in Northern Virginia, there is just a little more than a month’s supply of homes on the market, says Andrew Strauch, vice president of Bright MLS in Rockville. A balanced market has about a six-month supply of homes.
“The number of active listings was down 18 percent in February compared to February 2017 in Northern Virginia,” says Strauch. “Hopefully, part of the reason listings were so low is that the milder weather for much of the winter made the buying season robust in January and February.”
The number of homes that sold in Northern Virginia dropped 4.11 percent year over year for February, according to Bright.
“Homes in Northern Virginia may not be selling at the white-hot pace they were last year, but it’s still a very strong and healthy market,” says Nela Richardson, chief economist of Redfin real estate brokerage in Washington.
The slower pace of sales appears to be tied to the limited availability of homes rather than any slowing of demand, says John Eric, a real estate agent with Compass real estate in Arlington.
“There’s definitely pent-up frustration because of the limited number of homes for sale,” says Eric. “The slight uptick in interest rates is having an impact, too, because buyers feel that time is of the essence in getting into a house before rates rise more.”
Eric says buyers looking at properties in the $600,000 range face a lot of competition. At a recent open house for a $600,000 listing, 100 people toured the property in one afternoon. But even in higher price ranges, buyers are active. Recently, 45 buyers attended an open house at an Arlington listing priced at about $2 million.
Prices rising with demand
Despite the demand, Richardson warns that sellers should avoid overconfidence about the value of their homes.
“My advice for sellers this spring and summer is to not overprice,” says Richardson. “It’s still a seller’s market, but buyers are savvy. It’s best to stick with pricing not too far above or below market conditions. Conservative pricing will be in vogue this summer.”
Buyers are much more sophisticated at evaluating price points, says Eric, and if something is overpriced, it will just sit on the market.
In Northern Virginia overall, the median sales price rose 7.37 percent in February 2018 compared with February 2017, but price appreciation varies widely by jurisdiction.
While close-in Arlington gets lots of attention for its heated competition among buyers, prices there increased just 0.4 of a percent between February 2017 and February 2018, according to Bright MLS. Prices in Fairfax County rose 7.7 percent during that same period, and prices in Loudoun County rose 6.08 percent. Median sales prices rose 17.4 percent in the city of Alexandria and 13.9 percent in Falls Church.
The city of Alexandria’s jump in home prices was not only ahead of other Northern Virginia jurisdictions; it was also above the increases in the District, Montgomery County and Prince George’s County.
“Among the close-in Northern Virginia suburbs, Arlington is already high-priced,” says Richardson. “Alexandria, including both the city of Alexandria and the Alexandria section of Fairfax County, has that urban-suburban mix people are looking for. You’ve got walkability and places to go, yet the neighborhoods are also great for families. You also have a mix of condos, townhouses and single-family homes, which appeals to a lot of buyers.”
The volume of sales in the city of Alexandria rose by 18 percent, which was also ahead of most other areas, says Strauch.
New construction to add supply
Buyers in every price range and every location want turnkey properties without any projects, says Eric.
Some of those buyers will find what they want in new construction, such as the active-adult community at the Crest of Alexandria. The Christopher Companies is building condos in the community priced from the $400,000s, while Van Metre Homes and Craftmark Homes are building townhouses priced from the $600,000s. Van Metre is also building single-family houses there, priced in the $700,000s.
“Alexandria has always been a popular submarket because of its convenience to D.C. and to other employment centers,” says Dan Fulton, a senior vice president with John Burns Real Estate Consulting in Reston.
Other developments in Alexandria include Del Ray Place, a condo building in the Del Ray neighborhood with prices starting in the $300,000s. Robinson Landing, an EYA development on the waterfront in Old Town Alexandria, has prices starting at $1.7 million for townhouses and ranging from $1.5 million to $5.5 million for condos.
In Fairfax County, Winchester Homes will soon open West Grove, a community of 24 single-family houses near Fair Lakes. Evergreene Homes will open a model in May or June at Woodson Reserve in Fairfax, which will have 22 homes priced from $1.2 million to $1.4 million.
Sekas Homes is building townhouses priced from $1 million at Cadence on Center in the town of Vienna within walking distance of shops and restaurants. The company is also building townhouses priced from the mid-$800,000s and condos priced from the low $500,000s at Sunrise Square in Reston.
“Some more building is on the way in Fairfax County, with some parcels of land available for development, but usually new construction in the county is very expensive,” says Fulton.
A trend in Loudoun County is toward designing walkable communities.
“The Knutson Companies, Miller & Smith and Van Metre are building townhouses at Brambleton Town Center and Brambleton Town Center South that are walkable to shops and restaurants,” says Fulton. “Knutson also has two more projects coming soon in downtown Leesburg.”
While buyers may find limited existing homes for sale in Northern Virginia this spring, those who can wait for new construction or for homeowners to put their homes on the market may begin to see more availability later this year and in 2019.
●Every community in the area has only a month’s supply of homes, well below the six-month norm.
●Low inventory is creating an acute shortage of homes in the $600,000 price range.
●Loudoun continues to build new communities that are walkable.