For the first time in months, the number of homes sold throughout the region was higher in July than the same month in 2019, according to MarketStats by ShowingTime—statistics from Bright MLS, our local multiple listing service. It’s quite a change from the early months of the year, when the shutdown from COVID-19 affected more individuals than the virus itself.
Fortunately, the local home buying and selling market is resilient. We’ve seen a bit of a recovery from months such as April, May, and June, when many sellers and buyers hit the pause button waiting for the “all clear” to get back to business.
The number of July home sales is a good sign. A positive for sellers is the fact that there’s no shortage of buyers. Just ask anyone who’s made a recent offer on a home and is typically competing with other offers. Still, Arlington County, Alexandria City, and Washington, D.C., in July all showed inventory increases over July 2019—Arlington County and Alexandria City inventories were up 72 percent and 38 percent, respectively. But that’s not the story for the rest of the region.
Spurred by historically low interest rates, money is quite inexpensive right now, and the appeal to many is that it’s time to buy. According to Bankrate.com, the average 30-year, fixed rate mortgage had an annual percentage rate (APR) of 3.43 percent as of mid-August. A 15-year mortgage had an average APR as low as 2.98 percent.
Despite inventory gains in Arlington and Alexandria, the number of available homes throughout the region remains quite low.
In Fairfax County, where 4.5 percent more homes sold last month than in July 2019, inventory was 29 percent lower than July 2019. Prince William county inventory was down 60 percent over the same period, Montgomery County was down 39 percent, and Prince William County down 48 percent.
Average sold prices for July were up across the board over prices in July 2019: Arlington County (21 percent), Alexandria City (20 percent), Fairfax County (10 percent), Washington, D.C. (9 percent), Prince Georges County (8 percent), Prince William County (11 percent), and Montgomery County (nearly 5 percent).
As buyers ride the wave of low inventory, with few exceptions, homes are spending little time on market before going under contract. Out of 1,756 sold homes in Fairfax County in July, 65 percent were under contract in 10 days or less. Prince William County saw the same 10-day percentage among its 906 sales last month. In Arlington County, 64 percent of its sales were in 10 days or less, while 63 percent of Alexandria City sales happened in 10 days or less. For Montgomery County, Washington, D.C., and Prince Georges County, between 46 percent and 54 percent of homes sold in the first 10 days on the market.
These are uncharted waters. Low interest rates have been the norm for a while, and their appeal to buyers is great. As such, people are out there looking for anything they can find, putting many sellers in the driver’s seat right now. So the demand side of the equation still rules the day.
Abundant Market Influences
With the recent unpleasantness, however, the long-term dynamic still is hard to pinpoint. Telecommuting took on an importance not even fathomed at the end of 2019. Anecdotally, we’ve had buyers once looking near the city are now looking at more space and don’t mind that they might be an hour from the city. Angela Logomasini recently took a comprehensive look at this phenomenon.
While the pandemic definitely may have changed people’s minds—and gave them more options—about where to live, it’s definitely not been the only driver in this crazy race. The number of influencers on the market right now are almost too numerous to track, which is why it can be extremely challenging to predict the direction of the market.
Big city residents, in many cases, look like they’re moving to greener pastures. During the lockdown, reports abounded of people leaving their city-dwelling lifestyle. Those lucky enough and with the means headed to vacation homes and second residences away from some cities where social unrest has disrupted urban living.
As an aside, what’s to come of the commercial real estate market? How many businesses might discover their 40-office footprint in the middle of Washington, D.C., isn’t as feasible or cost effective as a smaller, five room drop-in office to accommodate occasional commuters who primarily work from home? That’s a story for another day, but it can impact where those employees choose to live, depending on their employers’ office plans and policies for the future.
Stat watchers and the media are eyeballing the nation’s two priciest markets—New York City and San Francisco—and indicators reflect a migratory reality. Streeteasy.com reported “[a] flood of new homes” on the market in July in New York. In addition, there was some early indication of prices heading downward.
“Only 14.5% of Manhattan sellers offered a discount in July, at a median amount of 5.2%,” according to Streeteasy.com. “But the homes that went on to close after off-market negotiations sold for a median of 10%, or $117,000, less than their initial asking price.”
The New York Post reported Aug. 14 that the 13,117 vacant apartments in Manhattan in July was a number 122 percent higher than July 2019. Rental rates over the same period have dropped a little more than 10 percent as supply outpaces demand.
In San Francisco, Zillow noted a 96 percent July increase in home sale inventory over July 2019, but with list prices down nearly 5 percent over the same period.
As of yet, we’re not seeing such an impact locally, where many are watching day to day to see which way the wind’s blowing. The inherent strength of the market in and around the nation’s capital is a positive sign. Low inventory can make it a challenge when buying, but homes are still reaching the market and sales are happening at a rapid pace. That’s where we come in.
Whether it’s assembling an offer that meets your needs and is irresistible to sellers, or pinpointing that optimum listing price for your home, you want to make sure you have strong, confident knowhow to come out on top. Stay tuned for further updates on the state of the market and opportunities throughout the Washington D.C. region.
Christopher Prawdzik and his wife Angela Logomasini are licensed Realtors® with Samson Properties in Alexandria and are members of the Northern Virginia Association of Realtors® Top Producer’s Club. Operating as D.C. Region Real Estate, they serve the Virginia, Washington, D.C., and Maryland real estate market and offer comprehensive real estate services, including 4½% full-service listings.
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