Limited inventory continues to keep home sellers in control when it comes to price and demand. Even as mortgage interest rates flirt with 7 percent, the buyer side of the equation remains extremely competitive.
In Fairfax County, the number of new listings hitting the market in January were down more than 10 percent compared to a year ago. In December new listings were down more than 25 percent from December 2022, and in November, new listings were down 32 percent compared to November 2022. Inventory in Alexandria City was similar. In January, new listings were down more than 14 percent compared to January 2023. New listings in December also were down about 14 percent compared to December 2022, and new listings in November in Alexandria City were down more than 41 percent compared to the previous November.
But we’ve seen a bit of a shift for February. The number of new listings hitting the market were up 5.2 percent over February 2023 in Fairfax County. And in Alexandria City, new listings were up 1.3 percent in February compared to February 2023.
It’s too early to determine if this is just a blip or a trend, but as we head into spring, inventory can creep higher. The real question is how many buyers will brave the mortgage market.
Historically, interest rates have been much higher than they are now, but it was the drastic change a few years ago that really hit buyers in the wallet. On August 5, 2021, the 30-year fixed-rate mortgage rate was as low as 2.77 percent, according to Freddie Mac. Just six months later in February, rates hit nearly 4 percent, and by June 2022 rates hit nearly 6 percent.
For the past 18 months, rates have settled a bit, hanging out a little under or above 7 percent. Some buyers were hoping that higher interest rates could spur some lower home prices moving forward, but that reality hasn’t materialized. Median sold prices for homes in Alexandria City in February were up 30 percent compared to February 2023. In Fairfax county, the median sold price was up more than 10 percent last month compared to a year ago.
It’s a simple reality of supply and demand. While some buyers have hit the sidelines in recent months, there’s still an abundance of eager buyers out their fueling demand, which keeps sellers in the driver seat as we head into spring.
Christopher Prawdzik is an associate broker with Samson Properties in Alexandria. Operating as D.C. Region Real Estate with his wife, Angela Logomasini, they are Realtors® serving the Virginia, Washington, D.C., and Maryland real estate market and offer comprehensive real estate services.
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