Low Housing Inventory in Northern Virginia
As we head into the end of the winter season, more and more real estate experts are commenting on the very low housing inventory around the country. The number of active listings is down 25% from last year. In Northern Virginia, the same seems to be holding true. On average, the area saw a 28% decrease in active listings from last year. There is most definitely low housing inventory in Northern Virginia.
Looking at number of closed home sales by county using Bright MLS data, it shows some areas more affected than others. While Prince William and Fairfax counties saw closer to the national average in home sales, Loudoun county experienced a 54% decrease from January 2021 and Fauquier had only a 12% decrease.
WHY AREN’T HOME OWNERS SELLING?
One reason for the low housing inventory in Northern Virginia is that we are in the winter season. Traditionally, this has always been a slow time for real estate. Most people are just not making major moves during this time compared to summer months when the weather is better and kids are out on break.
Another reason is that those who have considered selling don’t think this is a good time to move. According to a recent survey by Realtor.com, 1 in 4 potential home sellers said they will not list their homes because they would have no where to move to. The market for buyers is that difficult. They are afraid of not being able to compete with buyers for existing homes. Realtor.com Chief Economist Danielle Hale said, “With housing costs rising, as home prices and mortgage rates both increase, affordability is more important than ever to households. Data suggests that this may be as true for sellers, many of whom will also purchase a new home, as it is for homebuyers.”
WHAT ARE BUYERS TO DO?
So with low inventory and high demand, buyers are still facing competition when submitting an offer on a home. Wanting to take advantage of low mortgage interest rates, buyers have three options: (1) be prepared to pay well over the asking price on homes and waive some contingencies, (2) wait to buy and risk high interest rates, or (3) consider sectors of the housing market like condos that are not going through the same jumps in price.
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Some surveys suggest that homeowners will begin selling their home in the next 3-6 months. Until then, the market appears to remain in the seller’s advantage.