This month’s market update for Northern Virginia is marked by a continued trend of a slowdown in homebuying. This could be due to the higher interest rates and also the traditionally slow fall season. This month is also marked by extremely low levels of inventory (homes for sale). While last month, home prices were up from the previous year, home prices from the previous month were down. This month is different. The cost of a home is up 5% from this time last year and also up 2.5% from last month. Here is the market update for November 2022 highlighting unpredictable home prices.
What Agents are Seeing
The month of October for most agents was a slower, as is usual for this time of year. According to Bright MLS Home Demand Index, which is a 14% drop from the previous month and 29% lower from this time last year. There are less requests for showings though open houses were well attended. Some buyers we spoke to said they just starting to look again since the summer. They were very discouraged having to compete with so many buyers and feel more comfortable now. They are also not in any rush to buy a home, hoping interest rates will improve. It is interesting to note that the top 5 “in-demand” counties (based on requests to see homes) are Arlington, Prince William County, Alexandria City, Manassas City, and Stafford.
Using data from MarketStats by Showing Time, the median sale price for a home in Northern Virginia is now $599,900, up from $570,000 the previous month. This is a 3% increase from the previous month and 5% increase from this time last year. The first table below shows how, in general, home prices are going up by County. Last month, home prices dropped by almost 2% but it seems that was short lived as they are now back up. It seems that home prices are as unpredictable as mortgage interest rates.
By the end of October 2022, there were 2,720 homes sold. This is 23% decrease from last month and 33% decrease from last year. This could be due to the traditionally slow buying season and lack of inventory of homes for sale. It is important to note that 2021 was not a traditional real estate year as the pandemic along with very low mortgage interest rates created a buying frenzy with homes selling well over asking price in record time.
The average number of days it took to sell a home is now at 25, up 1 days from last month and up 6 days from last year.
The median price per square foot per home is now $282. This is up 2% from last month and up 6% from last year.
The total value of homes sold amounted to $1,600,703,372. This is down 7% from last month and down 34% from this time last year.
The month’s supply was 1.66; which is up slightly from last month’s figure of 1.58 and up from 0.97 from last year this time. This number shows how many months it will take to sell all the current homes now on the market. Most consider a balanced market, where buyers and sellers of homes are on the same playing field, to be about 3-6 months supply. It illustrates how low inventory really is at this time.
Mortgage Interest Rates
According to Nerd Wallet, the annual percentage rate on 30-year conventional mortgages is at 6.532. This is down 10 basis points from the previous week and up 347 basis points (about 3 percent higher) than last year. As you can see from the graph below, interest rates have been unpredictable day to day though they are still coming down from their highest point when rates hit 7.28 on October 23. Everyone is hoping rates will not go back to that level.
Advice to Sellers
We recommend that those thinking of selling their homes work with a trusted real estate agent who will assist them in understanding the current market (which shifts each week); addressing the condition of their home; using the latest technology and resources to market their home; and determining the best asking price. It is also wise to keep in mind that homes are taking longer to sell and with fewer offers. Negotiations and patience are of the utmost importance.
Advice to Buyers
For buyers who may be discouraged by higher interest rates, do not lose hope. Some buyers have been asking if they should wait until 2023. Lenders are actively working to create and revitalize programs to help qualified buyers bring down interest rates down. This may include buying down points and/or utilizing a “buydown” option. The advantage of buying now is that there is less competition and more room for negotiation.
The market update for November 2022 shows that there are less and less homes available for sale and home prices are unpredictable. The future is still uncertain as inflation and interest rates remain high. Still, life goes on and personal situations will call for either a home sale or home purchase. Thankfully, Northern Virginia remains a great place to live and own a home.
Questions/Concerns? Please contact me.
Also feel free to compare this update with last month’s Market Update – October 2022