Market Report – August 2024

The current real estate market in Northern Virginia continues to evolve. It feels like we’re on the cusp of change. With decreasing inflation, lower mortgage interest rates, increasing housing inventory, upcoming elections, and the end of the summer season, change is undeniable. Still, there is opportunity in every market and this month’s market update is no different. This article with take you through the numbers then highlight what we think everyone should know. The Northern Virginia Market Update August 2024 shows we are on the cusp of change.

Consumer Price Index News

The latest Consumer Price Index (CPI) report was announced this morning. The latest figure puts inflation (the cost of goods and services) at 2.9% up from last year. This is an improvement of 0.1% from the previous month. The signs are showing that inflation continues to go down toward the goal of 2%. This goal was set by the Federal Reserve and all indication is that they will lower the federal funds rate at their next announcement on September 18th. This would mean lower mortgage interest rates, which is what everyone has been waiting for.

Mortgage Interest Rates

Mortgage interest rates are lower, now between 6.2% and 6.5%. This is the lowest the rates have been this year. Most experts think that if the Federal Reserves lowers the federal funds rate, we could see rates between 5.8 and 6% by the end of the year. This would be great news for home buyers who could afford to borrow more toward the home of their dreams. It’s also good news for home sellers who would have more home buyers looking at their home for sale. With greater competition, comes better prices for the home owner.

Statistics and What it Means

Using statistics from MarketStats by ShowingTime, we looked at 10 counties in Northern Virginia – Alexandria, Arlington, Fairfax, Falls Church, Fauquier, Loudoun, Manassas City, Manassas Park City, and Prince William. Here are the highlights for Northern Virginia.

The median sale price for a home in Northern Virginia is now $685,000, which is down 5.5% from the previous month and up 9% from this time last year. This is the average of 10 counties combined. Prices varied depending on what county you are looking at. The table below shows the median sold price in Loudoun at $746,437 and in Prince William at $591,740.

At the end of March 2024, there were 2,801 homes sold in Northern Virginia. This is down 1% from the previous month and up 14% from last year. The decrease could be an indication of the end of the summer selling season while the increase from last year shows better interest rates. In July 2023, interest rates were about 7.5% compared to the 6.5% range we saw in July.

The number of Days on Market for Northern Virginia is now 15 days, this is 2 days more than last month and 2 days more than last year. It is taking a little longer to get homes under contract.

This month, there are 3,000 homes for sale, which is a 5% increase from last month. Additionally homes sold at 100.5% of the original asking price. In general, home owners are adjusting to the lower home sale prices and getting what they expect for their homes.

Inventory Levels

The phrase “Month’s Supply” refers to how many months it will take to sell all the homes currently on the market. Most consider a balanced market, where buyers and sellers are on the same playing field, to be about 3-6 months supply. Currently, Northern Virginia has a month’s supply of homes for sale of 1 month. This indicates that though inventory is improving, we do need homes to go on sale to meet the demand.

Bright MLS Buyer Demand Index

According to Bright MLS Home Demand Index, buyer demand in the Washington Metro Area (which includes Northern Virginia) remains “Limited”. The Bright MLS | T3 Home Demand Index measures and tracks consumer and real estate professional behavior related to shopping for real estate. They look at metrics such as the number of views of homes online and in-person showings. Ratings are categorized into 5 score points: Limited (under 70 points), Slow (70-89), Steady (90-109), Moderate (110-129), and High demand (over 130).

This month, buyer demand is SLOW across most areas and may be due to the winter season. Here are the top 5 in Northern Virginia: MODERATE in Arlington (126) and Alexandria City (119); STEADY in Manassas City (100) and Prince William (91); and SLOW in Stafford (87). Loudoun County’s buyer demand is LIMITED at (59).

What Does This All Mean

As the Summer real estate market in Northern Virginia is coming to an end, we are at the cusp of a new season. This next month will set the stage for a more active Fall market with gradual changes marked by lower mortgage interest rates and more availability of homes for sale.

Advice to Sellers

For homeowners in Northern Virginia, accurate pricing and good condition remain crucial ingredients to ensure a smooth and successful sale. If done properly, expect to get your asking price and go under under contract in about 2-3 weeks. The coming months will be about preparation, preparation, preparation. Don’t do this alone. Get expert advice on what are the most urgent projects to tackle that will reap you the most rewards. If you need help, please reach out. With more activity this Fall, it’s a great time to get your home on the market.

Advice to Buyers

This is not the time to wait for better rates. Work with a professional lender to determine your budget and then begin your search. Our advice is to lock in a great rate and ensure your lender can always lower the rate before your loan is approved. If you have any questions, please reach out.

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Bottom Line

The market update for August 2024 shows a changing real estate market in Northern Virginia. Mortgage interest rates are going down and the amount of homes for sales is slowly increasing. We look forward to keeping you informed every step of the way.

Questions/Concerns? Please contact me

Denise Fuller, Real Estate Specialist