Northern Virginia Housing Market Update - February 2023
We have been on an interesting ride already in 2023! Right around the beginning of the year, we saw some good data on inflation that caused mortgage interest rates to go down which consequently brought more buyers to the housing market. Showings have increased, multiple offers are back in some areas of Northern VA and our early Spring inventory is starting to wake up from it’s winter rest. Well, we really haven’t had much of a winter, but the Spring market is here!
Let’s dive into the January 2023 housing numbers and see what’s going on. We’ll look at three key statistics to help us understand the Northern Virginia real estate market.
The three statistics are
Days on market
STAT #1: PRICES
The median sold price of single-family-homes dropped 1.9% from December 2022 with a median sold price of $825K.
But that’s not the whole story, we know that prices reported this month are a reflection of housing activity from 30 - 60 days ago which is right in the middle of the holidays. Inventory was lower and some of these properties carried over from early Fall. The high interest rates (around 7%) certainly affected the home sales in Northern VA last fall and winter.
Here’s the million dollar question: Will this 1% to 2% reduction of median sold price continue to decline through Spring? Let’s look at a few cities to see where prices are trending:
VIENNA - The median list price of new properties as of February 10th, 2023 was just over 1.9 million. The Vienna housing market continues to do well due to its proximity to Tysons Corner, 495 Beltway, new custom homes and desirable school pyramids.
FAIRFAX - The median list price was $1,179,500. Prices of homes in Fairfax rose quickly. The market here has been strong for sellers with many showings and strong multiple offer situations in desirable neighborhoods.
SPRINGFIELD - The median list price was $700,000. Springfield has come off its high from last year and is now starting to even out with a trajectory of solid price improvements. You’ll need to be ready to make quick decisions as the homes in Springfield are in high demand as well.
DEL RAY: There are currently only 4 detached homes in Del Ray with a median list price just over $1.6 million. If you include townhomes and duplexes, you’ll add 7 more homes to look at with a median list price of $1 million.
STAT #2: INVENTORY
We are still in an inventory crisis. We had 529 single family homes hit the market in January 2023. To put it into perspective, in January of 2018 we had 760 new active listings. Buyers need to be prepared to write competitive offers.
STAT #3: DAYS ON MARKET
If there are many homes for sale and not enough buyers, days on market is likely to be high, and vice versa.
The median days on market for single family homes were 34 days in January 2023 and 24 days in December 2022. As I mentioned in my last video, we're seeing shorter days on market due to the pent up demand and modest interest rates improvements.
Days on market is a leading indicator of how urgent buyers write offers on homes and it also sets the expectation for sellers on how long it may take to receive a reasonable offer.
Now that I’ve covered all 3 key market stats, I want to cover one hot topic which is mortgage interest rates.
Mortgage interest rates were improving in mid-January until the 1st week of February. However, the latest CPI data was not great, and so we are now seeing interest rates trending higher. However, there are still some great loan programs, including ARMs and temporary and permanent rate buy down programs that may make a lot of sense to many borrowers, so make sure you reach out to us so we can guide you in the right direction.
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