Recap Of The 1st Qtr 2012 Northern Virginia Real Estate Market

Inventory , Inventory. Inventory.  March 2012 was the 15th month in a row where the month over month inventory numbers were less than the prior year.  And it was the 7th month in a row with a deficiency greater than 10%.

Many of my buyers are either not finding the type of home they want or they are getting involved in multiple contracts.  I had one buyer recently get out of the resale market and explore new homes even though that would mean living in his current situation a bit longer.  We contracted on the new home but while we were writing the contract another buyer stopped by the model with the intent to buy his lot.  So it is happening in new homes as well as resales.

Here are the numbers for the first quarter.  They cover the counties of Arlington and Fairfax and the Cities of Alexandria, Falls Church and Fairfax and represent sales recorded in the Realtor MLS system and do not include private sales.

Detached Townhome Condo
Units Sold 2012/% chg 1476  +4.24% 965  +1.26% 950  -5.75%
Units Sold 2011/ 1416 953 1008
Avg Price 2012/ % chg 629,909  +4.3% 401,161  +2.5% 279,491  +.05%
Avg Price 2011 604,123 391,322 278,182
# Homes for Sale 3/31/12 2085 -3.11% 589  -21.36% 831  -21.90%
# Homes for Sale 3/31/11 2152 749 1064

 

 

 

 

 

PRICES

Prices in all 3 categories were up in the first quarter.  As mentioned in my year end recap, my unscientific study of the market over the last 20 years indicates that when  detached home and townhome price increases are greater than condos, it means the market feels prices are attractive and affordable.  Buyers are able to comfortably step up to the next level of housing.  Conversely, when the condo activity is more robust, it often means prices are too high and buyers need to step back to something more affordable.

INVENTORY

As stated above, this is the real story.   Discretionary sellers have not reentered the market in force.  By discretionary I mean folks who do not need to move but would like to move up or move down and can wait until the market is, in their eyes, “favorable.”  A large majority of sellers are in the market because they need to move – job relocation, marriage, divorce,  new baby, financial distress, investors flipping property, etc.  Until “regular” sellers start to come back, demand will exceed supply.

SALES ACTIVITY AND MARKETING TIME

Marketing time is now measured in days and weeks, not weeks and months.   A properly priced and presented home should generate a contract relatively quickly.  I have never understood the average marketing time stats.  They never seem to match up to what I feel is happening in the market.  For instance in March 2012 it states that the average time on market was 72 days vs 71 in March 2011.  That just doesn’t ring true.  I am jumping on listings just days old only to find they have contracts being negotiated.  I guess there are enough improperly priced homes that are sitting on the market for long periods that adversely impact the average.   For instance, I looked recently at a condo community where the most recent sales were in the $260s.  The one my client was interested in was on the market just 3 days and our contract was one of 3.  There was a similar model to the one we were bidding on.  That comp had been on the market for 177 days.   Why?  It was being offered at $305,000.

CONCLUSION

Now is a wonderful time for sellers to enter the market.  If you would like to discuss your options in more detail, please give me a call.

Photo credit: digitalart

 

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