[Updated to include comments from Northern Virginia Association of Realtors.]
Who’d have thought, pre-pandemic, that the Northern Virginia real-estate market not only would have withstood COVID, but prospered in an era of economic uncertainty?
Yet that’s what has happened – and in February, the ongoing market strength nearly boosted the market over the $1 billion total in sales volume, something that would have been a pipe dream for the second month of the year in times gone by.
A total of 1,497 properties went to closing across Northern Virginia in February, according to figures reported March 12 by MarketStats by ShowingTime, based on listing data from Bright MLS.
That’s up a whopping 25.4 percent from the 1,194 transactions recorded in February 2020, representing sales in Arlington and Fairfax counties and the cities of Alexandria, Fairfax and Falls Church.
“Every area is hot,” says Derrick Swaak, partner and managing broker with TTR Sotheby’s International Realty in McLean and 2021 president of the Northern Virginia Association of Realtors (NVAR).
“The only differentiator is the type of home or price point,” said Swaak, pointing to properties under $1 million as those most likely to be moving expeditiously.
“Competition for well-priced, desirable detached homes was fierce in that price point, with many buyers waiving contingencies just to get their offers looked at,” Swaak says. “Luxury homes across the region [over $2 million] and luxury high-rise condos ]over $1 million] were still selling, but represented a more healthy, balanced market.”
Average sales prices were up only slightly, rising 2.1 percent to $661,391, but part of that is explained by the smaller number of single-family homes in the overall sales mix compared to a year before.
But there also could be another factor at play: the market could simply be approaching the point at which increases in housing prices are not sustainable, as they are beginning to significantly outpace wage increases.
Can Northern Virginia truly sustain a market where the average sales price of a single-family home tops seven figures? The region may be about to find out, as of the three legs of the real-estate stool, increases were posted across the board:
• The average sales price of single-family homes stood at $956,026, up 7.8 percent.
• The average sales price of attached homes, such as townhouses and rowhouses, was up 1.8 percent to $480,224.
• The average sales price of condominiums was up 0.5 percent to $378,091.
A total of 203 properties changed hands for more than $1 million, including eight for more than $2.5 million and two for more than $5 million.
Add up the sales and prices, and total sales volume for February was $985,594,433, up 27.4 percent from $773,463,783 a year before.
Homes that went to closing for the month garnered 100.2 percent of listing price – bidding wars are not uncommon these days – which was up from 99.6 percent a year before. Homes that went to closing spent a relatively brisk, winter-wise, average of 27 days between listing and ratified sales contract, up a tick from 26 a year before.
“Mortgage rates are moving up from the historic lows we experienced at the end of last year, but they still remain at very attractive levels,” NVAR CEO Ryan McLaughlin said. “We anticipate rates may continue to increase slightly, but don’t anticipate that these relatively small hikes will dampen buyer interest.”
Inventory has been the sticking issue ever since the market started its post-COVID spurt last summer, and for the month of February, there were 1,579 properties available at the end of the month, down 7 percent from a year before.
Inventory does vary significantly by community, however; in Arlington, for instance, the 380 properties available represented an increase of 119 percent from a year before, while in Fairfax, the 963 properties on the market represented a decline of 27 percent.
Any growth that occurs in 2021 will be on top of the already strong year-end sales totals for 2020.
Average home-sales prices across Northern Virginia reached an all-time high in 2020, and total sales volume was second only to the pre-recession boom of 2005, as the market shrugged off COVID and the resulting government-imposed lockdown to see its first year-over-year sales increase since 2017.
A total of 22,840 properties went to closing during the year, according to results reported by the Northern Virginia Association of Realtors and MarketStats by ShowingTime.
The total represents an increase of 3.7 percent from 2019, following two years of modest sales declines of 1.8 percent and 0.5 percent.
Over the 46 years the Sun Gazette has kept records, yearly sales have ranged from a low of 13,783 in 1995 to a high of 32,735 in 2004.
But it has been a roller-coaster ride. Year-over-year average prices have risen 27 years, declined another 18. The longest consecutive winning streak came during the nine-year period from 1996 to 2004, where sales progressively rose from 13,783 to 32,735, in part because large swaths of Fairfax County were being used to build new housing.
The longest losing streak in sales came during a four-year stretch from 2005 to 2008, where sales dipped from the 32,735 reported in 2004 down to 17,400 before rebounding in 2009 (although sales were then again down in 2010 and 2011 before a more robust turnaround arrived).