Here’s an update on December real estate sales in Fairfax and Arlington Counties; Falls Church, Fairfax and Alexandria Cities.
The number of home sales (year over year) rose for the fifth consecutive month in December, while the number of homes on the market declined for the fifth month in a row. Pending sales (homes going under contract) rose for the ninth month in a row. We currently have an absorption rate (current inventory/monthly sales) of only 5 months.
Six months is the traditional supply figure for a “balanced” market, so that means . . . a seller’s market??!!
I guess the question is, what’s going to happen now? The winter is usually pretty slow in Northern Virginia real estate, but mortgage rates have been falling (around 5 % right now). The government has been buying mortgage-backed securities, trying to make sure rates stay down – and smart buyers are coming off the fence while sellers are still giving price and other concessions.
Median home sale prices in the area have fallen on the order of 20-25% since last year, to $340,000 – the same level as December 2003!
My own seat-of-the-pants view is that the next few months will be extraordinarily active. Sellers may soon realize that, also. I’ve seen several multiple-offer situations on attractive, well-priced properties.