April Market Update: Competition for Limited Inventory
"As our Northern Virginia real estate market approaches the two-month mark under COVID-19 conditions, residential housing is still a hot commodity for motivated buyers,” says Nicholas Lagos, president of the Northern Virginia Association of Realtors®. “Responding to the needs of buyers and sellers, Realtors® have been nimble in adjusting their procedures while ensuring safe practices under the circumstances,” Lagos says. “With inventory levels reaching all-time lows, homes across the NVAR footprint averaged more than 100% of their list price. “While the average sold price increased regionally by nearly 7.5% above the April 2019 levels, the pandemic has affected our normally active spring listing rush,” Lagos says, “but the data across the region shows buyer demand is vigorous and active.
“As expected, the April 2020 market saw a decrease in overall sales volume primarily due to the stay-at home orders imposed by Governor Northam in early March,” Lagos says. “With many potential buyers and sellers keeping their distance, existing inventory shrank even further,” Lagos says. Despite strong buyer interest, the limited number of available homes for sale has reinforced the strong sellers’ market in the NVAR region, which covers Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton.
Arlington County, Alexandria and Fairfax County saw new listing inventory drop 17%, 36%, and 35% respectively compared with the number of homes available for sale in April 2019. “Interestingly, the type of housing that is selling is single-family homes, then condos and lastly townhomes. The National Association of Realtors® has reported that more people are buying multi-generational homes and first time home buyers are going for condos; the townhome that used to be the young family’s first-time buy isn’t necessarily the case anymore,” Baxter says. Buyers are also acting quickly, Baxter explains. “The number of days on market is an average of 13 days, so we are still in a multi-offer situation. We are in a severe housing shortage which means more of a competitive situation for buyers,” Baxter says.
According to Dr. Terry Clower, director of the Center for Regional Analysis at George Mason University, rising unemployment levels may not have the same impact in Northern Virginia as elsewhere in the country. Speaking about the region’s market during an April 30 webinar hosted by NVAR, Clower said, “The NVAR region is dominated by the Professional and Business Services sector, which helps to stabilize us.” The federal government underpinnings also contribute to that stabilizing effect, Clower explained. Pre-pandemic market conditions in the NVAR region have helped to prevent a decline in home values, explains NVAR CEO Ryan Conrad. "Given the uncertainty surrounding COVID-19, it is encouraging to see buyer activity that reinforces the resilience of the Northern Virginia economy,” he said. April 2020 Regional Home Sales Compared to April 2019: Northern Virginia Data from Bright MLS as of May 6, 2020; total sales and listings may not include garage/parking spaces. The Northern Virginia Association of Realtors® reports on April 2020 home sales activity for Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton.
A total of 1,725 homes sold in April 2020, a 20% decrease below April 2019 home sales of 2,157. Active listings decreased this month compared with 2019. Listings were down 17.88% below last year, with 2,057 active listings in April, compared with 2,505 homes available in April 2019. The average days on market for homes in April 2020 was 13 days, a decrease of 27.78% compared to the 18 DOM for homes in April 2019. New listings fell by 34.13% in April, to 2,111, compared with 3,205 new listings in April of last year. The average home sale price rose by 7.48% compared with last April, to $667,527. The April 2019 average sale price was $621,069. The median sold price of homes this April, which was $596,500, rose by 6.52% percent compared to the median price of $560,000 in April 2019.