February Market Update
“The month of February was a nice surprise for many sellers in our region,” said Thai-Hung Nguyen, member of the Northern Virginia Association of Realtors® Board of Directors. “The inventory was scarce and buyer traffic was high, with most buyers encountering competition in multiple offer situations,” says Nguyen. “We found that in Fairfax County, more buyers encountered multiple offers for homes priced below $1 million. In Arlington, multiple offers were common up to the $1.5 million range,” reports Nguyen. “I do believe in the weather factor this year. We had more buyers in the market than this time last year. As a result, sellers often ended up with offers with escalation clauses,” Nguyen says.
2020 NVAR President Nicholas Lagos, with Century 21 New Millennium and broker/owner of Gawen Realty in Arlington, explains that the NVAR region market continues to show strong sales even as inventory remains scarce. “The good news is that we saw a 12% increase in listings as a region, which may allow buyers a few more choices for housing,” he says. “However, prices increased by 13% in the NVAR region, pushing limited options further out of reach for many buyers,” says Lagos.
“There was also an uptick in inventory in Alexandria, with active listings almost 8% above 2019 listings. As Alexandria is one of the jurisdictions close to the new Amazon HQ2 in Arlington, it is encouraging to see an increase in new listings there. Arlington listings were down by about 22%, keeping prices high, at 17% above the February 2019 average,” Lagos says. The number of February home sales in the NVAR region, reported at 1,193, was the highest since 2007, when there were 1,561 homes sold.
To remain competitive in such a market, buyers are working with their Realtors® to structure creative offers and locate lenders who offer a variety of loan products. Working with a seasoned professional can help buyers make smart decisions that limit potential exposure. “This is often the key to finding success in a seller’s market,” says Nguyen. “In addition to price escalation clauses, we are seeing offers that waive home inspections, appraisal contingencies and even financing contingencies in situations where buyers still plan to borrow funds for the purchase. “The two biggest challenges in a market like this are: 1) appraised value doesn’t keep up with the market change, and 2) buyers may get too aggressive in their offers and make careless mistakes that result in default,” Nguyen says. “With mortgage rates at all-time lows last week and spring arriving in the region more than three weeks ahead of schedule, according to the Washington Post, our members are expecting a brisk spring market,” says NVAR CEO Ryan Conrad. Yet affordability continues to be a roadblock for many would-be buyers in this region.