Mini Market Update - Rising Supply

The tax credit expired about a month ago and we are feeling the effects in the immediate Northern VA market. Housing inventory is sitting around and we are seeing attractive price reductions on regular sales. Meanwhile, sellers are still listing their properties in droves since it is the spring/summer market. So buyers currently have more options than they have during the past year or so. We have yet to see whether or not this is temporary - maybe buyers are in shock from missing the tax credit deadline and will start looking again soon. It's hard to believe that all of those buyers simply disappeared, but hey, I've been wrong before. The media news of interest rates rising in the near future will surely light a fire under buyers but maybe, like all things, it will take an actual rise for people to actually take action! The most likely outcome during the next few months may be a more balanced/reasonable market with some negotiating room for buyers and sellers no longer being able to list really high just because they know buyers are desperate for the tax credit!

Supply and Demand through March 2010

This chart clearly demonstrates one of the core reasons for the extremely high buyer-buyer competition that exists in our local marketplace today. Since December of 2007, the gap between the number of houses available and the number of houses selling has been steadily narrowing. We are seeing fewer and fewer choices available per buyer and buyers need to be aggressive when they find a home that works for them.



When we study the sold price as compared to the list price, there is also a dramatic trend. Homes in Fairfax County are selling closer and closer to the list price, which goes hand-in-hand with what we would expect from the supply and demand graph. Also, this graph excludes the seller subsidies. So when the average sold price is 97% of the list price, it means the average is list price with a 3% seller subsidy. Some homes sell above the list price and some sell below the list price.

Median Sale Prices through March 2010

There are seasonal fluctuations in the median sales price for homes. However, it is pretty clear from the data as well as our direct experience with the market that the bottom of the market passed in late 2008 and early 2009. Buyers should not see a decrease in the value of their home after they buy. Sellers are feeling more comfortable putting their homes on the market in an improving/stable market rather than a decreasing market. Interestingly, we've been seeing less problems with appraisals as well - they seem to be appraising at the higher contract prices.

Days on Market through March 2010

Things are selling quicker in Fairfax County - the average days on market in March 2010 was only 47! This was most likely influenced by the expiration of the tax credit in addition to the seasonal fluctuations of springtime.

The Data Based Realtor

This database programmer-turned-real estate agent is focused on providing you with data to help you make informed decisions, has a straightforward, non-salesy style, and shares your goal - whether it is to help you purchase a home or help you sell a home! The field of real estate has been in a state of constant flux for the past few years and Sonal keeps up with the changes.

Sonal gathers her own statistics on local Fairfax County real estate trends and shares them with you here. The Fairfax County market normally performs better than the national real estate market. Make sure you know the reality of your local market!