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Tim Trainum Properties
REALTOR®, Northern Virginia - Top Producer!
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Buyers | 34 Posts
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Sellers | 29 Posts

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June
14

Home Prices Trend Up in May
May Prices Increased 2.3% from April: The median home price in Northern Virginia continued to trend up hitting a new high of $660,000, adding another $15,000 to last month's $645,000 median price. All major sub-markets in Northern Virginia increased in price between 2 to 3% with Arlington leading at 6%. Loudoun was the only sub-market declining in May (-3%).

The unrelenting increase in interest rates is impacting buyer behavior. Since January, interest rates have increased from 3.5% and began to level off at 5.5% (up 55%). With this week's release of the new inflation data, the 30-year mortgage rate is nearing 6%. At 6%, the mortgage payment for an average loan ($600,000) has increased $900/mo since January. Alternatively, buyers have lost $170,000 in purchasing power when trying to maintain the same mortgage payment at 3.5% compared to 6%.

Low Inventory Persists | New Listings Decline
Buyer Behavior Shifts; Sellers Take Notice: Just like when the housing market experienced a buyer surge in late 2020 after interest rates fell 40%, we are experiencing a shift in buyer behavior resulting from the dramatic increase in rates. Since March, showings in Virginia have fallen over 35%. In fact, we're seeing a level of showings in June usually not seen until much later in the year. Despite the fall in showings (buyers), we continue to experience steady pricing. This may be a result of New Listings declining 10 to 20% in 2022, depending on the sub-market. This means there have been nearly 3,100 fewer homes in Northern Virginia offered for sale from Jan-May 2022 than in the same 2021 period. We are seeing the elimination of the "excess number of buyers" participating in the market since 2020-21, combined with a decline in listings contributing to persistent low inventory. The result is a more balanced market between buyers and sellers.

Seller Price Reductions Spike Higher
The table below illustrates the underlying behavior between buyers and sellers. Comparing the first two-week period of March and June in Fairfax County, we can see why prices have remained strong. In two-thirds of the home sales, Buyers are still escalating prices above seller ask to win. Correspondingly, the average buyer escalation remains elevated at 106%. The most notable change in behavior is the spike in seller price reductions. Earlier this year, MLS data showed less than 10% of Active listings experienced a price reduction. By March, this increased to 13%. Currently, MLS data shows of the 1,300+ Active listings in Fairfax County, nearly 30% have experienced a price reduction.

 


Disclaimer: All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) or information provider(s) shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumers personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Information on this site was last updated 09/25/2022. The listing information on this page last changed on 09/25/2022. The data relating to real estate for sale on this website comes in part from the Internet Data Exchange program of Bright MLS (last updated Sun 09/25/2022 10:05:56 PM EST). Real estate listings held by brokerage firms other than Tim Trainum Properties may be marked with the Internet Data Exchange logo and detailed information about those properties will include the name of the listing broker(s) when required by the MLS. All rights reserved. --

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