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Tim Trainum Properties
REALTOR®, Northern Virginia - Top Producer!
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Home Prices Trend Down in July
July Prices Fell 3.3% from June: The median home price in Northern Virginia softened by another 3% in July after hitting a new high of $660,000 in May. All major sub-markets in Northern Virginia declined in price between 1 to 5%, except Arlington which bucked the trend hitting a new price high of $738,000.

Even with the recent softening in prices in June (3%) and July (3.3%), it's important to note prices are still holding up as the market rebalances. For example, the median price in Fairfax County is up 13% since January, and 8% since July last year. The market is indeed rebalancing as shown by some important dynamics in the table below. However, it's doing so, to date, still within the context of strong prices due to the persistent relatively low inventory.

Continued Rebalancing from June to July
Strong Shift Seen in Contract Price Profiles: Since the beginning of the year, interest rates have markedly increased causing a reduction in buyers and a weakening in strong buyer sentiment experienced in 2020-21. During 2020-21, we commonly saw 80% of homes going under contract in less than 10 days producing an exceedingly high number of multiple offers, waived home inspections and appraisals, as well as buyers offering aggressive price escalation above seller ask, oftentimes 10% higher than list price. Today, we're seeing more days on market with just 60% of homes coming under contract in less than 10 days. Contract selling profiles have shifted with slowing days on market. Instances of contracts with escalating prices have declined, while more and more contracts are being won at full ask, and even below seller ask. Home inspection and appraisal contingencies are more common now. The table below illustrates the progression from earlier this year as well as the softening that has occurred compared to the same time last year. We are now at nearly an equal balance between homes sold below ask, at full ask, and with price escalation.

Return to Pre-COVID Buyer & Seller Behavior; But Low Inventory Still = Seller Advantage
A more balanced market is the label of 2022. In fact, the number of home showings (buyers) and listings (sellers) are just about exactly where it was in July 2019. Inventory is also very similar with July 2022 at 1.31 months compared to July 2019 at 1.18. Likewise, we are seeing similar Contract Ratios too. The Contract Ratio is an important measurement between current contracts and current listings. While inventory receives most of the attention, the downside is it's a lagging measurement since we're comparing "past period sales" (typically 30 days) to homes currently active for sale. Whereas, the Contract Ratio measures "current" homes under contract to "current" actives. During 2020-21, we commonly saw Contract Ratios in the 1.30 range. This means the homes under contract and those active for sale were a 58/42% split. Most of 2022 has been at or near 1.00 (50/50%) with some dips below, like July's 0.71 (42/58%) compared to 0.88 (47/53%) in July 2019. Most recently, during the week ending August 21, the Contract Ratio increased to 1.08 (52/48%). The changes appear subtle, but they can be meaningful. For example, a ratio of 1.30 (58/42%) to 1.08 (52/48%) is just a 6 points shift, but that represents a 10% reduction in contracts and simultaneously a 14% increase in actives (24 points buyer-favored swing).


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 11:17:58 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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