Home Prices Trend Down in August
August Prices Fell 3.9% from July: The median home price in Northern Virginia softened by another 4% in August after hitting a new high of $660,000 in May. All major sub-markets in Northern Virginia declined in price between 2 to 4%, except Arlington which declined 13%. It should be noted Arlington can experience unusual price volatility given the instance of tear-downs and new construction. New construction can skew numbers at times.

Even with the recent softening in prices in June (-3%), July (-3.3%), and August (-3.9%), it's important to remark prices are still holding up as the market rebalances. Surprisingly to many, the median price in all major sub-markets is higher in August than in January when interest rates began the dramatic climb. For example, in Fairfax County, the median home price is up 10% from January to August, while the average price is up 2%. 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 relatively firm prices due to the persistent low inventory.

Homes Taking Longer to Sell? Not Exactly...
The Answer May Surprise You: Overall, homes across Northern Virginia are taking exactly the same 14 days on average to sell this year just like last year as shown in the table below. Even more surprising, the second chart below compares Days on Market (DOM) by time period (e.g. 1-10, 11-20, 21-30 days, etc.). For the months of January through August 2022, each period is exactly the same as 2021. The same 67% of homes are selling in the 1-10 days time frame in 2022 as 2021.

Then Why Have Inventory Increased & Prices Softened?
Because the Velocity has Slowed Inside the Bands: Homes are still selling relatively fast, but slower inside the fast ranges. Instead of 10+ offers received and homes going under contract in 1 to 3 days like 2020-21, it now may take 3 to 5 days to receive one offer or possibly a few, but homes are still selling within the fastest 1-10 days range. Most notably, the "buying dynamics" have dramatically changed in the 1-10 days range. Sellers are receiving fewer showings, more in line with 2019, resulting in fewer offers. Fewer offers produce less seller opportunity for price escalation and more buyer opportunity to purchase homes at full ask, or possibly even below ask. Buyer contingencies like home inspections and appraisals are much more common in 2022 than in 2020-21. Buyers can navigate the market with less pressure. They are finding better-conditioned, more turnkey homes compared to last year. Sellers listing homes with deferred maintenance and lack of updates seriously risk accumulating days on market and price reductions in today's market.