January Highlights:

• 2024 KICKS OFF WITH HIGHER HOME PRICES
  
  
• Northern Virginia Home Prices UP 7%
  In January, the average home price in Northern Virginia was $713,100 (up 7% from $665,600 in January 2023).
  
  
• Buyer Showings Surge
  Buyer Showings (demand) have surged in recent months with the fall in interest rates. During a time of relatively low winter inventory, this has made for frequent difficulty buyers accessing the homes they want to see. Advantage sellers.
  
  
• Listings UP 70% from December to January
  This compares to UP 62% last January and is consistent with levels seen in the last 5 years.
  
  
• January Listings DOWN 26% vs. 5-year Average
  Number of homes sold in January UP 1% from last January.
  
  
• Rate Locked "Discretionary Sellers" Staying in Place
  These sellers largely "stayed in place" in 2023. However, analysts are expecting sellers to begin loosening up in 2024 bringing more inventory to market.
  
  
• Contract Ratio STEADY at near 1.00 (seller-advantaged)
  
  
• Persistent Low Inventory at 1.29 months
  Inventory remains below last year's level (1.55 mos in January 2023).
  
  
• Buyer Surge Produces More Offers & Escalation
  Average Sold Price-to-List Price was up nearly two full points to 99% compared to 97% last January. Likewise, sellers have experienced a higher instance of multiple offers as well as waived contingencies like home inspections, financing, and appraisals.
  
  
• Faster to Contracts & More Cash Offers
  Last January, 29% of homes sold in the fastest range (0 to 10 days). This January, 42% of the homes sold in this range. There was also a notable increase in cash offers with 20% this January compared to 15% last January.
  
  
• Buyers Confronted More Competition
  Buyers are confronting more competition on nearly all fronts. From showings to multiple offers, to escalating prices and waived contingencies, to fewer days on market.
  
  
• Fed January Meeting: RATES HELD at 5.25%
  The Fed held rates unchanged at the January 31 meeting. The futures market is pricing an 85% chance the Fed will hold rates unchanged at the March meeting with a 50/50 chance of a 0.25% rate reduction in May. This would be a relatively serious departure from the Fed's firm stance the last two years that they will not reduce rates until the 2% target inflation rate is reached for a sustained number of months.
  
  
• Headline Inflation FALLS to 3.1%, UP 0.3% Dec to Jan
  As reported today, even though inflation fell from last month's 3.4%, prices were higher than expected at 3.1% year-over-year. Month-to-month was up 0.3%. Inflation remains above the Fed's 2% target they want to see sustained for several months before reducing the Fed Funds rate.
  
  
• Mortgage Rate RISES to Near 7%
  After a few months of rates falling to the mid 6's, they bounced back to near 7% due to a persistently strong labor market. The January job reports came in higher than expected. This suggests the market is not cooling as desired by the Fed which caused the bond market to react by bidding up rates. The bond market (which dictates rates) will need to see the same things it has been wanting to see: sustained lower inflation, softer economic data, and for the Fed to be seeing the same thing.