May Highlights:

• MULTIPLE SUB-MARKETS HIT NEW ALL-TIME PRICE HIGHS
  
  
• Fairfax & Prince William Counties UP 2.5%+
  Northern Virginia prices were flat in May, but major sub-markets including Fairfax and Prince William counties follow-through April highs and hit new all-time median price highs. Prices continue to benefit from low inventory (1 month) just like last year.
  
  
• Buyer Showings Peak; Seasonal Decline Begins
  Buyer Showings (demand) remain strong tracking 2023 numbers. However, the market has begun its seasonal decline in showings following the typical April/May peak. While still a seller-advantaged market, Memorial Day weekend ushered in the usual drop in showings (-20%) as summer begins in real estate. Showings will decline even further after the July 4 holiday (-15 to 20%). 
  
  
• Listings UP 1% from April to May
  This is consistent with the average UP 1% during the last 6 years.
  
  
• May Listings DOWN 25% vs. 5-year Average
  Seller listings have stabilized and resisted the continued downtrend experienced in recent years. However, listings remain down significantly compared to long-term averages (-25%). The number of homes sold Jan-May (11,038) is nearly the same as last year (10,999).
  
  
• Rate Locked "Discretionary Sellers" STILL Staying in Place
  These sellers largely "stayed in place" in 2023 and appear to be doing the same in 2024, despite forecasts by economists. In late 2023, economists projected inventory would loosen up in 2024 rising 15% over 2023. So far, that has not happened with just 12,701 New Listings in Jan-May 2024 compared to 12,709 last year. Instead of Listings (inventory) increasing 15% as forecast, they are unchanged YTD.
  
  
• Contract Ratio FALLS from 1.21 to 1.01 (shift toward buyers)
  
  
• Persistent Low Inventory STEADY at 1.10 month
  Inventory is just about equal to last year's level (1.01 mos in May 2023).
  
  
• Buyer Showings Produce More Offers & Escalation
  Average Sold Price-to-List Price was up one point at 101% compared to 100% last May. Likewise, sellers have experienced a higher instance of multiple offers as well as waived contingencies like home inspection, financing, and appraisal. Waived contingencies mean fewer buyer contract cancellations. Last month's 9.4% cancellation rate remained unchanged this week, but up from this year's low of 6.5% indicating the buyer-favored pivot and contingencies are re-entering the market. The cancellation rate will grow from here with seasonal ranges from 12 to 18% in the upcoming summer to fall months. 
  
  
• Faster to Contracts & More Cash Offers
  Last May, 62% of homes sold in the fastest range (0 to 10 days). This May, 68% of the homes sold in this range. There continues to be a notable increase in cash transactions with nearly 20% this year compared to 16% last year.
  
  
• Buyers Will Begin to Confront LESS Competition
  Buyers have been confronting more competition on nearly all fronts. Buyers: Don't Despair. The market is beginning to adjust after the usual Memorial Day pivot that occurs each year when buyers begin to navigate the market with some leverage. Summer and fall months typically are the best time for buyers as pricing relaxes and contingencies re-enter the market.
  
  
• Fed June Meeting: RATES HELD at 5.25%
  The Fed held rates unchanged at last week's June 12 meeting, while downgrading its forecast. In March, the Fed projected 3 rate cuts in 2024. Last week it revised this downward to just one possible cut. Remember, it was just in January when so-called experts were even more bullish projecting 6 rate cuts this year!
  
  
• Headline Inflation FALLS to 3.3%, STEADY at 0.0% Apr to May
  As reported last week, inflation was in-line with expectations falling slightly in May from April's 3.4% year-to-year, and registered a promising no increase month-to-month. However, inflation remains stubbornly stuck in the 3% range for now 12 consecutive months. This is above the Fed's 2% target they said they wanted to see sustained for several months before reducing the Fed Funds rate.
  
  
• Conventional Mortgage Rate STEADY at 7%
  The national mortgage rate for a jumbo loan has relaxed from the late April high of 7.5% and May high of 7.25%. VA/FHA programs and Conforming rates are running about 0.50 to 0.75% lower. The Conventional Mortgage Rate has spent over 70% of the time during 2024 at 7% or higher.