October Highlights:

• PRICES CONTINUE TYPICAL SEASONAL DOWNTREND
  
  
• Northern Virginia Prices DOWN 2.2%
  Northern Virginia prices fell in October (contracts written in September). The Sep-Oct price move was somewhat divergent from the last 6 years averaging UP 0.3%. The YTD average price in Northern Virginia is UP 8.3% compared to the same period last year. During the seasonal decline in up markets, the market typically gives back 40 to 75% of the price gains experienced in the Jan through May/Jun peak. As shown in the graph below, the market has given back 59% of the 2024 gains.
  
  
• Buyer Showings Spike after Labor Day
  Buyer showings (demand) spiked 30% off the August lows reclaiming the July showing highs. The September spike is normal after Labor Day renewing sales activity in September and October just before the November and December holiday decline. Overall, buyer showings in 2024 have tracked about 15 to 20% less than 2023. There has been a single-digit uptick in buyer showings since the Fed reduced rates on September 18.
  
  
• Listings DOWN 11% from September to October
  This is on pace with the typical average DOWN 14% during the last 6 years.
  
  
• October Listings DOWN 32% vs. 5-year Average
  Seller listings have stabilized in 2024 and resisted the continued downtrend experienced in recent years. However, listings remain down significantly compared to long-term averages (-32%). Northern Virginia homes sold from Jan-Oct 2024 (24,067) is outpacing last year by 1.7% (23,659).
  
  
• Rate Locked "Discretionary Sellers" STILL Staying in Place
  These sellers largely "stayed in place" in 2023 and are doing the same in 2024, despite forecasts by economists. In late 2023, economists projected inventory would loosen up in 2024 rising 15% over 2023. That has not happened with just 25,152 New Listings in Jan-Oct 2024 compared to 25,138 last year. Instead of Listings (inventory) increasing 15% as forecast, they are unchanged YTD.
  
  
• Contract Ratio STEADY at 0.78 (shift toward buyers)
  Listings Under Contract represent 44% of the total October listings compared to those available and Active for sale at 56%. Contract ratios are at annual lows signaling a buyer-advantaged time of year.
  

• Persistent Low Inventory RISES to 1.41 months
  Inventory level up from 1.26 mos in September but equals the level this time last year (1.41 mos in Oct 2023).
  
  
• Buyers Continue Purchasing Strength in Fall
  Buyer contract prices averaged 99.6% of Seller Asking in October with buyer contingencies back in play as evidenced by contract cancellation rates being more than double where they were in the spring (now 16%). Notably for buyers, October offers the HIGHEST NUMBER of ACTIVE LISTINGS compared to any other month.
  
  
• Speed to Contract Slows in Fall
  Similar to last year, 63% of homes have sold in the fastest range YTD (0 to 10 days). However, speed to contract has slowed from the 70% range experienced in the faster months as days on market typically grow in summer and fall months. For example, just 53% of the 2,387 homes sold in October transacted in the fastest range with 23% of sales exceeding 30+ days on market. Cash transactions represent 18% of the purchases, up 1 point from last year. 

• Fed Nov Meeting: RATE CUT 0.25 to 4.50%
  The Fed cut the fed funds rate 0.25 point as widely expected during the November 7 meeting. The Fed has now lowered the fed funds rate by 0.75% since September. However, mortgage rates have increased 1 full point at the same time. This can be confusing to consumers. We should remember the fed funds rate is an ultra short-term rate that controls the overnight borrowing rate between banks. Mortgage rates span a much longer 30-year duration. More importantly, these long-term rates are determined by the bond market which considers many other factors like inflation and the strength of the economy. While the fed funds rate can "influence" the bond market, it does not "control" the bond market. The fed funds rate and mortgage rates are loosely connected as easily seen the last few months.
  
  
• Headline Inflation RISES to 2.6%, STEADY 0.2% Sep to Oct
  As reported last week, inflation increased from September 2.4% to October 2.6% year-to-year. This is the fourth consecutive month in the 2's after being firmly stuck in the 3-range for 13 consecutive months. However, it's the first time in 7 months that inflation has increased from the previous month. "Core Inflation" remains in the 3's which includes more volatile energy and food prices.
  
  
• Conventional Mortgage Rate RISES to Low/Mid 6's
  Mortgage rates reached a relative low in mid-September trading in the 5's which had not been seen since January 2023. Since September, rates increased 1% on economic news, despite a falling fed funds rate. Rates have been and will continue to be volatile with very high difficulty trying to time the market. Conforming and VA/FHA rates are running in the 6 to 6.5% range with jumbo loans about 7% (jumbo loan is > $1,149,825).