December Highlights:

• PRICES CLOSE STRONG IN 2024 - UP 8.1%
  
  
• Northern Virginia Prices UP 44% Since 2019
  Northern Virginia prices experienced a strong year in 2024 with the average price increasing from $733,570 to 793,000 (up 8.1%). This is an acceleration from the 3.8% experienced in 2023. All eleven (11) sub-markets in Northern Virginia increased in value. The average price of a detached home closed at $1,124,200 with the average price of a townhouse at $710,500 and condo at $459,400. To put things into perspective, Fairfax County has averaged a 5.1% annual increase in home prices since 1975. The 44% increase in the last 5 years moderately outpaced the 28% average. More to the point, those worried about a market collapse, the 44% substantially lags the 5 years leading up to the 2006 market top when 2001-06 prices increased 95%.
  
  
• Buyer Showings DOWN 7% in 2024
  Overall, Buyer showings (demand) were down 7% compared to 2023. Showings lagged by 15% for much of the year, but spiked over 2023 levels to close the year from September to December as the Federal Reserve began reducing the fed funds rate.
  
  
• Listings DOWN 31% from November to December
  This equaled the typical average DOWN 31% during the last 6 years.
  
  
• December Listings DOWN 35% vs. 5-year Average
  Seller listings stabilized in 2024 resisting the continued downtrend experienced in recent years. However, listings remain down significantly compared to long-term averages (-35%). Northern Virginia homes sold in 2024 (28,296) outpaced last year by 3.8% (27,271).
  
  
• Rate Locked "Discretionary Sellers" STILL Staying in Place
  These sellers largely "stayed in place" in 2023 and repeated the same in 2024, despite forecasts by economists that inventory would loosen up in 2024 rising 15% over 2023. That didn't happen with just 27,623 New Listings in 2024 compared to 27,674 in 2023. However, what many people don't realize is more and more transactions are occurring against relatively higher interest rates. This is decreasing the number of low-interest-rate mortgages held by owners. For example, in Q1 2022 over 85% of the outstanding mortgages were under 4.5%. As of Q3 2024, this has fallen to 73% and continues to decline. The typical home seller is now 63 years old, a record high. This compares to age 54 in 2014 and age 45 in 2007.
  
  
• Contract Ratio STEADY at 0.78 (shift toward buyers)
  Listings Under Contract represent 44% of the total December listings compared to those available and Active for sale at 56%. Contract ratios are at annual lows signaling a buyer-advantaged time of year but this will begin to change to seller-advantaged as we head into early 2025. 
  

• Persistent Low Inventory STEADY at 1.08 months
  Inventory held relatively steady from 1.01 mos in November and is tracking similar to this time last year (1 mo in Dec 2023).
  
  
• Buyers Continue Purchasing Strength in Late 2024
  Buyer contract prices averaged 99.0% of Seller Asking in December with buyer contingencies back in play as evidenced by contract cancellation rates being more than double where they were in the spring (now 15%).
  
  
• Speed to Contract Slows into Year-End
  Similar to last year, 62% of homes YTD have sold in the fastest range (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 from summer to end of year. For example, just 44% of the 2,073 homes sold in December transacted in the fastest range with 31% of sales exceeding 30+ days on market. Cash transactions represent 18% of the purchases, up 1 point from last year. 

• Fed Dec Meeting: RATE CUT 0.25 to 4.25%
  The Fed cut the fed funds rate 0.25 point as widely expected during the December 18 meeting. The Fed has now lowered the fed funds rate by 1 full point since September. The futures market is presently showing a 97% chance of no additional rate cut at the next meeting scheduled on January 29. The Fed lowering rates has done nothing to influence mortgage rates which have increased 1 point since September.
  
  
• Headline Inflation RISES to 2.9%, RISES 0.4% Nov to Dec
  As reported this morning and in-line with expectations, inflation increased from November 2.7% to December 2.9% year-to-year. This is the sixth consecutive month in the 2's after being firmly stuck in the 3-range for 13 consecutive months.  Inflation month-to-month also increased from 0.3 to 0.4%, a level not seen since April 2024. "Core Inflation" remains in the 3's which includes more volatile energy and food prices.
  
  
• Conventional Mortgage Rate RISES to 7%
  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 point to a relatively high level on economic news, despite 1 point of cuts by the Fed. 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 6.375 to 6.75% range with jumbo loans in the low 7% range (jumbo loan is > $1,209,750).