February Highlights:

• PRICES RISE, DESPITE INVENTORY UP 12% vs FEB 2024
  
  
• Northern Virginia Prices UP 6.3% vs. Feb 2024
  The median price of a Northern Virginia home increased 6.3% in February 2025 compared to February 2024. It typically takes a full Q1 to get a sense of how prices will trend for the year. For example, the average price was up 11.6% January to January but has compressed this month to up 7.2% February to February.
  
  
• Buyer Showings DOWN 11% in 2025
  Overall, Buyer showings (demand) were down 7% in 2024 compared to 2023. This trend has continued into 2025. While current-year showings are at 2025 highs, they are down 11% compared to 2024.
  
  
• Listings UP 24% from January to February
  This is up sharply from the UP 14% in Feb 2024 but on pace with the typical average UP 23% during the last 6 years.
  
  
• February Listings DOWN 19% 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 (-19%). Notably, with the 5-year average now excluding 2019 from the calculation, the negative number has improved about 15 points from last year's minus mid 30's. Northern Virginia homes sold in Jan-Feb (3,038) are DOWN 2.5% compared to last year (3,117).
  
  
• Rate Locked "Discretionary Sellers" STILL Staying in Place
  In the wake of rising interest rates beginning in 2022, sellers largely "stayed in place" in 2023 and repeated the same in 2024, despite forecasts by economists that inventory would loosen up 15% in 2024. That didn't happen with just 27,623 New Listings in 2024 compared to 27,674 in 2023. New Listings in Jan-Feb (3,835) were DOWN 2% compared to Jan-Feb 2024 (3,912). 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 0.75 (shift toward buyers)
  Listings Under Contract represent 43% of the total February listings compared to those available and Active for sale at 57% - the same ratio as January. Contract ratios are at annual lows signaling a buyer-advantaged time of year but this will likely begin to change to seller-advantaged as we head into spring 2025. 
  

• Is Inventory Finally Moving Higher? RISES to 1.79 mos
  Inventory rose sharply month-to-month from 1.02 mos in January to 1.79 mos in February. This is 12% higher than February 2024 inventory of 1.46 mos. Separate, but associated, is a concerning trend in Weekly Active Listings for the entire Washington DC metro area. In the past 5 years, the current year Weekly Active Listings have been lower than the previous year underscoring persistent low inventory. However, in March 2024 this trend changed with spreads 20 to 30% more Weekly Active Listings in 2024 compared to 2023. Currently, Weekly Active Listings in the entire Washington DC metro area are 33% higher than last year. While some of this is attributed to Northern Virginia, most of these excess listings are located in DC, Prince George's and Montgomery counties. 
  
  
• Buyers Continue Purchasing Strength in Feb 2025
  Buyer contract prices averaged 99.7% of Seller Asking in February just like Feb 2024. The Sold-to-List Price ratio is trending up as typically seen in the approaching spring market. Likewise, buyer contingencies begin to trend away from contracts as evidenced by contract cancellation rates falling. The current cancellation rate is 10% and will likely range between a seller-advantaged 6 to 12% in the coming months.
  
  
• Speed to Contract Spikes as Spring Nears
  Speed to contract spiked 17 points from last month's 43% to 60% in February. Of the 1,570 homes sold in February, 60% transacted in the fastest range (0 to 10 days) with 24% exceeding 30+ days on market (down from 37% last month). Cash transactions represented 19% of the purchases in February. 

• Fed Jan Meeting: RATE STEADY at 4.25%
  The Fed met on January 29 with no rate cut. The next meeting is scheduled tomorrow, March 19. The futures market is presently pricing a 99% chance of no rate cut at tomorrow's meeting.
  
  
• Headline Inflation FALLS to 2.8%, RISES 0.2% Jan to Feb
  As reported last Wednesday, inflation dropped from January 3.0% to February 2.8% year-to-year. Inflation month-to-month also dropped from 0.5 to 0.2%. "Core Inflation" dropped to 3.1%, its lowest level since April 2021. Core inflation includes more volatile energy and food prices.
  
  
• Conventional Mortgage Rate FALLS into Mid 6's
  Mortgage rates have further relaxed into the mid 6's. The further near 0.5 point decline in the last month is mainly attributed to a falling stock market and inflation continuing to cool. Rates have been and will continue to be volatile with very high difficulty trying to time the market. VA/FHA and Conforming rates are running in the 6.13 to 6.38% range with jumbo loans in the 6.5% range (jumbo loan is > $1,209,750).