In this month’s market update, we’ll focus specifically on Fairfax county as a whole. Fairfax County is experiencing some incredible growth, and the Spring market is primed for an explosion of demand, with continued inadequate supply. This is the same story as much of Northern Virginia, and is nothing new to homeowners who have been eyeing the markets. Something will eventually have to give. The big question on everyone’s mind is “when”?
So, let’s take a look at some of the specific data for Fairfax County.
General Market Conditions
As you can see from the visual above, Closed Sales and New Pending continue to be incredibly high, outpacing the five year average in both instances. The good news is, Active Listings are picking up a little, showing some life and rising slightly above year average. Not enough, though. Months of Supply is still really low. In a healthy marketing, there should be 3-6 months of supply, and Fairfax County is hovering around 1.7 months.
The market is still favoring sellers, as buyer demand continues to drive up prices. In our own office we are seeing multiple offers on properties and offers coming in above asking price in desirable areas. As we go deeper into the active spring market, we can only expect home values to continue to rise.
It’s possible that we could see a continued rise in new listings as the weather gets warmer and homeowners shake off the winter reticence. It’s also possible that potential sellers were waiting on the sidelines through the initial weeks of the new Trump administration, to see what impacts, if any, his new policies might have on the markets. Expected interest rate hikes throughout 2017 could get more homeowners into the market this spring to lock in increased equity on their current home and to take advantage of lower rates before they rise.
Let’s take a look at a few individual charts.
Notice the sharp upturn since December 2016 in new listings compared to overall listings, which only showed a modest increase. This could be the signal we are looking for that sellers are ready to enter the market. It will take time to determine if this is merely a season uptick after the holidays, or if this the beginning of a reversal in the trend that will bring needed to relief in the supply of homes on the market.
As can be expected when demand exceeds supply, ratio of Average List to Average Closing prices are very close. While there are individual instances of competition driving closing prices above listing prices, it’s not the norm. However, sellers are the winners in this market, very often entertaining offers at or above list price.
Prices softened ever so slightly from a peak in December, with a slight slide in January and February. While demand continues to outpace supply, the holidays, unpredictable weather, and uncertainty over the changing presidential administration may have kept some buyers on the sidelines. March through June/July of 2016 saw a peak in prices, and as long as the economy and interest rates remain favorable, we could see another peak in the coming months.
There is never a better time than the present to move forward with any plans you may have to buy or sell a home in 2017. Waiting to try to time the market usually does not result in any added benefit. We are always here to help! If you are unsure of your home’s value or if you are thinking about buying or selling, contact Jason at 703-298-7037 or SandersNoVA@gmail.com.