Now deep into Fall, the seasonal slow-down is evident. Fall is a great time to buy a home, as increased supply sometimes translates into a small downtick in prices. If you want to be in a new home by the holidays, now would be the time to start the process!
Let’s take a look at some of the statistics.
Active Listings show a slight uptick month-over-month from August to September. The number of Active Listings is impacted by the slight softening of Closed Sales and Pending Sales. At the same time that sales were decreasing, New Listings reversed the previous trend, with a slight increase in newly listed homes on the market. More listings and fewer sales reflect an increased supply. The decrease in Closed Sales and All Pending Sales is likely indicative of the Fall seasonal slow-down, but both are up slightly versus the same period a year ago.
In the chart above, which reflects the percentage of change month-to-month over the course of the previous year, you’ll see that the measures of Closed Sales, All Pending Sales, New Listings, and Active Listings have languished in negative territory throughout most of the summer and are off significantly from the highs of the busy Spring (March 2016). In September, you can see that two key measures broke through into positive territory, and both are good news for buyers. Active Listings and New Listings both reflect a small uptick, and an increase in supply, nearly always a positive impact for buyers. Increases in supply almost always are accompanied by a decrease in price.
There is another positive impact of increasing supply. When supplies are very tight, it can be difficult for families to find the right home that suits their needs. When they do find the right home, there are often multiple offers, which means someone walks away disappointed. Increasing supply helps make more homes available and more affordable.
While these figures are for Northern Virginia as a whole, the situation in individual communities vary widely. There are a number of reasons for this, including proximity to major employers in the area (and commute times), as well as affordability.
Keep in mind that the infographic above is comparing only the year-over-year changes from September 2015, and not the month-to-month changes in the previous graphs. However, you can see that prices are down across the board in all major communities, while the sales data is mixed.
The noticeable fall in median sale prices off the high from May/June is further evidence of good news for buyers. Increasing supply will continue to put pressure on prices through the Fall season. Prices are still slightly higher than a year ago, but are definitely in a strong downward trend over the last four months. There are many factors that impact price, and supply is only one of them. Softer demand may also play a role, as many buyers have been on the sidelines, possibly waiting for a more affordable price landscape; or perhaps waiting to see what the outcome of the presidential election may have on local jobs and government employers.
While the downtrend is clear when looking at the month-over-month data, when compared with last year, median sales prices remain strong, showing a 2% increase in prices from September/October 2015. From February to August, the percentage of price increase hovered right around 1% from previous year’s prices, so this sharp increase is notable. However, it will take several more months of data to determine if this a trend reversal or simply a seasonal blip.
Days on Market
The number of days a home spends on the market is one of the key indicators of the strength of the market. When homes take as significant amount of time to sell, it means that there is too much supply and not enough buyers. In Northern Virginia, the days on market have been on a steady upward trend since the low-point in April/May, but the median number of days it takes to sell a home is still less than 30 days. Compared with a year ago, the number of days on the market is still very strong, and motivated sellers are not disappointed.
Whether you are in the market to buy or sell, we are here to serve you. Our 4 ½% standard commission provides you with significant savings without sacrificing service. Contact us at SandersNoVA@gmail.com or 703-298-7037, to find out how we can help you sell your home or find your dream home in the Northern Virginia area.