In this month’s market update, we’ll focus specifically on the Springfield zip code 22153, which includes the West Springfield area bordering Burke and Fairfax. While the overall Northern Virginia area is struggling with inadequate supply of homes to meet the demand, each community is unique and faces unique circumstances. So let’s take a look at some of the specific data for the 22153 zip code.
General Market Conditions
What is interesting about this speedometer visual is that you can easily see at a glance the key market drivers. For instance, at the end of January there were only 40 active listings, yet there were 21 closed sales and 17 new pendings. Put another way, there were almost as many homes sold in the month of January as there were homes on the market. This puts in perspective the fact that there is only 1 month of supply of available homes in the market.
Active Listings and Closed Sales are both ahead of the five-year-average, which is indicative of the underlying strength in the market. We can likely expect a strong spring season, as long as mortgage interest rates remain low. The market will continue to favor sellers, with increasing prices, if the lack of supply continues.
Let’s take a look at a few individual charts.
Looking at the most recent Market Activity chart, you can see how Closed Sales and All Pendings have tracked closely with the decline in the number of listings available on the market. It’s very difficult to maintain healthy market activity when there isn’t enough supply to meet demand. Note however the strong up-tick from December to January in New Listings and Active Listings. This isn’t a trend reversal yet. We need a couple more months of data to validate a trend reversal. Some of the increased activity can be explained by people who were holding off on listing their homes until after the holidays. But as we move into the active spring season, we should see continued increased activity.
As with other areas of Springfield, Median List Prices and Median Sale Prices are tracking closely in the 22153 zip code, as are Average Sale and Average List. The means that homes are selling at or near their list prices…and in some cases, above list price. With all the competition in the market, due to lack of inventory to meet demand, serious buyers must come in with their best offers for in-demand properties, in order to win against other competitive offers.
After a brief decline in prices from mid-summer to October 2016, prices have steadily increased ever since. We can anticipate this trend to continue until either more sellers come into the market to stabilize prices, or until demand weakens. The latter circumstance is unlikely, at least in the near term.
This chart more clearly shows the steep decline in prices followed by the modest recovery in the last four months. As long as the interest rate outlook remains stable through summer, we should see prices continue to increase. If the Federal Reserve should take more aggressive action on interest rates than expected or if they accelerate the expected hikes in 2017, then some buyers may find themselves back on the sidelines, resulting in weaker prices. However, right now sellers are definitely benefiting from the current conditions.
Click here for a one-page summary of key statistics in the Springfield (22153) market.
We are always here to help! If you want to know how current trends may impact your specific home, 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.