Median home sale prices continued to trend upward throughout the Northern Virginia region in August, according to the Long & Foster Real Estate Market Minute Report. Arlington County showcased the highest increase with an 11% rise, followed by Alexandria City with a 9% rise.
The number of units sold decreased throughout most of the region, though Loudoun County had a 1% increase and Prince William County exhibited no year-over-year change. Inventory continued to tighten dramatically, with declines ranging from 23% to 53%.
“The market is not surprising, as it’s more of the same in relation to the numbers,” said Larry “Boomer” Foster, president of Long & Foster Real Estate. “Inventory continues to contract throughout the region, and the Amazon effect remains in both Arlington County and Alexandria City.”
Foster believes that Amazon’s HQ2 announcement sparked a huge rush to buy homes in the area and now people are holding onto their homes in the hopes they’ll make more money once Amazon employees move in. This is starting to affect the number of homes that are being sold, but there are still decent price appreciations throughout the region.
Referring to the Federal Reserve’s potential lowering of the federal funds rate, Foster spoke on what effect that could have on the market. While the federal funds rate can affect 30-year fixed rates, the two are not directly tied together. Foster said they’re “directionally correct, meaning they typically go down together, but not always.” The 30-year fixed rate associates more closely to Treasury bonds and since the yield on Treasury bonds are so low, that is pushing the 30-year fixed rate down.
Looking ahead, Foster anticipates a relatively strong market between now and Thanksgiving. He expects similar conditions as in 2018, where we saw median home prices appreciate at low-to-mid levels. This year, Foster predicts better interest rates and significant demand. While the spring market peaked later than usual this year, staying strong beyond mid-May, Foster does not expect the same type of lag this fall. Typically, the market will start to slow down after Thanksgiving, as many people take their homes off the market to accommodate holiday plans and festivities.