Homes sales decreased throughout most of the Northern Virginia region in February, according to the Long & Foster Real Estate Market Minute report. The exceptions were Alexandria City, which showed an increase of 4 percent, and Fairfax County, which saw no change. This is likely due to inventory declines across the Northern Virginia region. Alexandria City exhibited the biggest fall with a 51 percent drop, followed by Arlington County with a 39 percent decline. Median sale prices rose in most of the region.
“February’s numbers are not surprising,” said Larry “Boomer” Foster, president of Long & Foster Real Estate. “The Amazon effect is still happening in Arlington County and Alexandria City, where we’re seeing monstrous contractions in inventory.”
The decrease in units sold is in response to a lack of supply of good saleable inventory at a price point where there is demand, Foster said. This illustrates how hyperlocal the market is, as the inventory challenges have caught up and magnified how low the numbers are.
Foster addressed concerns that the market is moving toward a housing bubble, pointing out that the situation in 2005 was drastically different from the market currently. “Home affordability is around 150 on the index, meaning that the median household income has 50 percent more money than is needed to afford the median home price,” he said.
“When you look at the things that had happened back in 2005 to create the housing bubble, there were a couple of factors,” Foster said. “One was the regulatory environment around mortgages, the others were double-digit appreciation with no way to keep up with it and the home affordability index.” In today’s market those factors are more stable, which leads Foster to believe we are not in a housing bubble.
In terms of getting a home, Foster claims many homebuyers are not always aware of the plethora of options available. He says that the “biggest deterrent is most people don’t think they have enough money to put down, believing they need to put 20 percent down on the price of a home.” However, there are many financing options that don’t necessarily conform to that standard principle.
Foster says you can get homes that are in need of updates for a steal at the moment since “the vast majority of buyers want move-in ready.” He advises for consumers to come in with a competitive offer backed by a strong reputable lender.