The entire Fredericksburg region saw an increase in median sale prices in August, according to the latest Long & Foster Real Estate Market Minute Report. Fredericksburg City showcased the largest rise with a 21% jump, followed by Spotsylvania County with 9% growth.
Most of the region exhibited a decline in number of homes sold, though Culpeper County had a 1% increase and Caroline County had no year-over-year change. Inventory also fell throughout most of the region aside from Fredericksburg City, which had a 3% increase.
Evaluating the past month’s performance, Larry “Boomer” Foster, president of Long & Foster Real Estate, said, “the story remains the same in Fredericksburg—inventory continues to contract, though there are decent sale price increases.”
In anticipation of the upcoming fall market, Foster mentioned it’ll be “interesting to see if there’s going to be a lagging effect from the late spring market.” Normally, the market will pick up between now and Thanksgiving before slowing down during the holidays. Typically, home sellers will take their homes off the market during the holidays, as family comes into town and they don’t want their homes open for showings around then. For those looking to buy during that time, there is still substantial credit available, making it easier to purchase a home.
Foster also spoke about the Federal Reserve’s potential lowering of the federal funds rate and 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. With the current economic climate, many investors are parking their money in Treasuries, which is pushing the yield on bonds down.