Dear friend,
You might be wondering how was real estate market in Arlington, VA last year. I wanted to share some information that will show you some important trends.
A lot fewer homes sold in Arlington last year – 20% fewer than 2022 (2,242 vs. 2823). The last time we had this few homes sold was in 1997 when we had 2,234 solds. That’s 26 years ago! (My data source started keeping track of these statistics in 1997 – so I can’t talk for the years prior) So yes – the market felt slow, but 2,242 families sold and 2,242 families bought – so the market was certainly not dead!
Here is a chart to show you the total sales in quarters for the last 10 years:
Whey did the market in Arlington, VA slow down? The biggest reason in my opinion were high mortgage interest rates. The year started at 6.5% for a 20 year fixed rate and in October we had 7.75% average. What does that mean? Let’s assume you are purchasing a 1 million dollar home with 20% down. If you were buying it before 2022 and your interest rate was 2.5% – your principal and interest payment was $3,161. If you were trying to buy the same house in October, 2023, your principal and interest payment was $5,731 – that’s $2,573 more. Would you be interested in moving if you had 2.5% interest on your loan? Not, unless you really really had to and if you didn’t have to take a loan.
Did the prices come down? Hell, no! The demand was lower, but because we had so little inventory – the prices were steady or went up in some cases. Average price in Arlington went up by almost 6% in 2023 from $800,000 to $850,000. And if you are thinking about a single family home the average price went from $1,311,000 to $1,371,000.
Here is a charge for Average home price in Arlington, VA:
How many days on average did it take to sell a home in Arlington, VA? 26 – that’s a pretty speedy number. Most of the homes were flying off the shelves in one weekend.
The inventory continues to be low – which means the prices aren’t going to come down and it’s a seller’s market. All of last year we had less than 2 months of inventory (this means if no new homes came on the market it would take x amount of time to sell the existing inventory). In order to see any price drops you need over 2 months of inventory and I just don’t see it happening in the near future.
Here is a chart for the inventory for the last 10 years:
So what are the predictions? The interest rates are coming down and this probably means more sellers will sell and more buyers will flood the market. I think we will see higher number of homes on the market, but more buyers will be looking and gobbling them up. And the prices will keep rising. Yay for the sellers, boo for the buyers. There is no good or bad time to sell – it really comes down to your life situation, your dreams, wants and needs. It’s certainly cheaper to rent, but if you’d like to plant a root and own – you should buy and soon. I’m here to help you navigate this emotional journey of home ownership – would love to discuss your situation and see if I can help. Contact me!