The question is always “How is the Arlington market?”
Well, then how is it?
1. The inventory is rising.
The actual number of homes for sale is lower than last year (422 vs. 426), but they are not being absorbed as fast (248 vs. 371 new pendings). Here are some charts for “months of inventory” – this is how we measure supply and demand for real estate. (if no new listings come on the market it would take this money months to sell the current inventory). At 2.5 months of inventory the pricing in Arlington is flat.
This is a chart for single family homes for the last 5 years – the craziest part of real estate market in Arlington, VA for the last few years. You can see we had around 1 month of inventory since the pandemic began, then it dropped below 1 month last fall and in June it increased again to 1.5 months. This is still indicating seller’s market, but I expect to see the trend to continue due to the increasing interest rates.
Condo inventory increased a lot after the pandemic began, but the inventory has leveled off and is under 2 months – which means a seller’s market as well. The condo market was hit super hard during the pandemic, because there was a large shortage of renters, but that has changed and the rent prices have increased. So sellers, especially the ones who rent their condos – don’t really have to sell. And that decreases the inventory.
2. Fewer homes have sold.
Sold dollar volume in June 2022 was 22% lower vs. June 2021 (234 mil vs. 300 mil) and sold units were 22% lower as well (286 vs. 369), but that reflects normal pre-pandemic sales volumes. Here is a “Closed Sales” chart for the last 6 years and the last 2 are very robust!
3. Days on the market (20 vs. 20), average sales price (834k vs. 820k) have not seen a large change since last year.
4. Interest rates increased a lot!
Interest rates in June 2021 were 3% and June 2022 they were 5.9%. With every 1% increase buyers’ purchasing power decreases 10%. The interest rate is almost 2% higher than last year – of course that’s going to affect the market. The interest rates will continue to go up due to the raging inflation.
So how is the market? The market is good. It’s good for buying, it’s good for selling. It really depends on your situation and your long term plans. I do expect the interest rates to keep going up – so if you are thinking of selling – now is better than later, but that too shall pass. Eventually. If you’d like to discuss your situation – give me a call at 703-217-2077 or email me and we can talk!