Arlington, VA real estate is going crazy. What do you hear if you are currently buying or selling: 6 offers, 11 offers, 5 offers, etc. What is happening?
Well, we have EXTREMELY LOW inventory, we have very few homes for sales in comparison to the demand.
Why are we in this situation? In my opinion there are a few reasons: Amazon effect has a lot of sellers holding on to their homes and many buyers wanting to get into the market before the prices get out of control. Interest rates are very low. Healthy job market. The trend is “walkable city living
and many people prefer to move into smaller spaces closer-in that move to the suburbs.
Here are the statistics:
In the last 5 years the average number of actively available listings in Arlington in June was 542. We had 245 in June, 2019!!!
Real estate market follows a simple rule of supply and demand. What we measure is “Months of supply” – which means – if there are no new listings on the market – it would take so much time to sell currently available homes. Overall in the US the experts consider 6 months of inventory to be a “balanced market”. I don’t think I’ve ever seen 6 months of inventory in Arlington in my 16+ years career, but I have noticed when we have 2.5 months of inventory – the market is not going up or down. Well, in the last 5 years the average was 2.45 months of inventory in June, we had 1.1 months of inventory in June 2019!!! That is VERY VERY low. So that is pushing prices up.
And finally here’s the comparison of the average sales price in the last 5 years vs. this year. We had 7.82% increase.
What does the future hold? I think we can expect the prices to keep rising. Please keep in mind that real estate market has many segments and these are just general trends. If interest rates start going up or there’s a recession – the market would be affected and the trends would change. And one day the market will stabilize, but I don’t thing we are near the top yet.