This page will update monthly with stats on the current Northern VA market.
This will also be quarterly updated with analysis from one of our local Northern VA real estate experts.
2023 Northern VA Real Estate Market
This analysis was updated in January 2023. Stats are updated monthly from our data provider.
From mid 2020 to mid 2022, real estate in Northern Virginia has benefitted from the hottest market in nearly 2 decades. This follows a national trend in housing during that time.
In 2023, the market is shifting. As you can see below, supply and days on market are increasing. Usually, this will be followed by slower price growth or even declines in some towns.
So how did we get here?
There are a number of factors that went into the boom over the last 2 years. Even before the pandemic, the United States was (and still is) facing a shortage of housing to meet demand.
To put it simply, builders are not building enough new homes and sellers are not putting enough homes on the market for all the buyers that are interested.
Then, the pandemic created a huge boom of demand on an existing environment of low supply. This was fueled by low interest rates and a large interest in home shopping by buyers who were suddenly forced to spend a lot more time in their home.
This send prices much higher, in many areas there were double digit percentage increases PER YEAR in 2020 and 2021. It was a simple formula of short supply plus huge buyer demand.
So why a slowdown?
In 2023, interest rates started around 6.5%. In 2022, they started around 3.1%. 2021: they started around 2.5%. (Source: FreddieMac PMMS).
The increase in mortgage rates are correlated to the fed increasing the fed funds rate. The fed has been increasing rates in an attempt to bring down inflation. The fed has also specifically called out home prices as a sector of the economy they want to cool off in a 2022 meeting.
Real estate demand is very sensitive to increases in mortgage rates for an obvious reason: it increases monthly payments and thus the price buyers can afford to pay for a given property.
However, the inventory of homes for sale has not suddenly become plentiful. Less homes are selling because of rates, and inventory has increased…but it increasing from historically low levels.
So this year so far has seen a slow down in sales, but if or how much prices decreases is yet to be seen.
We will update this portion next quarter. If you want to know what this market means for you specifically, whether buying or selling reach out to us.
- The interest rates have increased heading into 2023.
- There are less sales closing than previous years.
- Homes are staying on the market longer.
- Price increases are likely to cool off. How much is to be determined.
- There will be less bidding wars, which is welcome for buyers.
- Rates are unlikely to come down significantly until the fed gets control of inflation.
- New home builders are likely to increase incentives to move inventory.
- Inventory has risen slightly, but still very low compared to older data.
Northern VA Market Stats
All stats are over the last 12 months, separated by month. Each data point will also show you the year over year change and exact number.
• New Listings & Active Listings
How many listings were for sale at the end of a given month, and how many new listings were listed that month.
Useful chart for seeing inventory on and entering the market.
• Closed Sales
The chart above shows how many homes sold (fully closed) by month.
Most homes close about 25-40 days after signing a contract and going under contract.
• Pending (“Under Contract”) Listings
The pending chart shows homes that have gone under contract for that month.
• Months of Supply & Absorption Rate
Months of Supply = how long it would take all homes for sale to sell for a given month. (homes for sale in an area) / (how many homes sell in that area on average per month).
Absorption rate = (number of homes pending over given period) / (number of homes still for sale).
This chart is another way to visualize the inventory. These charts are inversely correlated (faster absorption rate, lower months of supply…and slower absorption rate, higher months of supply).
• Median and Average Sales Price
Similar stats, the median price takes the middle of the sales data points, eliminating most influence from very expensive homes.
This will give you an overall look at pricing trends, but real estate is hyper local and not all home types/areas appreciate at the same rate.
Request a home value estimate for more accurate pricing of your home.
• Median and Average Days on Market
These stats shows you how long homes take to get a contract.
Median takes the middle of the data set.
Real Estate Market Signals
Here are some things to look for.
In a Seller’s Market
- Prices will be increasing faster than normal.
- Inventory is generally decreasing/low.
- Homes sell faster.
- Less contract contingencies, so higher contract to close rate.
- Bidding wars are common.
- Can be caused by local factors (such as job creation) or macro economic factors (such as low interest rates). Often, it is both.
In a Buyer’s Market
- Homes are on the market longer.
- Prices are stagnant or decreasing.
- Homes take longer to sell on average.
- Buyers are able to dictate contingencies and terms of contract.
- Bidding wars are usually connected to a specific property rather than the overall market.
- A buyer’s market is more common in slower economic times. Thus, a buyer’s market may still, ironically, be a challenge for some buyers. But for the ones who are able, it is usually considered a good time to buy.
What Areas are Included?
Northern VA is not a perfectly defined area.
Here are the counties/independent cities we used for the stats and include in the “Northern VA area”: Alexandria City, Arlington County, Fairfax City, Fairfax County, Falls Church City, Fauquier County, Loudoun County, Manassas City, Manassas Park City, Prince William County.
This is generally accepted as the Northern Virginia region, but there is no “official” boundaries so some would consider it to be more narrow than this. Others may think it includes more.
Fauquier County is one such county that some consider part of NOVA and others do not, as it is more rural and a longer drive from DC.
Homes For Sale
Here are some homes currently for sale in Northern VA, including ‘coming soon’ properties.
Selling Your Home
Are you checking the market to sell real estate in Northern VA? Every town and neighborhood has its own micro market, so we would be glad to talk with you about yours.
If you are seriously considering selling, then the next step is to get a local Realtor expert to talk to you about your property.
This page was significantly redesigned and republished from previous versions with updating monthly stats!
Want to work with us? We are a team of real estate experts who have helped buyers and sellers in Northern VA and MD & DC with decades of experience.
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