Wary Northern Virginia Sellers Delayed Listing Homes in April; Competition for Limited Inventory by Undeterred Buyers Kept Prices at a Premium
"As our Northern Virginia real estate market approaches the two-month mark under COVID-19 conditions, residential housing is still a hot commodity for motivated buyers," says Nicholas Lagos, president of the Northern Virginia Association of Realtors® and associate broker with Century 21 New Millennium in Arlington. "Responding to the needs of buyers and sellers, Realtors® have been nimble in adjusting their procedures while ensuring safe practices under the circumstances," Lagos says.
"With inventory levels reaching all-time lows, homes across the NVAR footprint averaged more than 100% of their list price.
"While the average sold price increased regionally by nearly 7.5% above the April 2019 levels, the pandemic has affected our normally active spring listing rush," Lagos says, "but the data across the region shows buyer demand is vigorous and active.
"As expected, the April 2020 market saw a decrease in overall sales volume primarily due to the stay-athome orders imposed by Governor Northam in early March," Lagos says. "With many potential buyers and sellers keeping their distance, existing inventory shrank even further," Lagos says.
Despite strong buyer interest, the limited number of available homes for sale has reinforced the strong sellers' market in the NVAR region, which covers Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton.
Arlington County, Alexandria and Fairfax County saw new listing inventory drop 17%, 36%, and 35% respectively compared with the number of homes available for sale in April 2019.
"We were down on closed units on average by 20% last month," says Deborah Baxter, NVAR board member and principal broker/co-owner of Coppermine Realty in Clifton. "Interestingly, the type of housing that is selling is single-family homes, then condos and lastly townhomes. The National Association of Realtors® has reported that more people are buying multi-generational homes and firsttime home buyers are going for condos; the townhome that used to be the young family's first-time buy isn't necessarily the case anymore," Baxter says.
Buyers are also acting quickly, Baxter explains. "The number of days on market is an average of 13 days, so we are still in a multi-offer situation. We are in a severe housing shortage which means more of a competitive situation for buyers," Baxter says.
The long-term COVID-19 impact on the region's housing market is difficult to predict, with a number of variables in play, including the length of time that businesses remain closed, job losses, and consumer sentiment.
According to Dr. Terry Clower, director of the Center for Regional Analysis at George Mason University, rising unemployment levels may not have the same impact in Northern Virginia as elsewhere in the country. Speaking about the region's market during an April 30 webinar hosted by NVAR, Clower said, "The NVAR region is dominated by the Professional and Business Services sector, which helps to stabilize us." The federal government underpinnings also contribute to that stabilizing effect, Clower explained.
Pre-pandemic market conditions in the NVAR region have helped to prevent a decline in home values, explains NVAR CEO Ryan Conrad. "Given the uncertainty surrounding COVID-19, it is encouraging to see buyer activity that reinforces the resilience of the Northern Virginia economy," he said.
A recording and presentation slides from the April 30 program, which also featured Dr. Lawrence Yun, chief economist for the National Association of Realtors®, and Dr. Lisa Sturtevant, chief economist for the Virginia Realtors®, can be found at NVAR.com/onlinelearning.