Earlier this month, our CEO Terry Belt shared his forecast for the 2012 market. (You can read about what’s in store for Northern Virginia here.) But how did we finish 2011 in comparison to 2010? Let’s take a look at the numbers.
Instead of doing an analysis on the market as a whole, let’s break it down a little. As we know, real estate is local. So we selected nine sample markets to analyze: Vienna, Oakton, McLean, Great Falls, Reston, Fairfax, Herndon, Falls Church and Arlington. Let’s see how things shook out.
(Statistics are posted in the photo above, but can been seen more clearly on The Belt Team's Northern VA real estate blog).
So - what do we conclude from all these stats?
In every area listed, sales are down. This is a fact that has been trumpeted throughout the press. “Home Sales Dropping” is the typical doomsday headline. If you don’t look at ALL the information and just read the headline, you might conclude that this is a bad thing. But let’s keep looking.
What we also see in the statistics above is that in seven out of nine areas, the average home price ROSE. In the lower priced areas we saw the average price rise as much as 7.8 percent in just one year. It seems the market has not only “bottomed out” in these areas, but has turned back up.
Only two areas (McLean & Great Falls) did not see prices rise. However, these two areas did see a rise in the average sales price as compared to original list price. This may signal that we are approaching bottom there. The “luxury” markets typically trend just a bit behind the more affordable markets. But as the affordable markets have turned, so the luxury markets usually follow.
So - now you know what prices are doing. But are we in a Buyer’s Market or a Seller’s Market?
In this case, let’s take a look at an overall analysis of the Washington, D.C. region. If we compare the inventory level at the end of December 2011 to December 2010, here’s what we find:
- Single Family Home Inventory: DOWN 18.5%
- Townhome Inventory: DOWN 30%
- Condominium Inventory: DOWN 29.1%
This puts our region in general at a five to six month supply of homes - typically considered neither a Buyer’s or Seller’s Market, but a Balanced Market. However, it’s important to note that there are places in Northern Virginia where housing supply is closer to three to four months and this puts those markets closer to a Seller’s Market.