The housing market in Northern Virginia remains strong. The Northern Virginia Association of Realtors (NVAR) reports a 38.4% increase in home sales in March 2023, compared to February 2023, indicating a strong start to the spring market. The optimism prevails despite sales dropping 32.1% compared to March 2022, indicating a return to pre-pandemic norms.
The Northern Virginia marketplace remained resilient, with median home prices slightly increasing and inventory growing from a year ago. Although higher mortgage rates have made it difficult for first-time homebuyers to afford monthly payments, NVAR is optimistic that rates will continue to drop compared to last year, helping with affordability.
Northern Virginia Housing Market: Current Trends
Northern Virginia’s housing market remains hot, with homes selling quickly despite a decline in sales compared to last year. Home prices remained stable, with a median sold price of $665,000, up 2.3% from March 2022. Homes stayed on the market for an average of 22 days, up 57.1% compared to March 2022, giving buyers more time to negotiate. Inventory grew by 59.9%, with .09 months of inventory, indicating a return to pre-pandemic norms.
Northern Virginia Housing Market: Forecast
NVAR’s forecast for the Northern Virginia housing market remains positive, with an expected increase in home sales as the spring market continues to heat up. With inventory growing and buyers having more time to negotiate, sellers are expected to have less leverage. Although higher mortgage rates have made it difficult for first-time homebuyers to afford monthly payments, NVAR is optimistic that rates will continue to drop compared to last year, helping with affordability.
Therefore, Northern Virginia's housing market is off to a strong start in the spring of 2023, with sales increasing despite a decline compared to last year. With inventory growing, buyers are expected to have more options, leading to less leverage for sellers. Although higher mortgage rates have made it challenging for first-time homebuyers to afford monthly payments, NVAR is optimistic that rates will continue to drop compared to last year, making affordability more manageable. Overall, the Northern Virginia housing market remains resilient, with stable prices and positive forecasts.
Will the Northern Virginia Housing Market Crash: Forecast for 2023
According to the 2023 Northern Virginia Association of Realtors (NVAR) Residential Market Forecast, the housing market will continue to experience a slowdown due to the rise in mortgage rates that began in the spring of 2022. The forecast team expects that the recession may start in mid-to-late 2023, which will further depress the market.
However, pent-up demand will maintain the market as a seller's market, with demand remaining soft compared to the previous two years. Home inventories will get tighter, as owners stay in their homes with refinanced loans below 3%, leading to a decline in unit sales by low double digits. Prices are expected to remain stable, with a modest increase of less than 1% on average.
In Fairfax County, the market for single-family homes is expected to remain flat, with a 0.4% price gain in December 2023 compared to December 2022, and a total unit sales drop of 9.7% due to tight inventories. Townhome unit sales will decrease by 15%, and prices will remain stable, with a small expected increase in median prices of 0.4%. Condominium prices will remain flat, with unit sales decreasing by 11% on the year.
However, condo inventories are expected to rise, as labor market forces are starting to influence some condo owners that are boosting interest in selling. In Arlington County, single-family home prices will rise at a slower rate than in previous years, with a 3% increase in December 2023 compared to the previous year. Unit sales will decrease by about 6%, and inventories will continue their multi-year drop. Prices for Arlington townhomes will remain flat, while inventories decrease.
Sources:
- https://www.nvar.com/realtors/news/market-statistics
- https://www.zillow.com/home-values/4655/fairfax-va/
- https://www.zillow.com/home-values/30258/arlington-va/
- https://www.nvar.com/docs/default-source/market-stats-home-sales-reports/2023-nvar-forecast-report.pdf?sfvrsn=905a6d0c_2
