Frustration is probably an understatement if you listed your home for sale back in the spring, and it still hasn’t sold. After all, interest rates and inventory are low, right? Shouldn’t there be multiple offers and quick settlements?
Not so fast, friends.
Yes, the lack of inventory did create a sellers’ market… but only for properties with the right price, location, and presentation. Unfortunately, homes that fit those three criteria have already sold, leaving many properties that have been on the market for several months, and a bunch of sellers who are already thinking about re-listing next year.
Inventory Shortage Increases as We Head into Fall
August inventory is down from July (about 4% – 12%), and down even more from a year ago. The District and its surrounding counties appear to be showing the biggest declines, especially Alexandria at -12.4%.
In June, inventory was down from May, about 2%-7%. August continued this trend, and we can only foresee a bigger jump next month. School has started and new potential sellers have already decided to wait until next year to list their homes.
“Sellers are contacting us and saying that they want to list their home, but would rather wait to put it on the market,” says DC Team Lead Brent Roberts. He adds, “This all adds up to a shortage of supply for those who truly are motivated to buy ASAP.”
So, should you list your home now, or later? The truth is, there are many factors to consider before listing in this market. Start off by looking at recent sales in your neighborhood. How quickly are they selling? Use their performance to gauge potential buyer interest in your area.
Sales Are Not So Bad, Not So Good
Fairfax City shows a whopping 19% jump in sales, with Arlington and Baltimore showing positive growth as well. Alexandria shows a big decrease since July, but it’s up from last year.
Still, while we have some growth in certain regions, the reality is that sales are down in most areas. It’s been a common theme all spring and summer: inventory is down, therefore sales are down.
Virginia SW Team Lead Jeremy Cunningham offers this look at his market:
“In Loudoun, Prince William and Western Fairfax County, there is a sudden noticeable softening of the market. Many buyers who waited through the summer for more listings to arrive have accepted the fact that those homes simply are not going to show up. In essence, those buyers have given up for 2011. Despite the record-low mortgage rates, many serious buyers became more and more frustrated as summer dragged on, and eventually had no choice but to concede to the listing drought. The end result is that listings are getting less attention and multiple-bid scenarios seem to be a thing of the past.”
The news is not all bad for sellers; there are still some die-hard buyers out there. But if you want to sell in the next couple of months, you’re going to need to get more aggressive about pricing. Leaves are not the only thing that fall in October!
With sales declining, savvy buyers hope to benefit from the potential “fall” in prices. Montgomery Agent Karen Parnes says: “Buyers have already done their homework and are trying to take advantage of the fall market, whether the house has been on the market for a while or is newly-isted.”
Price Drops in Metro Areas
Alexandria, Baltimore City and the District show the sharpest decline in prices, while the rest of the area remains steady.
Alexandria’s pricing continues to plummet. In May 2011, median price in Alexandria was $457,626, but it has dropped nearly $80,000 in a matter of months. However, buyers are still looking to purchase in Alexandria; plenty of Redfin clients are still touring and searching there.
The District, like Alexandria, has declined in inventory, sales and pricing since July. The fear of an unstable economy and stock market appears to have taken a toll on wary buyers. Still, the market is vibrant for properties that are priced correctly.
“We continue to see multiple offers for the best priced properties, and they’re going for 98-99% of list price, on average,” says Brent. “Some of the most popular properties go well above list price. Things continue to be tight and buyers in DC need to be patient; it may take several months to a year or more to get the perfect house”.
That’s the big picture. Want to know what’s happening in your neighborhood? Download our comprehensive spreadsheet and dig into the data for yourself! Inside you’ll find county, city, and neighborhood information galore. To learn more about how we calculate these numbers, check out our methodology page. You can also liven up the place by posting a comment below.
Virginia Area Manager