The major change we saw in the market this past month is that prices are climbing. The lack of inventory has become a real problem, with about a three-month supply of homes on the market in Northern Virginia in general. Bidding wars are taking place on many houses right now. I wrote two offers for clients this week; one house had 5 offers on it, and the other 15. Both had been listed just a few days. Buyers who experience these situations tend to bid higher on the next house they see, and as a result prices in the area are going up.
The other thing that has been going up is interest rates. It will be interesting to see how buyers react in a higher interest rate environment. The cost of borrowing money went up about 10% in the first couple weeks of June. Even though this is true, the biggest complaint I am hearing from buyers is that there are no good houses to see.
The spreadsheet with all the stats for the past couple of years, now including May of 2009 is below. Note that the supply of homes on the market stayed pretty steady from April to May, while average prices climbed fairly significantly in most jurisdictions. Make sure you click on the various jurisdictions at the bottom of the spreadsheet to find the area you are most interested in.
Written by Jeff Royce of Frankly Real Estate, Inc. Fairfax, VA, 703-585-5663