Northern Virginia Real Estate Market Update through August 2009

The real estate market cooled slightly in August from July.  This is typical of what happens each year as fall approaches.  In August, buyers had a little easier time finding a house that earlier in the summer.  Nonetheless, houses are moved a lot quicker this August than the previous three Augusts.

We continue to see price recovery.  For the first time in several years some areas sold at a higher price that they did the year before.  This was true in August for Prince William and Loudoun Counties and will likely be true for Fairfax County, and the Northern Virginia area as a whole in September.

The next couple of months will likely see increased activity as many first-time buyers are hurriedly trying to find a house and close before the November 30 expiration of the $8,000 tax credit that many of them are eligible for.  I expect activity to increase through the end of October then slow somewhat after that.

I have heard a lot of talk about a “shadow inventory” of houses that will be foreclosed on shortly and hit the market, causing it to be flooded.  It is difficult to get statistics on how much inventory to expect (please comment if you know a source for LOCAL statistics on this!), but our inventory is so low at this point it would allow more buyers to buy and really help our market.  Even with the light inventory currently on the market, buyers are having a hard time actually purchasing many of the houses because of the financial condition of the current owners.  The first question many buyers are asking about a house is “Is this one really for sale?”  More inventory would allow these buyers to get into homes.

Here are the statistics for the past several years through the end of last month:

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