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Northern Virginia Market Update through June 2010

Everybody is trying to figure out what the real estate market is doing right now and having a hard time.  Looking at sales numbers is like looking at the home run numbers of your favorite baseball slugger earlier in the decade and trying to figure out if he would have deserved making it into the hall of fame had he not taken steroids.

The national real estate market just came off the steroids of an $8,000 tax credit paid to first time home buyers and a slightly smaller one paid to move-up buyers.  Of course the market isn’t doing as well as it was when the government was handing out money.  But ever since the tax credit ended on April 30, the Northern Virginia market has been selling about 25% of it’s inventory each month which correlates to a 4 month supply of homes on the market.  That is a fairly fast  (though not on fire) selling market by any measure.  That tells me that there are still buyers who need homes and there is not a fire sale going on among people in financial difficulty.  In other words we have a pretty even, steady market in Northern Virginia as a whole.

As you look at the numbers below for the various jurisdictions, keep in mind that the sales numbers are for houses going under contract, and the pricing numbers are for closed sales.  So the large number of sales you see in April were actually closing in May and June.  The tax credit inflated sales numbers in April, and inflated closing prices in May and June.  July should show us a market that is not influenced by the credit and therefore should become the new baseline month for the future.

Here are the actual numbers:

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Written by Jeff Royce of Frankly Real Estate, Inc. Fairfax, VA,  703-585-5663

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  • Cara

    Great analogy. I totally agree that we really have to wait until July to get a clearer picture. The percent of homes under contract is a good attempt, but isn’t it distorted by the long contract times on short sale houses? If 17% of the market in FFX Cnty is short sales, and if to get a rough idea, we assume that 17% of under contract homes are also shorts, that would reduce FFX Cnty’s 17% UC rate to 14%. It could be even worse if a larger proportion of shorts than normal sales are UC at any given time, but it could also be better if the percentage of shorts has changed since your December report (extremely likely).

    The overall NoVa number of 25% seems pretty healthy, but 17% for FFX, when we know there are a lot of shorts out there under contract is definitely a large pull-back post-steriods. The real question is how long that pull back will last. (it could already be over for all I know).

  • Cara…Short Sales seem to be influencing the market a little less than they were six months ago. This morning in Fairfax County there are 3,635 properties on the market and 3,195 of them are not short sales. So those 440 short sales make up about 12% of the market in Fairfax County compared to the 17% of the market we saw in December.