The tale in July was essentially the same as in the preceding few months for the Northern Virginia homes market: Tight inventory, rising interest rates and higher prices presented a trifecta of challenges for sellers, pushing total sales down but keeping prices up.
Sales across the catchment area of the Northern Virginia Association of Realtors (NVAR) totaled 1,444 in July, down 20 percent from an already cool July 2022, according to the trade organization. Year-over-year sales were down in double digits in all component jurisdictions: Arlington and Fairfax counties and the cities of Alexandria, Fairfax and Falls Church.
The average ($806,574) and median ($691,000) regional sales prices for the month across Northern Virginia were up 4.9 percent and 6.3 percent, respectively, from a year before, outperforming growth at the national level. In the three major jurisdictions, prices were up in Fairfax County and Alexandria, down in Arlington.
(Figures represent most, but not all, homes on the market, and July 2023 figures are preliminary and subject to revision. For full data, see the Website at nvar.com/public.)
Nationally, the median home price in July was $406,700, an increase of 1.9 percent from July 2022.
Cash continued to be a popular choice to pay for homes, propelled by high interest rates as well as by buyers tapping into proceeds from selling their current properties – and, in some cases, by developers swooping in and scooping up properties for future redevelopment. In the NVAR region, cash sales accounted for 19 percent of all sales in July, up from 15 percent in July 2022.
NVAR and its partner, the Center for Regional Analysis at George Mason University, expect the current dearth of inventory to remain as homeowners sit pretty on rock-bottom mortgage-interest rates. That is expected to maintain the existing sellers’ market.
But at the same time, the groups caution about “mounting risks” that the local market faces. They include the possibility of elevated mortgage-interest rates and layoffs in the technology sector.
The mid-year economic update projects “stable” home prices, with slight increases in coming months.