There are nearly half as many homes available for sale in Alexandria as the year before, according to city officials.
A complicated mix of reasons is behind the decline, but one reason looms above others: Amazon.
“Amazon announced its arrival one year ago,” said David Howell, executive vice president for McEnearney Associates. “Since then, we’ve seen 46% fewer listings in Alexandria and 44% in Arlington… The inventory began to shrink literally the day after the announcement.”
At a City Council retreat on Saturday, marking the launch of the budget cycle, City Manager Mark Jinks highlighted the scarcity of homes for sale in Alexandria.
“Active listings a year ago were 450,” Jinks said. “There are only 208 active listings in June 2019. There’s not a lot of inventory on the market for people to purchase. There’s a lot of speculation about what that means. Are people not selling because they think they’ll be able to get more? Are people not purchasing because they can’t? There’s so much uncertainty.”
Jinks explained to the Council that many homeowners who might otherwise be selling their properties are holding out in hopes that Amazon will increase the home value.
“Do I sell my home now or wait another couple years with Amazon coming will I get ten percent more or 20 percent more?” Jinks asked, hypothetically. “It’s a lot of speculation for what may or may not happen. There is not a lot of property for sale and a lot of speculation about why.”
Both Howell and Jinks said there are other factors at play both nationally and locally.
“Interest rates are low and the region is growing,” Jinks said. “There’s a demand for residential, as we’ve seen, but we’re not seeing price appreciation. At almost any other time like this, we would have seen single-family homes and townhomes move up appreciably, and we haven’t seen it. Some of the speculation is that people with student loan debt [make it] harder for people to afford the ownership market.”
While student loan debt could keep people from buying homes, Howell said he doubted that would impact the sellers. More likely, Howell said it’s a result of some after-effects of the housing bubble burst a decade ago.
“The big lesson is people aren’t selling for speculative reasons after the bust,” Howell said. “Appreciation is more modest and sustained because people are buying where they want to live rather than using the home as an ATM. People are staying put.”
Howell also said many of those homeowners were able to lock in low mortgage rates.
“We will see a sustained low inventory over time,” Howell. “That’s true nationally, but in Arlington and Alexandria especially.”