Ask McEnearney: Is the number of contracts in Alexandria City closer to normal levels this year than in 2020?

This week’s Q&A column is written by David Howell, Executive Vice President and Chief Information Officer, of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant market news, contact David at 703-738-9513 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: Is the number of home sale contracts in Alexandria City closer to normal levels this year than in 2020?

Answer: In August we wrote about our mid-year Market Report, which takes a look at closed sales in Alexandria City for the first half of 2021 compared to the same months of 2020. As expected, there were substantial improvements this year compared to the peak months of shutdowns and isolation due to COVID. But 2020 was definitely not a normal year as far as traditional spring and summer markets are concerned, so this week we decided to go a little further back and compare contract activity for this year with both 2020 and 2019, which was a more “normal” year for Alexandria real estate.

For the past three years, overall contract activity for the first eight months of each year breaks down as follows:

• 2019 had 1,824 contracts
• 2020 had 1,873 contracts
• 2021 had 2,256 contracts

As the first two charts below show, those strong numbers for 2021 bear out for each price category and property type (condo, attached and detached homes). The third chart looks at contracts by month and demonstrates that this year mirrors 2019 with more activity during the spring months and a bit quieter in July and August. COVID was a major disrupter to that typical spring and summer cycle last year. (Source: BrightMLS. Data deemed reliable but not guaranteed.)

In August we included the following thoughts about what’s ahead for the second half of the year. We look forward to a strong fall market!

• We expect buying activity to continue to improve — modestly — through the rest of the year.
• While the abundance of condo inventory will gradually be absorbed, there will continue to be relative bargains available to the purchasers of smaller units.
• Continuing a trend from the last couple of months, there will be marginally more new listings coming on the market than homes going under contract. That will gradually begin to ease the very tight supply of attached and detached homes.
• Based on our own projections and the BrightMLS forward-looking Home Demand Index, almost every area of the city will be in the “high demand” category, signaling a healthy second half of the year.
• The area with the highest demand will likely be the West End.
• By price range, we will likely see detached homes priced between $700,000 and $1,250,000 continue to be exceptionally strong. For attached homes, the hottest price range will be $500,000 to $1,000,000. In both cases, these will be what we consider “extreme” seller’s markets.
• For condos, the hottest part of the market will be for units priced between $500,000 and $800,000, but that price range will not be as strong as the market for attached and detached homes.

If you would like a question answered in our weekly column or to set up an appointment with one of our associates, please email [email protected] or call 703-549-9292.