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 703-855-5089 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.
Question: How was the real estate market in the Fairfax County portions of Alexandria for the first half of 2022?
Answer: Earlier this month, we took an in-depth look at contract activity in the City of Alexandria for the first half of the year compared to the same months of the previous year. (Read more here.)
This week we will look at the data for the Fairfax County portions of Alexandria (which we will refer to as South Alexandria going forward) during the same time.
One of the main differences between the city and county is the mix of condos, townhomes and detached homes. The graph below looks at contracts for each area based on these property types. The number of attached homes (duplexes and townhomes) is similar, but condos are the largest segment of the more urban neighborhoods of the city, and detached homes are the primary segment of South Alexandria’s suburban housing stock.
The remaining charts are concerned only with South Alexandria. To put contract activity into context for the first half of 2022, we will first look at month-end inventory and the number of new listings coming on the market year-to-date.
- Month-End Inventory: At the end of June, there were 7% fewer homes on the market in South Alexandria compared to last June. (The City of Alexandria has seen a decrease of 28.0%.)
- New Listings by Month: With the exception of February, so far this year the number of new listings coming on the market each month was down. Year-to-date, the number of new listings has decreased 8.5%.
The next set of charts break down contract activity for the first six months of 2021 and 2022 by price and by property type. South Alexandria has seen decreases across all property types (condos, attached and detached homes). By price category there has been an increase for homes priced more than $750,000.
- Contract Activity by Price Range: Overall contract activity in South Alexandria decreased 10.5% in the 1st half of 2022 compared to the 1st half of 2021.
- Contract Activity by Property Type: Contract activity in the condo market decreased 10.1% and attached homes activity decreased 11.3%. The number of detached homes, the largest part of the South Alexandria market, going under contract in the 1st half of 2022 decreased 10.1% compared to 2021.
As we head into the summer months, we’ll be paying close attention to two key market indicators: mortgage interest rates and inventory. Currently, mortgage rates are more than two and a half percentage points higher than they were a year ago (5.5% now-2.9% last July), and that has already impacted affordability and contract activity.
We fully expect that there will be fewer transactions in the second half of the year as buyers adjust to a tougher financing environment — but for those who can afford to purchase there will be more opportunities to negotiate home inspection and other contingencies that were almost impossible in the overheated market of the last two years. How much leverage those buyers have will depend on inventory.
Despite the drop in contract activity, there still aren’t enough homes on the market to meet demand, and that will keep some upward pressure on home prices in South Alexandria. Sellers are going to be adapting to the new realities of a softer market with fewer multiple offers and more modest price appreciation.
Note: Data derived from BrightMLS and is deemed reliable, but not guaranteed.
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.
McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria
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