We’re officially in that season of happy haunts – one of my favorites to kick off the holidays. With that, I think it’s important to give an update on the real estate market and the latest trends for buyers and sellers post Labor Day.
As many of you probably already know, there’s almost always a big uptick in both listings and buyers in the spring. But what probably many of you do not know is that we tend to see another small pop of listings and buyers out post Labor Day in the fall, leaving the summer months and winter months as the slower times of year in real estate. We do typically see inventory dip some as we approach the holidays so if you are considering a fall purchase you really should get started ASAP!
This fall has been pretty well in sync with last year so far, mirroring its similarly low inventory and a small increase in buyers popping up. All that said, it is interesting to note that we now have more active listings than pending listings, which is a dynamic we didn’t see in 2020. In my opinion, the late fall slow down that we normally see as we approach the holidays has been more pronounced this year compared to prior years, with listings sitting for a little longer than usual and more price reductions than in the past. The good news for buyers is this maybe is an indication that the market is heading in a direction that isn’t quite so tipped toward sellers.
TLDR, and this is important: We are still in a sellers market, but you can expect to see buyers being pickier and less willing to make large sacrificing when competing, specifically at this time of year. All-in-all, buyers will have more negotiating power and probably the ability to include contingencies (of course, it is situational) throughout the rest of this year and into January. That said, I expect to see the market in full competitive swing again come spring of 2022.
I’m about to dive into some charts and stats for those who really want to geek out with me, but first a small side note (and I’ve mentioned this before). The condo segment of the market was hit hardest by the pandemic. That being said, there is still more condo inventory available than usual, creating a great purchasing opportunity for buyers. I can’t stress this enough. If you are in the market for a condo, don’t wait! Two reasons in particular: it is likely that next year the absorption rate for condos will increase as they become more in demand when people return to work, a secondly, interest rates are still very low right now.
And onward to dive into the “fun” stuff! I’m beginning below by showing you the supply chart for the last couple of years. I’ve selected Fairfax County in particular, but this should be comparable to other parts of the DMV. You’ll see below, inventory has decreased overall since 2018 and there are clear patterns to seasonal inventory increases and dips each year. The good news is that our inventory as of September is pretty comparable to that of 2020, and so is most of the rest of the year, so we didn’t see a huge dip this year from last year. Clearly though we are well below what inventory was in 2018 (inventory has decreased year-over-year since 2015). For those wondering why it seems we are perpetually in a sellers market, this is why.
The below chart compares active listings versus pending listings over the last two years in Fairfax County. Notice that the pending purple lines are currently lower than the yellow active lines? This is by far the most interesting data to me. This fully supports my statement above that we are seeing the movement of listings slow in comparison to prior years. I’m not insinuating here that we are on the brink of a large market shift, as we almost always see pending listings decrease and active listings increase at this time of year, but it does indicate to me that maybe we are out of the chaos that was this year’s sellers market, and we might be entering a small shift in the buyers’ favor. Keep in mind, we are in no way currently experiencing a “balanced” market, and I doubt we will next year either. Key take-away here is this really is a great time for buyers to dive in, as there is still a good amount of inventory available and buyers currently have more negotiating power, which is unlikely to remain the case once we hit the Spring market. For sellers, the market will likely continue to cool as we get closer to the year end so if you want to sell in 2021 it’s important you do so now.
Have any questions about what I just shared, or want to know more about the market? Don’t hesitate to reach out.