I hope you had happy holidays and a wonderful New Year’s celebration.
Checking in to give you some updates on the real estate market now that we are officially past the start of 2024.
Rates FINALLY dropped down some (as was anticipated, but experts did not predict it would take as long as it did) into the 6%’s in December 2023. With the rate decreases taking effect, we saw more buyer activity toward the end of the year than we usually see. In many cases (not all) if the house was well prepared for the market and priced right, we saw multiple offer scenarios. There are still some fragments of the market that take longer to sell even during a competitive market. Some examples: homes that need a lot of work, homes with high monthly fees, communities that may be working through repairs, etc.
What to expect for Spring 2024…
Limited inventory has been the major struggle in our area for years now. The supply is always far less than the demand. That means, BUYERS prepare yourselves for another busy and competitive season.
This graph shows active listings in Fairfax county for the past year. As you can see, inventory levels are pretty similar to this time in January 2023 (I anticipate once we have numbers back for December 2023, we will be at slightly less). Traditionally, the number of active listings slowly rise throughout the year with some ups and downs and dip back down into the late fall and holidays. What do these numbers mean? Last year the spring was VERY competitive (running from January through June), so I’m anticipating a similar scenario for the coming months.
When talking about timing, there is no “best” time necessarily to buy, but really depends on a buyer’s priorities. Spring provides buyers with the most options and the most listings coming available, but also the most competition. Summer and fall are generally more low-key, but still a great time to buy if a buyer doesn’t want to navigate the hot spring market. Budgeting extra time in the summer and fall is wise, as it may take more time for the “right” listing to come available.
Sellers traditionally target the spring, which historically speaking does usually yield the best terms (aka less contingencies included). Keep in mind, Realtors price based on recent sales, so homes sold in the summer, fall, and winter will be priced based on values from the spring. Sellers later in the year will still likely get about the same price but are more likely to have to negotiate through home inspection, appraisal, etc.
One final chart to give you an even greater scope of the market. Below is the month’s supply of homes in Fairfax county for the last year. The red line is single family homes, yellow is townhomes, and green is condos. A balanced market is usually right around 4 months of supply in our area. You will see here that specifically townhomes and condos never got much above 1 month’s supply in the last year. The single family home stats are somewhat skewed. With higher rates in 2023, we saw many more expensive homes $1.5M+ sit on the market for longer due to the affordability issue. If we broke this down into price points, single family homes for $1.2M or less would likely follow a similar trajectory to townhomes and condos for months of supply, with more expensive single family homes at a much higher number.
Again, we are still in a seller’s market, and likely will be for a long time. There’s no fast and easy way to fix the inventory crisis in our area, especially with job openings increasing year over year for the DMV.
My biggest piece of advice for both buyers and sellers alike is START EARLY. Buyers, in order to have success in this market you need two key tools in your toolbelt. First, an experienced agent who can educate and guide you on the real estate process, and second, a great local lender who can work quickly and make you a stronger candidate. Sellers, those that are having the most success have prepared their homes well for the market. You need an expert who can give you the fine details about what your home needs to attract the most buyers and the best advice on pricing.
If you have any questions at all, don’t hesitate to give me a call! It’s never too early to start discussing your home buying/selling plans.
Alli Collier 