The Northern Virginia Association of Realtors® has just released real estate market data for December 2019. The Fairfax real estate market update is meant to best put these figures in perspective by drawing comparisons with the December 2018 data. This will highlight the year-over-year changes and help to identify current real estate trends.
Units Sold in December 2019 were 1,525. This represents only a 1% increase over the December 2018 total of 1,514. Alone, this metric does not provide a lot of insight as the real estate sales volume is basically flat year over year.
Inventory is significantly reduced from 1,905 units at year end 2018 to 1,446 units at year end 2019. This roughly 25% reduction in homes available for sale was a significant trend throughout 2019.
The $642,000 average sales price for December 2019 represents a significant increase over $593,000 recorded in December 2018. This increase is due to strong demand persisting as a result of the robust local economy and mortgage interest rates remaining at less than 4%.
Average time on market has declined from 42 Days as of December 2018 to 30 Days as of December 2019. The steep decline in average listing days is a direct reflection of reduced and inventory and continued healthy demand.
There are many factors that drive market data. Whatever the reason, the current profile can reasonably be described as a strong sellers market. Increasing prices despite dwindling inventory is advantageous to sellers. It routinely results in bidding competition on popular listings, elevating sales prices further.
A market that swings around the medium can be described as competitive, not favoring buyers or sellers. That’s where prices are stable (in line with inflation), and average days on market is between 45–65. It’s basically where supply is equal to demand.
One hypothesis on the current market inequality is put forward by Bright MLS, the multi listing database of professionally marketed properties. They argue that due to high demand, some properties were being held off the MLS by brokers as they could successfully market them independently.
A rule change adopted January 1 by Bright MLS ensures all properties are listed on the database within 1 day of being marketed by the Broker. This one small measure will tilt the market toward increased competitiveness, but how significant this measure will be remains to be seen. As noted at the top of this post, there are many factors driving the market data.
Next Market Update: January 2019 Vs. January 2020.