This summer, temps are not the only thing on the rise. According to the New York Times, “Prices in June climbed 9.1% from last year, the fastest pace since 1981 as U.S. gas prices, rent and grocery bills continued to soar.” We are seeing the impact of the current economy in the real estate market. After two years of extraordinary growth, real estate transactions have slowed down nationally, as well as across the DC metro region.
The Fed kept its promise of raising interest rates to help combat inflation. However, rates do remain historically low for now. Reports are indicating that we can expect another three-quarter percentage-point hike by the Fed later this month. The silver lining is that as interest rates increase after unprecedented lows the past two-plus years, the economy will benefit and most likely avoid a recession like the one we saw in 2008. The financial anguishes of the Great Recession are much different than what we are seeing today. I believe the economy, and subsequently the real estate market, will bounce back much quicker.
A leveling out in the market has been predicted by market experts for a while now, as buyers’ mentalities are shifting with the shifting market. Some bits of advice for sellers: spend more time preparing your home for sale. As I mentioned in my Q1 market update, use this time to make renovations that contribute long term value to your home, such as adding solar panels, renovating a bathroom or kitchen, or replacing old HVAC systems. You should also be preparing for a potentially longer time on market than what may have been in recent history. However, by historical standards, it is still a great time to sell.
Demand continues to outweigh supply across Northern Virginia, although the scales are tipping to a more even playing field. Supply in the current market has improved by 44%, with roughly 13,000 new listings this quarter, compared to roughly 9,000 new listings in Q1. This is more favorable for buyers who have perhaps missed out on deals in the past when the market was extremely competitive.
NoVA has seen an 11% increase in the average sales price of a single-family home in Q2, compared to Q2 of 2021. The average days on market in Q2 (16 days) improved by 60% compared to Q2 of 2021 (40 days). In Vienna, the average sales price of a single-family home in Q2 is up 9% from Q2 of 2021. The average days on market in Q2 (14 days) improved by 50% compared to Q2 of 2021 (28 days).
I am prepared and poised to navigate this new market landscape with you. Please reach out if you are ready to sell or buy your home. You can trust that I will advocate for you and use my local knowledge and global reach to achieve the best results for you and your family. Be well.