As featured in The Washington Post
So far in 2016, home values and market indicators in Northern Virginia have shown very slow, if not minor backward growth, according to Rockville-based multiple-listing service MRIS.
Several key indicators, including average sales price, number of days on market and sales to list price ratio all are moving forward.
But compared to Washington, that growth is occurring at a much slower pace.
Here is how the Northern Virginia market is faring so far this year:
Average sales price
Sales prices in Northern Virginia have stagnated in many counties until this point in 2016. The average sales prices in Arlington (up 0.22 percent to $638,166) and Fairfax County (up 0.27 percent to $546,857) show very minimal growth compared to 2015 while average sales price dropped in Loudoun County (down 0.17 percent to $479,788) and the city of Alexandria (down 1.52 percent to $536,043).
Upperville has the highest average sales price in Northern Virginia so far in 2016 at $1,456,593. Great Falls has the second-highest average sales price at $1,141,172. And McLean has the third highest at $1,094,677.
Among the biggest gainers in Northern Virginia were McLean (up 12.8 percent so far this year to $1,094,677) and western Arlington in Zip code 22213 — up 11 percent to $959,476.
In all the, the average sales price of homes throughout Northern Virginia remain much higher than the national average even if growing at a slower pace than D.C. and Prince George’s and Montgomery counties in Maryland.
Days on market
The average number of days on market — the number of days a property takes to go from active to under contract — have decreased significantly in 2016 for Loudoun County (down 15 percent to 53 from 63 in 2015) and Alexandria (down 9.26 percent to 49 days from 54 in 2015). However, days on market have increased in Arlington County (up just one day on average from 49 to 50 days in 2015) and Fairfax County (up 6 percent to 53 days from 50 days on market in 2015).
In Northern Virginia, homes are selling the fastest in the 22301 Zip codes of Del Ray and Rosemont (six, the same as 2015). Other cities of note include Centreville (13 days in 2016, down from 18 in 2015), and Annandale (14 days in 2016).
As with this year’s trend of homes selling faster in Loudoun County, median days on the market is the most changed in Purcellville (down 50 percent to 24 in 2016) and Middleburg (46 percent to 86). One big reason for a change in the number of days on market in Loudoun may be because of the drastic change in the types of inventory in the county, specifically inventory that has been removed from market or sold after longer periods of time on market.
Sales to list price ratio
Finally, the sales price to list price ratio — the ratio of the price a property sells for compared to its original listed price — for Northern Virginia remains largely unchanged from 2015. Small gains have been seen so far this year in Loudoun County — up 0.48 percent to 97.7 percent. The ratio in Fairfax County has remained unchanged in 2016 at 97.4 percent. At the same time, slight decreases were seen in Arlington (down 0.06 percent to 97.8 percent) and Alexandria (down 0.1 percent to 97.5 percent).
Historically, the sale to list price ratio is generally very high in the Northern Virginia area. In particular, the ratio of sales price to list price is highest in the 22205 Zip code of Westover area (99.35 percent) of Arlington. Other high sales to list price ratios can be found in Del Ray/Rosemont (99.04 percent) and Burke (98.74 percent).
Trending areas where the ratio is increasing are in the Loudoun communities of Middleburg (up 8.1 percent to 92.44 percent), Waterford (up 2.1 percent to 94.66 percent) and Clifton (up 1.3 percent to 97.2 percent).
This trend tends to show that homes are more appropriately priced closer to D.C. compared to farther from the city in Fairfax and Loudoun counties. Moreover, Fairfax and Loudoun tend to have more luxury and high-priced properties in certain areas. This may lead to homes with prices well above the average, and thus, a greater change of the small sales price compared to the original listed price.
What does this mean for the rest of 2016?
Although the market certainly has not shown overarching changes in Northern Virginia, it has not experienced large-scale declines through the end of June 2016.
Across each of the surveyed areas, home sales are continuing largely at the same pace at 2015. This slow growth should continue through the remainder of the year even with low interest rates resulting from the conservative nature of the market.