Early March Numbers Look Good!

The real estate sale numbers for March continue to look strong. In Northern Virginia, for every 10 homes on the market, 3.9 were under contract which is an increase of 15% over February contracts. It's important to look at homes under contract because they are an early indicator of market activity and 39% is very strong. In February, Northern Virginia posted a 33% increase in homes under contract, over January, so any increase in March is impressive. The trend is looking very promising....

One question that I get a lot is: How do I determine the direction of prices in my market?

Although there are no steadfast rules to determine future pricing, months' supply of inventory (total number of homes on the market divided by the number of houses sold per month) is a great guideline. A normalized or balanced market has 5-6 months inventory. If 100 homes sell a month, there should be 500 to 600 houses in active inventory. Based on this principle, if you have less than 5-6 months of inventory, prices should rise. This is simple supply and demand economics (low supply and high demand = price increase). Lack of supply causes potential buyers to clamor over the few homes that are for sale, which in turn drives prices higher.

In Northern Virginia we currently have a 6.1 months' supply of homes so we are right in the "balanced" range. We are seeing multiple contracts in the $350K and lower price range though. That market is very hot with foreclosures dominating. With low prices and low interest rates, first time home buyers and investors are flooding that market. If you need any further information, please feel free to text me your contact information using the following link: