September Highlights:
- DID PRICES JUST HIT AN INFLECTION POINT?
- Northern Virginia Home Prices DOWN 4.8%
While median prices in all sub-markets remain at relative highs, and prices are up 3.5% YTD compared to last year, September marks the largest month-to-month fall in prices in over 6 years. Making this even more worth watching, Fairfax County, the area's largest sub-market carrying approximatley 50% of Northern Virginia's activity, experienced a decline in median prices of 9.1%. Average prices declined ever sharper (-14%) with detached homes and condos carrying the move (townhome prices were unchanged). While significant, this is just a month-to-month move. It remains to be seen if this will be the beginning of a larger decline in home prices over time as desired by the Federal Reserve, or simply a relaxing of prices continued to be held up by low inventory. - Buyer Showings Tracking Near 2023 Low
Between the typical summer pivot and a rise in interest rates, Buyer Showings operating below January levels. - Listings DOWN 7% from August to September
This compares to typically UP 3% last 5 years. - September Listings DOWN 41% vs. 5-year Average
Number of homes sold Jan to Sep DOWN 25% (7,200 homes). - "Discretionary Sellers" are Staying in Place
- Contract Ratio steady at 0.91 (shift to buyers)
- Persistent Low Inventory, but Rises to 1.25 months
- Sellers See Fewer Offers, Less Escalation
Average Sold Price-to-List Price falls 0.6% to 100.0% (Aug to Sep). - Buyers are Finding Less Competition
As of the week ending October 8, there was a 23 pts spread between Listing and Showing movement. Seller listings are 19% below the 2023 highs seen in April, while buyer showings are down 42%. It's certainly still a seller's market, but buyers are able to navigate with less competition than earlier in the year. - Fed Meeting in Sep: Fed Rate REMAINS at 5.25%
Fed signals another increase later in 2023, and suggests holding rates at these levels for the next two years. - Headline Inflation HOLDS at 3.7%, UP 0.4% Aug to Sep
Reported on Oct 12, inflation holds steady at 3.7% year-over-year. The recent month-to-month increase (0.4%) remain problematic with annualized inflation suggesting higher inflation to come. Inflation remains well above the Fed's 2% target they want to see sustained for several months before reducing rates. - Mortgage Rates Rise from Low to Mid 7's
Rates at relative highs, even pressing against 8%. Rising rates continue to cut buyer purchasing power, consequently sidelining even more buyers at a time of year when showings are seasonally down.