February Highlights:

• LISTINGS MAKE BID AT A BOTTOM; PRICES MOVE HIGHER
  
  
• Northern Virginia Listings UP 3.2%
  February marked the first month since June 2021 with an increase in listings (UP 3.2%). That breaks 32 consecutive months (year-over-year) Northern Virginia Listings have been down in the red. Also in February, prices accelerated with the average home price in Northern Virginia closing at $739,300 (up 10% from $673,600 in February 2023).
  
  
• Buyer Showings Surge
  Buyer Showings (demand) have surged in recent months with the fall in interest rates. During a time of relatively low winter inventory, this has made for frequent difficulty buyers accessing the homes they want to see. Advantage sellers.
  
  
• Listings UP 14% from January to February
  This reverses DOWN 5% last February and is consistent with levels seen in the last 5 years.
  
  
• February Listings DOWN 29% vs. 5-year Average
  Number of homes sold in Jan to Feb UP 1% from last year.
  
  
• Rate Locked "Discretionary Sellers" Staying in Place
  These sellers largely "stayed in place" in 2023. However, analysts are expecting sellers to begin loosening up in 2024 bringing more inventory to market.
  
  
• Contract Ratio STEADY at near 1.00 (seller-advantaged)
  
  
• Persistent Low Inventory at 1.15 months
  Inventory remains below last year's level (1.22 mos in February 2023).
  
  
• Buyer Surge Produces More Offers & Escalation
  Average Sold Price-to-List Price was up nearly two full points to 99% compared to 97% last February. Likewise, sellers have experienced a higher instance of multiple offers as well as waived contingencies like home inspections, financing, and appraisals.
  
  
• Faster to Contracts & More Cash Offers
  Last February, 46% of homes sold in the fastest range (0 to 10 days). This February, 61% of the homes sold in this range. There was also a notable increase in cash transactions with 20% this February compared to 15% in February 2023.
  
  
• Buyers Confronted More Competition
  Buyers are confronting more competition on nearly all fronts. From showings to multiple offers, to escalating prices and waived contingencies, to fewer days on market. Waived contingencies mean fewer buyer contract cancellations which are operating at 12-month lows (7%). 
  
  
• Fed January Meeting: RATES HELD at 5.25%
  The Fed held rates unchanged at the January 31 meeting. The futures market is pricing a better than 95% chance the Fed will hold rates unchanged at the March and May meetings with a 50/50 chance of a 0.25% rate reduction in June. This would be a relatively serious departure from the Fed's firm stance the last two years that they will not reduce rates until the 2% target inflation rate is reached for a sustained number of months.
  
  
• Headline Inflation RISES to 3.2%, UP 0.4% Jan to Feb
  As reported last week, inflation slightly increased from last month's 3.1%. Month-to-month inflation accelerated from 0.3 to 0.4%. Inflation remains stubbornly stuck in the 3% range for now 9 months. This is above the Fed's 2% target they said they wanted to see sustained for several months before reducing the Fed Funds rate.
  
  
• Mortgage Rate STEADY near 7%
  After a few months of rates falling to the mid 6's, they bounced back to near 7% due to persistently stubborn inflation and an economy that is not cooling as the Fed intends. The bond market reacted by bidding up rates. The bond market (which dictates rates) will need to see the same things it has been wanting to see: sustained lower inflation, softer economic data, and for the Fed to be seeing the same thing.