The Fall Market has arrived! So far this year, the market has been strong in Alexandria with some neighborhoods seeing values rising. Overall in the City of Alexandria however, sales are down 17.3% year over year, the median price is up 1% and the median price per square footage is up 5.2%. So, what is impacting these changes and how are things shaping up for the Fall market? As we see it, the five areas below have had the biggest impact on today’s market in our city.
1.Amazon HQ2 Is Having an Impact
Last Fall, speculation around a potential Northern Virginia HQ2 caused investors and developers to watch our market more closely. Once news hit at the end of 2018 that National Landing was officially going to be the location for Amazon’s second HQ, the market was impacted overnight. While we still haven’t seen a major influx of Amazon employees, we’ve seen a simultaneous rush of renters to purchase while more and more possible sellers have cited the Amazon decision as a main reason to hold onto their properties (even though it is a very favorable time to sell!), which leads us to point #2.
2. Historically Low Inventory + Off Market Sales
What explains the decrease in sales and increase in price? Low inventory! While it has been a trend over the last couple of years in our market, 2019 inventory is at an absolute record low. Low inventory means homes that are priced right and prepared properly for the market are seeing increased prices and are generating more attention from buyers. We’re also seeing a large increase in off-market sales due to programs like Compass Coming Soon. So far this year, our team has sold 34 homes (26% of our team’s total sales) off of the active market! If you’re a buyer and aren’t working with a local agent in the know, you could be missing out on opportunities as homes are often sold before they have a chance to be entered into MLS.
3. Interest Rates Are Low Again!
Interest rates are still incredibly low and real estate loves low interest rates! Last fall, we saw a steep increase in rates, only to come back down earlier this year. They further dropped at the end of summer and have remained consistently attractive since then. Rates were lowered further in mid-September by the Fed as expected. They cut interest rates by a quarter-point to a target range of 1.75% to 2%, along with a 30-basis-point cut to the interest paid on so-called excess reserves. Now is a great time to buy or refinance! Please let us know if you need a recommendation for a local lender to talk to about your options.
4. Talk of a Looming Recession
There is a lot of chatter in the news right now about an impending recession. However, 65% of CFOs say the U.S. economy will not experience a recession in 2020. The majority of CFOs say that the current level of interest rates are “appropriate.” (CNBC) As of now, the recession discussions haven’t had much of an impact on our local market.
5. No Federal Elections or Government Shutdowns
While talk of a recession looms, there are no major federal elections or talks of a government shutdown this Fall, which historically indicates we should have a stronger than usual Fall market.
As always, if we can answer any questions or help you with any real estate needs, please reach out. We are here to help!