May 2023 Market Update

The real estate market in Northern Virginia never ceases to amaze me. We continue to see a very low number of homes for sale with high demand even with interest rates moving slightly upward. This phenomenon is leaving us with less than one month’s supply of homes, which means if no additional came on the market, every single home would be sold in just over two weeks. In looking at the inventory levels in the three years before the pandemic, we averaged 5,247 homes for sale during the last week of April, and before that, we had even more than 5,247 homes. This year that number is just 1,529.

Normally, this is the time of year when we get the Spring surge of inventory. People try to time their move to coincide with the end of the school year, and because of the warmer weather, yards look more appealing. This is not happening this year and I don’t believe it will happen for some time.

You may ask why inventory levels are so low. The number one reason is homeowners are mortgage-rate-locked into their homes. They were wise to refinance when rates were in the mid-2s to mid-3s, and they are not willing to give those rates up for rates that are currently in the low to mid-6s. 

For those who are willing to move and give up their rate, there is nothing for them to buy so they can’t put their house up for sale. These issues combine to make the low number of houses for sale today. Many people feel trapped by their rate even though they “need” to move because of life circumstances. The low inventory levels and high demand have prices continuing to climb, which makes it difficult for some people to qualify for higher mortgages. I believe we will be in this conundrum for the foreseeable future – do you agree? I suppose only time will tell.

As I mentioned, we have very high demand at virtually every price point which results in multiple contracts on most homes. Yes, most people are waiving all contingencies to get into a home, and they’re usually bidding well above the list price. There was even a case where one of my clients lost out on a home because several buyers wrote on it sight unseen. See above where I said this market never ceases to amaze me!

If you are considering selling or buying, I am here to help give you the best advice and strategies to help you achieve your goals. Have a great Memorial Day Weekend!

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