By Sue Goodhart
ALEXANDRIA, VA- Back in January, I predicted the first half of 2019 would be a strong real estate market in Alexandria due to low interest rates and the announcement of Amazon and the Virginia Tech Innovation Campus. That hunch came true and then some. We saw remnants of the early 2000s, with properties receiving 8-12 contracts and buyers removing all contingencies. We predicted inventory would be low and it is. Some sellers are deciding to rent or waiting to sell to see how much impact “The Amazon Effect” will have on home values. Granted, for those heading out of the area or planning to downsize, that strategy could be a good one.
However, for those hoping to move up or move laterally, there may be no gain in waiting. If you own a townhome that is worth $500,000 and you wish to move up to an $800,000 property, a 10% increase in price means that your home would be worth $550k but what you want to buy would be $880k. The gap would be $330k instead of $300k. As for renting your home, there is some risk in that as well. New apartment buildings are going up everywhere. If you have enough of a gap between your monthly payment and the rent you can capture, it could be a good bet. If not, be prepared to cover that gap and the months it can go vacant waiting for tenants.
Let’s look at the stats.
As of the end of April 2019, the total inventory of available homes in Alexandria City was 165 compared to 416 at the end of April 2018 – that is a 60% decrease in active listings. Reflecting the vacuum cleaner-like way that buyers have been sucking up inventory, new under contracts in April 2019 was 246 compared to 117 in April 2018 – an increase of 110%! So, less inventory and faster absorption.
Prices are going up in most areas. The average sold price increased by 5.58% over April of last year from $571,022 to $602,862 in 2019. Although it is a solid gain, not every home stepped up by that much nor did every home sold. New listings in Alexandria City were down from 2018 in April by 26.8% with the greatest decrease in new listings in 22305 of 58.5%. We experienced this with the fight for property in Parkfairfax and Warwick Village. Does inventory in Old Town seem tighter? That is because it was down 40% from last year in April. Surprisingly 22301 had 25% more new listings in April but I believe we saw a lot of townhome owners selling to move up to larger homes.
Not all price points are selling, and in some neighborhoods, prices are dropping. Homes above a million are more likely to sit longer, and in some neighborhoods, the days on market can be long. We are seeing the market cool from the fever of Spring, so at this junction it is hard to determine what the rest of this year will bring. Interest rates remain low and market confidence remains high. That tells us that we should see a good market through the rest of 2019.
One more point worth remembering: The market is not rewarding homes that don’t show well and that are too ambitious in the pricing. You can’t just put on a high price and expect it to sell. A good solid strategy for selling your home is taking advice from a licensed agent who will get you where you want to be.