Number Of Homes For Sale In NoVA To Get Even Tighter In 2024: Realtors

NORTHERN VIRGINIA — Real estate experts are forecasting even tighter housing inventories in Northern Virginia in 2024, although home sales prices are not expected to rise at the same rate as they have in recent years.

Over the past year, the real estate market in the region proved to be extremely resilient, with prices on sold homes continuing to climb despite higher interest rates, Terry Clower, director of George Mason University’s Center for Regional Analysis, said Wednesday during a Northern Virginia Association of Realtors press briefing.

But in 2024, home prices in the inner suburbs — Arlington, Alexandria and Fairfax County — are expected to increase by 3 percent on average in 2024, a slightly lower rate than the region has seen over the past several years.

The outer suburbs, including Loudoun, Prince William and Stafford counties, will see a slightly higher escalation in home prices, likely in the 5-percent range, Clower said.

The lower inventory of homes on the market is due in part to the increase in interest rates. Homeowners with a 2.5- or 3-percent mortgage rate are less likely to want to move because they do not want to get a new mortgage in the 6- to 7-percent range, he said.

Clower said he believes interest rates will remain in the 6- to 7-percent range for the foreseeable future. Prospective homebuyers should not wait around for interest rates to drop back to 3 percent because that is unlikely to happen, he said.

READ ALSO: Scarce Inventory Still Making It Hard To Become NoVA Homebuyer: NVAR

In its 2024 forecast, the Northern Virginia Association of Realtors, for the first time, included data for Loudoun, Prince William and Stafford counties.

NVAR and the Center for Regional Analysis expanded its forecast to include these counties largely due to the effects of the COVID-19 pandemic, where people are now able to live further out and work remotely.

Clower also emphasized that many realtors can’t be as hyperlocal in their focus and need to learn more about housing data in areas outside a particular part of a county due to this trend of homebuyers looking into the outer suburbs.

From a jobs perspective, the D.C. area, including Northern Virginia, is not as strong as it used to be in attracting companies due to the higher home prices and people wanting to live in areas where they have a better chance of purchasing a single family home.

Jobs growth in the D.C. area is “being hampered by a lack of homes,” Clower said.

As for first-time homebuyers, “a hunk of them have been priced out” of the region, he said.

Owning a home is one of the best ways to build intergenerational wealth, but home buying has become harder than ever for younger people, he said.

Thai Hung Nguyen, the 2024 president of NVAR, said there isn’t much housing inventory from which younger buyers can choose, with soaring sales prices and higher interest rates creating monthly mortgage payment that are out of reach for them.

Realtors are tasked with protecting their clients, explained Heather Embrey, the 2024 immediate past-president for NVAR. While the inventory of homes for sale has declined, the market has shifted where most buyers do not have to waive their right to a home inspection and make other concessions in order to get an offer accepted, she said.

Despite the low inventory and the high interest rates, Embrey offered some hope for homebuyers. "You can be a homeowner, but it just requires patience," she said.

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