NoVA Residential Home Market Shows Signs Of Fatigue Heading Into Holiday Season

NORTHERN VIRGINIA — The Northern Virginia housing market is cooling off, with many sellers who put their houses on the market in late summer and early autumn finding they may have waited too long to get the price they wanted.

Home prices are still incredibly high in the region, especially in areas such as Arlington, Falls Church and Alexandria. But buyers are not offering as much money for homes as they were in the region's scorching-hot residential real estate market of late 2020 through July 2021.

With the calendar flipping to November, houses are staying on the market longer, and sellers in many areas of Northern Virginia are dropping their prices.

The slowdown in Northern Virginia home sales activity has been stronger than the nation as a whole. According to the Northern Virginia Association of Realtors, the slowdown was down 5 percent in September compared to year-ago volume, while sale numbers nationally dropped by 2.5 percent in September.

“In a reversal from previous months, the Northern Virginia market slowed more and houses sat longer on the market in September than the national marketplace,” Ryan McLaughlin, CEO of NVAR, said in a statement. “This was good news for buyers as they were a little more likely to get a home without an intense bidding war.”

Another difference in the local market is that sales prices were essentially unchanged from a year ago in September 2020, with a median sales price of $595,000, while nationally prices continued to skyrocket, growing 13.3 percent over September 2020, according to the National Association of Realtors.

In Northern Virginia, homes remained on the market longer in September than last year, an average of 21 days versus 19 days in 2020. Conversely, on a national level, properties were on the market an average of 17 days in September, down from 21 days in September 2020.

Housing inventory grew nearly 15 percent in the Northern Virginia region in September. Nationally, housing inventory shrunk by 13 percent from one year ago.

“The local demand dip may be the result of a regional shift in attention from home buying to back-to-school and a return to in-person work,” McLaughlin said. “This region’s solid economic footing continues to support a healthy market for buyers and sellers.”

A lack of inventory was a key driver in the surge in Northern Virginia home prices earlier this year. A growing inventory in recent months means fewer bidding wars.

But home prices remain incredibly high in Northern Virginia compared to other parts of the state, making it hard for families to switch from renting to owning a home in the region.