March 26, 2020 | Josh Sullivan
February was an incredibly active month for the DC Metro area market – coming off the heels of an already unusually hot start to the year in January. A record-breaking number of sales and continually rising sales price has kicked off this year’s Spring market a little early; a sight for sore eyes. Median sales price for the month grew 8% YoY reaching $460,000, while 3,224 homes were sold, setting a decade-high record for the month of February. In addition to strong sales performance and price appreciation, the DC Metro area continued to move quickly, with listings averaging 13 days on the market. For Arlington and Fairfax County, it was even lower, both averaging a mere 7 days on the market for actively listed properties.
Buyers made quite a splash in the District in February, closing on 626 homes for the month, a 24% increase YoY. While sales skyrocketed, supply and sales price remained virtually unchanged from this time last year, indicating record-low interest rates are incentivizing buyers, who were previously uncertain, to purchase a home affordably and confidently. An influx of new construction supply was able to bolster sales among condominium and townhome products in DC proper, each growing 25% and 37% YoY respectively. Due to low supply and virtually no new construction among detached homes, sales decreased 6% within the city.
Arlington County, VA
Though the overall market’s performance was unique for this time of year, trends within Arlington County continue to remain consistent. Median sales price experienced significant appreciation of over 12% to reach $635,000 last month, with closings trending in the opposite direction, down over 10%. Tight inventory has plagued buyers in Arlington in recent months, creating fierce competition among the ever-present demand for homeownership within the County. Stories of waved inspections, no contingencies, and bidding wars continue to be a harsh reality for Arlington buyers – pushing home values higher and higher each month.
Fairfax County, VA
Fairfax also received a boon in activity during the month of February – both median sales price and home sales reached record-breaking levels for the County. Over 850 homes closed last month, with detached SFRs and townhomes being the favored product type. Sales among condominium units dropped almost 7% YoY with only 168 closings for the entire County. Sellers were pleased to see an increase in inventory had no effect on their sales price, reaching an even $560,000 for February, an improvement of 14% YoY.
Though inventory throughout the region has improved slightly as of late, the market continues to be undersupplied, resulting in the above-mentioned bidding wars and dip in closings for markets like Arlington County. We expect this constrained supply to be alleviated by an incoming wave of new construction deliveries throughout the remainder of 2020. Jurisdictions such as Arlington County, who have historically made it difficult for developers to entitle and approve new projects, are now being more receptive to the housing needs of their jurisdictions. In turn, this will provide a number of new homes at various price-points that will combat the significant housing shortage in our region.
It appears as though Spring has truly sprung for the DC Metro area real estate market.