The housing market in the D.C. area has stayed strong of late, despite the usual lull of fall, and Northern Virginia is no exception. It is booming.
The region covered by the Northern Virginia Association of Realtors (NVAR) includes Fairfax and Arlington counties, the cities of Fairfax, Alexandria and Falls Church, and the towns of Herndon, Clifton, and Vienna. These areas have shown no signs of slowing, reporting record October sales, the likes of which have not seen since 2004 — with every NVAR jurisdiction showing an increase in the volume of real estate sold during the month of October, bar none.
“Realtors in the NVAR region sold nearly $1.5 billion dollars in real estate for the second month running in October, a 42.53% increase over October 2019,” says Nicholas Lagos, 2020 President of the Northern Virginia Association of Realtors.
Outperforming many prior years of the fall market, these figures are reflecting significant demand from both buyers and sellers, despite the onset of pandemic conditions and the increasing strain on the landlord-tenant relationship.
“Buyers and sellers have been resourceful in working out ways with their Realtors to continue to function in a safe and efficient manner during the pandemic,” says Christine Richardson, past president of NVAR. “Wearing masks, shoe covers, and gloves while limiting the number of people viewing a property at a given time is working to limit the risk of exposure for everyone involved.”
This market has shown no signs of being held back by pandemic conditions. Sale price averages are up 11%, while the average number of days on the market has dropped by 29% - providing exceptional conditions for home sellers.
But there is good news for buyers, too. Record low-interest rates for a 30-year mortgage are down a percent from one year ago, and currently hovering around just 2.84%. And, as Realtor Darren Robertson of Northern Virginia Home Pro states, if you’re shopping for real estate in the Northern Virginia area, ‘you have a lot of choices.’
The Amazon link
Is it any wonder that the DMV region has continued to enjoy such unprecedented growth since global giant Amazon’s announcement to build its headquarters in the heart of Northern Virginia?
Home prices in Northern Virginia rose 21% after Amazon’s announcement in late 2018, and according to Realtor.com, by October 2019 the median listing price in Arlington County was $863,000, up 33% year-over-year. Conversely, the median sales price in Manhattan - Amazon’s second new HQ location announcement — dropped 15% in that same period, following the news that Amazon had pulled out of the Manhattan Project.
Amazon’s first Arlington office opened its doors in June 2019, with approximately 1600 employees anticipated to be working at the headquarters by the end of 2020 and a commitment to employing 25,000 staff over the next decade.
“Access to talent was one of the key factors in our search for a second headquarters — and we are very happy with the caliber of the talent we’ve been able to hire in Arlington and the DMV region,” said Brian Huseman, Amazon’s vice president of public policy. “We look forward to continuing to develop Virginia as a tech and innovation hub over the next decade.”
But whilst this surge in market activity has brought with it many benefits, the frenzied desire to capitalize on the Amazon-boosting wave to the local economy has driven up the cost of local housing at an alarming rate.
Local Realtor Darren Robertson said he has certainly seen an increase in the median price for the Heatherlea condos in Arlington as well as other “hot homes” in the area, which are being snapped up by savvy investors: “Since Amazon’s announcement, the median price in Arlington alone has soared 17.3%, with the national median price list increasing just 5.5% over the same period.”
A looming affordability crisis?
Amazon has responded to the looming affordability crisis by pledging $3 million to the Arlington Community Foundation in Virginia to “increase access to affordable housing for low-income families and veterans.” They have also announced that as part of their commitment to the sustainability of the area’s growth, they will ensure that their operation’s growth is gradual and will keep local officials informed of their plans so that they, in turn, can plan accordingly.
Market analysis suggests that this increase in listings is not the result of investors turning profits on previously sought Amazon HQ2 properties — only 10% of Arlington homes listed between June 2020 and October 2020 were purchased after Amazon’s big development announcement.
Nevertheless, the NVAR has predicted a slight slowing to this pace of sales in the next couple of months, with new listings continuing to flood the market.
“This is particularly true in the upper end of the market for single-family homes over $2 million and condos priced above $1 million, where inventory has entered a more balanced, or possibly even buyer’s market,” said Derrick Swaak, 2020 NVAR president-elect.
This shift may present a prime opportunity for buyers who may have been patiently waiting out the extreme competition of the last couple of years — and with an increase in lower-priced condos now coming to market to the appeal of first-time buyers, as well as the pull of employer-titan Amazon firmly established, the real estate market of Northern Virginia will remain strong for some time to come.