What’s Going to Happen With Home Prices This Year in Fairfax VA?
Compared to other communities close to Washington D.C., the Fairfax VA real estate market started off the year fairly slow. Last month, home sales in Fairfax County totaled 817, a drop of 19 percent from January of last year, according to MarketStats by ShowingTime. That said, this is a great time to buy a home.
Demand for Fairfax VA homes has outpaced that of towns closer to Washington D.C.
Northern Virginia has a hot real estate market. The number of homes for sale there is only 555, compared to 1,217 at the same time last year. Because of this, the market is very seller friendly, with prices on average 7% higher than the same period last year. Recent buyers report that the local housing market was extremely competitive and it was difficult to buy a home. They attended an open house with a long line of prospective buyers.
Millennials represent the majority of the population, which is the prime age for homeownership and household formation. The aging of the baby boomers and incoming millennials has pushed rents higher. However, this trend is slowly changing, with Fairfax VA homes outpacing the demand in other towns closer to the D.C. metro area. Millennials are becoming the largest segment of the housing market, and are the primary driving force for this trend.
Inventory is at a low level
As a buyer, you may be asking yourself: "Why is inventory at a low level in Fairfax VA?" The answer lies in the amount of land available and the city's large population. Fairfax County, which includes the cities of Alexandria and Falls Church, has an inventory of around two months. However, the city's inventory actually rose in March, as the number of homes for sale increased by 17.9 percent year over year.
According to the Northern Virginia Association of Realtors, inventory is low in both Arlington and Fairfax counties, where the number of pending contracts is higher than new listings. For the Northern Virginia region, this means a return to normalcy. While the market is still hot, a sense of normalcy may be in the air in Fairfax and Arlington. And with a few more months of inventory, the market is poised to bounce back.
Interest rates will rise in 2022
There are some factors to consider when deciding whether to purchase a home in Fairfax, VA. First, the housing market in Northern Virginia is currently in a good state, but a few hikes in interest rates are not likely to significantly change that picture. The demand for homes in "farther out" areas of Northern VA is outpacing the demand in cities and towns in DC. These trends are expected to continue into 2021, when interest rates will return to a normal level.
Moreover, rising mortgage rates will make the market too expensive for many buyers by 2022. According to NAR's senior economist Nadia Evangelou, the 30-year fixed-rate mortgage will average 4.5% in 2022. This increase is expected to affect larger loans the most. For most buyers, the difference in mortgage payments will be less than $100 per month, while higher-priced markets could see an increase of $200 per month.
Buying a home is a great time to step into the market
A hot spot for business and family life, Fairfax VA is the perfect place to buy a home. Local schools provide a quality workforce that supports the local business community. With its thriving arts and culture scene, there are plenty of opportunities for work and leisure. With a growing population and a hot real estate market, Fairfax may be the best suburb in the country to buy a home.
There are 393 homes on the market in Fairfax, VA, of which 89 were listed within the last week. Of these homes, 504 are available for rent. With the population growing, the residential real estate market has grown to accommodate the increased demand. And because the area is so livable, home values have skyrocketed. For this reason, buying a home in Fairfax VA is a good investment for the future.
