The Northern Virginia property market is expected to continue selling and rising prices through 2021 despite a number of potential headwinds.
The Northern Virginia Association of Realtors (NVAR) and the Center for Regional Analysis at George Mason University released their market forecast for 2021 on March 25th, predicting continued growth in most of Northern Virginia countries.
“Home buyers and sellers look at the real estate market from different perspectives, but with one common question: where is the market headed in this region?” Notes Derrick Swaak, Partner and Managing Broker at TTR Sotheby’s International Realty in McLean and NVAR President 2021 .
A corps of key experts from various sectors of the real estate industry has been convened to review the preliminary projections developed by GMU-CRA economists and to provide their insights into current and near-market conditions.
“This year’s forecast was particularly challenging as the pandemic and related disruptions showed highly unusual patterns of market activity,” admitted Terry Clower, director of the Center for Regional Analysis.
The forecast team focused on such factors as federal monetary policy, the direction of mortgage rates, changes in public health conditions, and the likelihood or non-likelihood of ongoing options for working from home.
“The impact of the pandemic, the shape of our post-pandemic economic recovery, and the long-term impact of working from home conditions will shape residential real estate markets for years to come. Still in the collective judgment of [the analysts]This should be a strong year for brokers and their clients, ”said Ryan McLaughlin, CEO of NVAR.
And what do they see with crystal balls? The general consensus by jurisdiction:
FAIRFAX COUNTY: The persistently high demand is likely to drive prices up through tenders. The median sale price at the end of December is expected to be $ 593,979. Prices are expected to peak at $ 644,991 in June. Price growth of 4.2 percent compared to the previous year is forecast for the end of December. Demand-driven price increases could be even higher, but overall affordability and the chance of rising mortgage rates should keep price increases within the forecast range.
The spring and summer markets will rebound assuming available inventory, resulting in a positive year for sales growth. Total annual revenue crosses the 18,000 mark to 18,192, an 11.1 percent increase over 2020, which turned out to be a good year for residential property sales despite the pandemic. The peak of the activity is expected in summer.
This positive outlook will depend entirely on the sellers. If sellers are reluctant to enter the market due to limited options to move up or down, sales will fall below expectations.
ARLINGTON COUNTY: In Arlington, steady year-over-year price increases are expected. The average retail price in December is $ 683,761. The maximum selling price is forecast at $ 719,577 in July. A price increase of 9.4 percent compared to the previous year is expected, which reflects the strong demand for single-family homes.
Partly due to ongoing shifts in demand in connection with working from home, considerable increases in sales compared to the previous year are forecast. Annual sales are expected to increase by 14.1 percent to 3,126 units by the end of the year. Sales are expected to peak in July at 291.
The comparatively high inventory levels are expected to persist for most of this year as market preferences shift in a year that is still marked by pandemic conditions. The sum of end-of-month inventories will be 33.6 percent higher in 2021 compared to 2020, but will still be below long-term trends. Those looking to sell will continue to see strong interest from buyers looking to a strong local job market beyond the pandemic.
ALEXANDRIA: The median sales prices in Alexandria will continue to rise, although the forecast shows price volatility. Due to notable jumps in the condominium stock last fall, a slight market equilibrium is expected, which can offset very strong price gains in recent years. The Alexandria market is likely to stay ahead by the end of the year, with prices rising in December 2021 reflecting a 2.9 percent increase.
The total number of annual units sold is projected to reach 2,824 in 2021, up from 2,691 in 2020, a notable increase of 4.9 percent. Late spring through midsummer will be stable, if not booming.
The shift in demand dynamics for apartment buildings will increase inventory levels by 24 percent, but will remain well below long-term trends. The full report can be found at NVAR.com/2021forecast.
[Sun Gazette Newspapers provides content to, but otherwise is unaffiliated with, InsideNoVa or Rappahannock Media LLC.]