Good News/Bad News: Real Estate Rebound Slows Some But Sales Numbers, Employment Numbers Trend Favorably, Equity on the Rise
Northern Virginia Housing Market ‘Should Be Fine’
Fairfax, VA – July 12, 2013 – (RealEstateRama) — To keep the economy improving, so must the housing recovery improve. While conditions have been great for home buying, there are signs that the time to wait may be over. Appreciation is on the rise, but so are interest rates. How does that affect loan activity and home sale prospects in our region?
Jon Wolford, NVAR Chairman of the Board, notes that in spite of the interest rate uptick, the June housing data points toward continued growth. “Sales figures are strong in spite of increasing interest rates and sequestration, and we remain optimistic for late summer and early fall Northern Virginia sales,” Wolford said.
Northern Virginia is especially vulnerable to the government spending reductions due to the number of government and defense contract workers who reside and work here. The strong Northern Virginia housing sales activity is offsetting some impacts from sequestration.
“Inventory recently began a climb as more homeowners are able to use their equity to buy their next home,” Wolford said. “Investors have begun to buy, hold and rent property to take advantage of long-term appreciation.”
The recent spike in mortgage rates has affected loan applications. A 50 percent decline in refinance mortgage applications resulted from the greater than one percentage point increase in mortgage rates from the past two months, explained Dr. Michael Fratantoni, vice president of research and economics at the Mortgage Bankers Association.
“That is the largest economic impact from rising rates thus far,” he said. “So long as the rising rates are reflecting a stronger economy, and they are to this point, I don’t expect there will be much of a negative impact on the purchase market. A stronger economy means higher incomes which improves affordability. The growth is also likely to lead the Fed to pull back at some point, but the market is already pricing that in to a large extent.
“If instead rising rates are reflecting increasing inflation, that would be negative for the market, said Fratantoni. “My shorthand has been that if rates spike up over 5 percent in the near term, that would likely be indicating fears of inflation rather than signs of growth, and we would have a problem. Less than that, the purchase market should be just fine.”
The other positive is that the job market report for June showed almost a 200,000 gain in employment, with evidence that people who had given up are beginning to return to the labor force, Fratantoni explained. Data for prior months was revised upward, which is the most important driver for the purchase market, he noted.
NVAR June data show numbers pointing toward a 14 percent increase in sales compared to last year. A nearly 6 percent increase in the average sales price, a 5 ½ percent increase in the median sales price, and the year-to-date average sales price of more than 8 percent above the 2012 YTD average are excellent. This ‘cup’ is trending at ‘more than half full.’
June 2013 Regional Home Sales: Northern Virginia
The Northern Virginia Association of Realtors® reports on June 2013 home sales activity for Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton.
A total of 2,496 homes sold in June 2013, a 14.02 percent increase above June 2012 home sales of 2,189.
Active listings decreased by 15.62 percent from last year, with 3,247 active listings in June, compared with 3,848 homes available in June 2012. The average days on market (DOM) for homes in June 2013 decreased by about 43 percent to just 24 days, compared with 42 days in June 2012.
Prices rose this past June, with the average sales price up by 5.83 percent to $563,223, compared to last June’s average of $532,219.
The median price of June homes sold in Northern Virginia rose by 7.51 percent to $499,900, compared with June 2012’s median price of $465,000.
The number of new pending home sales in Northern Virginia in June increased by 13.19 percent to 2,265 compared with 2,001 new contracts pending in June last year.
June 2013 NVAR statistics can be found here:
http://go.nvar.com/June2013Stats
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The Northern Virginia Association of REALTORS® serves as The Voice For Real Estate in Northern Virginia and provides a variety of services to its members including educational opportunities, professional standards enforcement, market statistics, legislative reviews, issues lobbying, multiple listing and lockbox services, and more.
The purpose of NVAR is to enhance the ability and opportunity of its members to conduct their business successfully, to promote member professional competency, to maintain members’ adherence to the REALTOR® Code of Ethics and to promote the preservation of the right to own, transfer and use real property.
NVAR has grown to about 10,000 REALTORS® who carry out an $11 billion real estate industry in a community of more than 2 million residents.
Visit NVAR online at www.nvar.com, www.realtorschool.com, and www.realtorshop.com.
Contact the Northern Virginia Association of REALTORS® at 703.207.3200.
The NVAR headquarters is located at 8407 Pennell Street, Fairfax, VA 22031, with a satellite service center in Herndon.
Contacts:
Jill M. Landsman, Vice President, Communications & Media Relations
703.207.3226 or jlandsman (at) nvar (dot) com
Ann Gutkin, Manager, Communications & Media Relations
703.207.3216 or agutkin (at) nvar (dot) com
