Northern Virginia Real Estate Guide

Fairfax & Loudoun Q1, 2008 Market Updates

Our monthly charts are updated with January through March housing data for Northern Virginia (Fairfax, Loudoun). See Market Conditions under Topics. Additional detail can be found at:

Metropolotan Regional Information System (MRIS) and
Northern Virginia Association of REALTORS@reg; (NVAR)

Housing Market Law of Price Gravity
A stronger downward trend on average home prices started in September, 2007. In Loudoun, average price dropped 24% in 7 months and in Fairfax a corresponding 12% drop.

It's Spring, We Must Be Surging
The only surge I see of any significance is in inventory. New listings are out pacing new contracts by a 2:1 margin (New Listing Absorption Rate).

Since I no longer have access to the MLS, I am unable to provide any special data reporting.

We can gain insight by looking at averages but there are inherent issues with averaging. What we don't know is how the mix of properties sold is changing. This fact is a bit hard to get but from anecdotal observations we know that the higher end homes (above $800,000) are selling at a significantly slower rate than those less than $800,000.

For example, in March there were 13 homes sold in the over $800,000 category from an inventory of 459 properties, or 2.8% absorption. Now, in the markets heyday this price range was pretty healthy and had a definite impact on average price. The luster has rubbed off of these diamonds.

It would be interesting to see how many homes in this category are in foreclosure. Maybe more than we would expect. Those numbers are not even reflected here.

The housing market went up with irrational exuberance and now it must adjust. I have said all along ... "It would not surprise me to see a 25% drop in average price in Loudoun County." Well, I am not surprised.

Good to be back.

Where's Waldo (aka: Merv)?

Answer coming soon!

December 2007 Housing Market Update

All of our monthly charts are updated with December housing data for Northern Virginia (Fairfax, Loudoun and Prince William counties). See Market Conditions under Topics. Additional detail can be found at:

Metropolotan Regional Information System (MRIS) and
Northern Virginia Association of REALTORS@reg; (NVAR)

Trend lines were added to the Fairfax and Loudoun price charts showing downward direction from early 2005 to current. Loudoun shows a rate of decline of about $30,000 per year and Fairfax shows a corresponding declining rate of about $8,000 per year.

For example, from the December MRIS tables for Loudoun County we find the following:

Of the 328 mark as sold properties ...
Attached: 118 sold with 987 active or a 12% absorption rate
Detached: 168 sold with 1789 active or a 9% absorption rate
Condos/Rent: 42 sold with 436 active for a 10% absorption rate
... and then ...
High $ homes: 16 sold with 432 active for a 4% absorption rate (above $800,000)

From the same table we see that total average sold price is down 8% compared to 2006. What is interesting is that the high end townhouses (4+ bedrooms) are down almost 27% and the lower end single family homes (less than 3 bedrooms) are down 28%.

The "sweet spot" for TH resales appears to be evenly distributed in the $300,000 to $500,000 range while single family detached is evenly distributed in the $450,000 to $800,000 range. It appears buyers in the $400,000 to $500,000 are opting for the single family over a TH.

So, what does all this mean? The Loudoun market has definitely shifted out of McMansions. As financing jumbo loans get more difficult, builders lowering new home prices and a high number of "distressed sales" coming on the market this spring, downward pressure on prices for 2008 is anticipated. Is it a good time to buy? My answer is yes if you are buying for the long term and can weather the storm that is expected to last through 2009.

November Housing Market Data Updates

All of our monthly charts are updated with November housing data for Northern Virginia (Fairfax and Loudoun counties). See Market Conditions under Topics. Additional detail can be found at:

Metropolotan Regional Information System (MRIS) and
Northern Virginia Association of REALTORS@reg; (NVAR)

The last three months shows sold listings at its lowest level in the last 6 years. Although current average prices are in a seasonal downturn, Fairfax County prices appear to be relatively flat since the summer of 2005. Average prices in Loudoun County dropped about 7 to 8% from the summer of 2005 through the summer of 2006 but appear to be relatively flat since.

With all the news about foreclosure rates, especially in Loudoun County, it remains to be seen how these come back on the market early in 2008 and what price pressures will result. It is also unknown how the administration's recent deal with lenders to forestall more foreclosures will impact local market conditions going into 2008.

Fairfax Single Family Detached Home Prices

Even with the average price decline this month, Fairfax prices are holding up much better than the surrounding jurisdictions. Inventory is decling due to declining new listings not new contracts and sales. November year to year shows a modest 5.3% decline.prices have declined about 11.5% since January 2006.

Price trend chart showing Fairfax County Single Family, Detached, re-sale homes less than $1,000,000.

Hover on data points to view values. Chart rendering requires Flash 8.

Loudoun Single Family Detached Home Prices

November year over year price decline is approximately 12% with a 15% decline since January of 2006. Inventories remain high and demand has diminished considerably since the summer. We may not have all the foreclosures and bank owned properties reflected in the numbers. I suspect January will show another rapid rise in inventory as this hardship cases come back on the market. The gap is getting wider between Original List Price and Sold price which is typical during the late fall/winter months.

Price chart of Loudoun's single family, detached, re-sale homes less than $1,000,000.

Hover on data points to view values. Chart rendering requires JavaScript.

Loudoun County Price Trend
Single Family, Detached Homes less than $1,000,000

Up until the 2006 assessment, a general rule of thumb was that the assessed value was approximately 70 to 80% of the market value. You can see in the chart how that is changing. It is now running 100% +/- 5%. The Loudoun County Assessor just announced that assessments for 2007 will remain about flat because of 2006 declining sales prices. Also, the MLS does not update the assessed values from each county at the same time. We will keep a watchful eye on these trends.

Prince William Single Family Detached Home Prices

November shows a slowdown in price decline. Prince William is still struggling with about a 17 to 18 month supply of inventory on hand compared to 11 months for Loudoun and a bit over 9 months for Fairfax. November year over year shows a price decline of nearly 14% and a 21% drop from January 2006. I have said all along that a 25% drop would not surprise me. So, breathtaking but not surprising. Prince William was heavily over built and over invested.

Price trend chart showing Prince William County single family, detached, re-sale homes less than $1,000,000.

Hover on data points to view values. Chart rendering requires Flash 8.

1983 - 2007

Sean Taylor
You will be missed!

by a Redskin fan

Loudoun and Fairfax County Monthly Charts

All of the monthly charts were updated this morning with October data for Loudoun and Fairfax counties. Check the list of charts under the Market Conditions topic.

The public accessible tables can be found on the MRIS Reports and Statistics Website pages. The October NVAR Market Reports are also available.

Social networks emerging in a community near you

To declare that social media is exploding in our society is an understatement. The Washington Post published an article yesterday in the Business section about the many "start ups" that have emerged in the DC area seeking to take advantage of the new social media frenzy. Here's an excerpt:

Web's New Field of Dreams Emerges in D.C.
New Internet Companies Piggyback on Popularity of Social Networking
By Zachary A. Goldfarb
Washington Post Staff Writer
Monday, November 5, 2007; Page D01

The wave of social networking and interactive content companies that has washed over Silicon Valley, promising to upend Internet business models, has reached the Washington area.

A modest community of about a dozen such companies, with names like Mixx, Searchles and Qloud, has emerged in the region in recent months. These start-ups hope to build on the success of YouTube, MySpace, Facebook and other interactive media sites by creating applications that piggyback on -- or replicate -- the goliaths.

The rest of the story...

One such venture not mentioned is Modern Mom launched in October by Hulya Aksu. Ms. Aksu served in many leadership roles of businesses catering to women including CNN International as a writer and producer.

Modern Mom is a combination of web social media and a print magazine focused entirely on catering to Moms, from health, children, home, and lifestyle to fashion, food and just plain Mom fun. Modern Mom is initially focused on Loudoun County and hopes to capture 20,000 Moms as loyal readers and social participants. Hulya discovered there was a void of anything catering to moms and has put the infrastructure in place to build a community of connected moms contributing to the lifestyles they share. Modern Mom is complete with "Blogs Du Jour, Modern ChitChat, Sisterhood News" and much more. This is social media at a very local level.

Think globally, act locally

Another social media site recently launched is @Home in Raspberry Falls. Raspberry is a local Loudoun County community developed by Van Metre Homes and its Marquis Custom Home division and is set in the midst of the acclaimed Raspberry Falls Golf and Hunt Club. The new site is sponsored by the community HOA and features a public portal with community news and information as well as a private section for Residents Only to share important information of common interest. This may well be one of the first HOA community sites completely based on Blogging infrastructure.

The old media is static and is designed to push information to its audience. The new media is about audience participation. In both examples above, content is created and shared by its participants. A successful global capability brought to a very local level.

PS: Yours truly developed the @Home in Raspberry Falls site.

Monthly Charts Updated with September Data

The monthly charts (Fairfax and Loudoun) are updated today with September MLS data (look for the charts under Topics-->>Market Conditions). There is no good news with one exception: Loudoun average price actually increased 5% over August. Go figure...in fact, Fairfax average price took a big drop. Both Fairfax and Loudoun are showing total sales significantly down from last month. September is generally a slow month. Keep watching.

History does not necessarily repeat itself. What is interesting is that the inventory is remaining constant as opposed to last year at this time when it started a steep decline into the winter months. The decline last year was primarily do to withdrawals from the market. Although withdrawals are up, they are not as high as last year. You can see these trends on the Daily Market Watch (now called Weekly). Check out the links on the Front Page top-center.

It has been a long dry summer in the DC metro area. Looks like the real estate draught continues into the winter and beyond. I am now thinking we need to dissipate the short sale and foreclosure inventory before we see any turn around at all. Odd...last year at this time I was saying the same thing about investor dumping.

It is still a good time to be a buyer.

The joys of satisfied real estate clients

Here's a note I received from a recent listing client that settled on their sale October 1st:

Dear Merv,
Many thanks for a job well done! From taking and editing excellent photos, creating an appealing virtual tour, maximizing the places our listing could be seen, through the negotiations, you made a significant difference in selling our house.

We were expecting to lose money, but are glad that didn't happen. It is a paradox to think that an average Realtor would have not even sold it yet, but would collect several thousand more when the house finally did sell. Your visionary sales/consulting model is a "win-win" for all of us.

Finally, the quick sale will most importantly allow us to be a family again - with Dad home at night and Mom keeping her sanity! For that we are most grateful.

Please accept a bottle of my favorite wine ever - I brought 4 boxes back from Germany and want you to have one as a token of our appreciation for your hard and smart work.

With gratitude,
The Davison family - Erin, Mark, John and Eleanor

To the Davison family: it was my pleasure serving you...

NOVA Single Family Homes Price Trends

September is showing a continued downturn in price trends for single family, detached homes under $1,000,000 in the three largest counties in Northern Virginia. Interesting to note is Prince William sales are significantly lower than assessed value while Loudoun and Fairfax are selling at about assessed value (this is indicative of the significant softness in Prince William). What we don't know is the contribution of short sales and bank owned properties to this data. My anecdotal experience working with a current buyer is about half the homes that match our criteria (less than $425,000) are tagged as short sale or third party approval.

Instead of embedding all three charts, here are snapshots of the charts and links to the real ones:

From left to right:
FAIRFAX COUNTY | PRINCE WILLIAM COUNTY | LOUDOUN COUNTY

(Note: Embedding the Fusion Charts considerably slows the page load. Click on the chart images above for a large view.)

Market Watch Weekly? Your opinion counts!

After over a year of collecting daily market data and applying them to the table and charts, I came to the conclusion since nothing moves very fast that a weekly sample is just as good and consumes less of my time. Below are samples of the current daily Fairfax Listing Activity followed by the weekly Fairfax Listing Activity covering the same period of time. The weekly samples would be made each Monday morning to ensure we pick up sales activity posted over the weekend.

Another reason for changing to weekly is that with four charts on a page and over 400 data points and counting, they are taking forever to load off the server. I don't necessarily want to cut off the history because it gives a better perspective of what is happening now.

Your opinion is important. Tell me what you think by posting a comment.

Note: Gaps were filled in on the weekly chart by extrapolating between know data values.

Fairfax Single Family Trends | August Update

The chart showing Fairfax Single Family homes less than $1,000,000 is updated with August data. Fairfax prices seem to be holding up better than its sister counties, Loudoun and Prince William. Prices remain relatively flat month to month but, the gap between "original list price" and "net sold price" is getting wider and is close to 7%. Homes are selling for about 2.5% above average assessed value.

The daily market watch is showing a significant decline in "contract list price" that is a leading indicator of where prices are headed (see related article).