Average prices of single-family houses in Arlington are expected to jump by more than 9 percent, with the county’s decision to allow some to be converted into multifamily housing, a mid-year report by the Northern Virginia Association of Realtors finds.
“The recent announcement by Arlington that single-family homes in some areas can be converted to multifamily may spark a surge of investor activity that will drive up home prices for those units that are on the market. We see average prices over the year increasing by 9.2% for single-family homes in Arlington,” according to the report, done in conjunction with the Center for Regional Analysis at George Mason University.
The Arlington single-family housing market, the report said, is “proving very resilient,” despite higher interest rates on mortgages and inflation.
The overall Northern Virginia housing market is, as expected, seeing higher interest rates impact buyers and sellers. “Pricing is still relatively strong, but a lack of inventory has dropped the number of units sold by around 20 percent across Northern Virginia,” the report said.
The number of overall sales across Northern Virginia in 2023 is expected to decline 10 to 15 percent, compared with 2022.
The report said that it is expected that overall prices will rise 1 to 2 percent across the region. “Well-priced units will still sell quickly at or near the original list price,” the report said.
But, Fairfax County’s single-family home market will effectively see flat prices in 2023, with total sales down 10 percent and inventory (the number of active properties on the market) dropping 13 percent.
Alexandria’s single-family home sales will be “mostly flat at the end of 2023 on a month-over-year basis, with a modest annual increase of about 1.6 percent. In a sliver of good news for Realtors, forecast trends suggest that total unit sales in this market segment will buck regional trends by rising 5.4 percent, though that only reflects a gain of 19 more homes sold for the year in the small market.”
Town house sales in Alexandria and Arlington are expected to remain flat for 2023 because of tight inventories.
“The forecast team expects inventory losses of 22 percent on average in townhomes located in Fairfax County, mostly related to existing owners staying put. This will drop total unit sales by 15 percent on an annual basis but will support pricing stability with a small expected increase in median prices of 0.4 percent,” the report said.
Condo sales in Fairfax County will see the average price rise 4.3 percent, while the number of sales decreases by 23 percent for the year.
“The original forecast expected some improvement in Fairfax condo inventories, but the data through April performed lower than expected, and we have revised the forecast to show an average drop in inventories for this market segment of almost 50 percent for the year. We hope to be proven wrong, but the downward trend line compels a relatively negative outlook,” the report said.
Arlington’s condo market saw a lot of properties go on the market during the pandemic. Now, owners are keeping their properties because there isn’t inventory for them to buy and mortgage rates are now longer really low. “Paradoxically, we see little change in the average housing prices for the year, which is reflective of market trends since the start of the pandemic,” the report said about Arlington condo sales.
The price of condos in Alexandria is projected to increase 8 percent, but they will see a “pullback” from their recent price spikes in the second half of the year. “Inventories will return to levels slightly above pre-pandemic norms, an almost 20 percent drop compared to 2022, which will impact total unit sales, which will decline by almost 17 percent,” the report said about Alexandria condo sales.
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