The Northern Virginia market and, particularly, Falls Church, continue to remain among the stablest and most healthy markets in the region heading into 2019.
The 2018 data released by the Northern Virginia Association of Realtors shows that the area continues to be a sellers’ market with a tightening up of available inventory. It is possible, however, that new developments opening up could turn the tide to the buyer.
With the proximity to Washington D.C., the quality of the school system and the closeness of Metro, Falls Church has long been a steady market. The City is listed by Multiple Listing Service data as having a median home price of $535,000, which is comparable to Arlington ($551,000) and Fairfax ($498,000) counties, respectively. The region on the whole however, saw relatively little change in the market with just 0.41 percent in the average sold price of a home between 2017 and 2018 although the City of Falls Church saw home prices rise 3.5 percent. “Arlington and Falls Church are always the last to fall [in a housing crisis] and the first to recover,” said NVAR President Christine Richardson.
On the other hand, massive spikes in growth are obstructed by the fact that there’s no new land to develop (as opposed to the farther reaches of Fairfax County) according to Richardson.
The trend of lessening inventory is consistent across the region as the number of available listings from December of 2017 to December of 2018 dropped by 20.02 percent. Additionally, the average sale price to the original list price ratio has remained steady at 97.8 percent in 2017 to 98.2 percent in 2018 for Northern Virginia.
“If the price is close to asking price, that means the sellers are naming their price and can reasonably expect to get it,” said Francisco Alex Escobar, a real estate agent with Samson Properties. “But I’d say that the market is probably a cooler sellers market. We’ll see what happens in the spring. Remember this is a seasonal industry, too.”
Local real estate agent Tori McKinney of Rock Star Realty cautioned that it’s an oversimplification that the inventory is fixed in Falls Church.
“There’s not much width but there’s always elevation,” she said.
McKinney pointed out that recent developments such as Northgate, The Lincoln and West Broad apartments along with upcoming mixed-use developments near George Mason High School and the Applebee’s lot should help to open up space. Additionally, there have been three condominiums; Broadway of Falls Church, The Spectrum and The Byron have already been built.
“More inventory opening up gives more selection to the buyer,” added McKinney.
John French of Access National Mortgage believes that ordinarily a condominium is like a “drop in the bucket” but for a small community of the size of Falls Church, the opening of three new condominiums could make a dent in the resale market.
“In a small microcosm of 12,000, your impact will be felt, but mostly in the condominium market,” French said. “The increase in available units creates competition for buyers, especially with the owners of resale units, as the pool of people who would otherwise buy those resale units is being diminished.”
McKinney believes these new developments improve surrounding values and also add more tax dollars for Falls Church
Another factor that could be squeezing inventory and selling homes quicker is that behind conventional mortgages, the second most popular form of purchasing a home is to pay with cash. Of the 22,094 properties sold this past year, 2,815 or 12.7 percent were paid for with cash.
Richardson explains that people purchasing with cash could be home buyers from overseas because they likely won’t be able to show banks they have a credit history or mortgage.
But it is more likely that these are investors who can afford larger economies of scale in their operations.
“This makes it more difficult for a first-time buyer to compete with an investor as $300,000 – $500,000 properties are the sweet spot for both buyers and investors,” said Richardson.
