A recent report shows the City of Falls Church’s home sales dropped precipitously over the past year. But local purveyors and observers of the market are pushing back against the definitive nature of the report’s findings.
Conducted by Chicago-based real estate analytics firm ShowingTime using its Market Watch tool, the figures show that Fairfax County and the City of Alexandria saw slight bumps in their sales while Arlington County, the City of Fairfax and the Little City itself all witnessed declines. The drops were mostly modest in surrounding jurisdictions, but Falls Church sank the lowest with a 33 percent decline from February 2018 to February 2019.
Coupled with an increase in inventory — which outside of Washington, D.C., the City was the only other municipality to experience that, according to the report — and a rise in assessments, Falls Church appeared to be getting more expensive while also witnessing a weakening market that was struggling to move properties. For a locality that banks on real estate taxes to help fund its quality of life, the news could easily be seen as troubling.
But according to some who track the City’s real estate market, such as Falls Church City assessor Ryan Davis, he doesn’t believe the numbers are as declarative of the local market’s health as they purport to be.
“It depends on sample size, because we have so few sales in the City, it could just be that sales got pushed back or moved forward,” Davis said, explaining that sellers try to time their sales in order to avoid making another mortgage payment. “If you get a couple of people to move it in a month it can cause percentage difference to look big. At roughly 200 sales per year, so about 18 a month, for it to go down 33 percent that’s six sales. I could very easily see six sales being moved up because people wanted to miss that mortgage payment.”
Using Bright MLS data, which ShowingTime also extrapolated its conclusions from, Davis checked the patterns himself. He noted that while sales were down 10 percent overall from 2017 (222) to 2018 (201), when comparing the January and February sales of 2018 (11) to 2019 (15) there was a marginal increase in year-over-year activity, contrasting ShowingTime’s findings.
Better Homes & Gardens real estate agent Heather Embrey has an office located on N. Washington Street and does a fair bit of business in the City. To her, the problem could lie in the varying databases that agents, analytics firms and regional real estate groups, such as the Northern Virginia Association of Realtors (NVAR), use.
She brings up her own experience of switching over from an MRIS system to Bright MLS and the confusion that caused. Embrey specifically notes how her former system only had a few statuses that could be assigned to a property — such as active, contingent, non-contingent and sold. With some new designations that Bright adds, for example “pending” and “under contract,” it can skew the data to give different impressions of the market.
“I sit on the board of directors for our local association, and it’s been a huge problem for us because we don’t know how long it’ll take for it to level out when it merges to a bigger system,” Embrey said. “ShowingTime is pulling data directly from Bright and Bright is not accurate because of the conversion and changes that come with it. You can’t just pull these 30,000-foot views on zip codes now, you have to do hyper local.”
Ava Nguyen of Westgate Realty Group, Inc. in Pimmit Hills, on the other hand, did agree with data. Nguyen brought up the steady wave of Amazon HQ2 workers coming to the area who are favoring more affordable locales that are closer to the Crystal City site, such as Alexandria. Nguyen also discussed how the seasonal effect on home sales was more pronounced this year as opposed to last. A snowier winter this year made home showings less possible for real estate agents, who either arrange for or shovel out driveways themselves to get the properties ready.
A representative from ShowingTime informed the News-Press that it stands behind its numbers.
The company’s policy, according to this representative, is to crunch the sales numbers, provide them to members of Bright and members of local boards — in this case, NVAR — and give the local boards the tools to share the data with their clients. When it comes to interpreting or commenting on the data, ShowingTime believes it is best to leave that up to individual members of a local board, as this representative acknowledges that regional trends may vary from local trends.
One area that local realtors were united on was the price point in the City still continues to box out potential buyers. Nguyen noted that the $1.5 – $1.7 million range that new homes are listed at in the City often prevent first time home buyers from seriously considering living in Falls Church. Embrey echoed that sentiment, and mentioned her experience with a potential buyer who put a bid on a home and even had its escalation addendum kick in, but the buyer decided to move to North Arlington instead where the home price and real estate taxes were more manageable. That’s why City homes that hover around the $800,000 range will often be snatched within days, according to Nguyen, especially with mortgage interest rates dropping to around 4.1 percent, per Davis.
Although Embrey did point to two possible factors that could be dissuading buyers from residing within City limits.
One was the GreatSchools ratings for Falls Church City Public Schools, which recently dropped from its usual perch as highly ranked 10s or 9s down to 8s (in George Mason High School and Mary Ellen Henderson Middle School) and a 6 (in Thomas Jefferson Elementary School). Though Embrey said that GreatSchools ratings often frustrate real estate agents, who don’t understand the algorithm used to determine its scores that paint an unduly negative picture of a school system and buying area.
Another factor is traffic. Anecdotally, Embrey has said potential buyers have expressed their concern about congestion in the City, and the propensity for people to use side streets such as Park Ave. and Lee St. as cut-throughs. But Nguyen feels that the traffic is just a by-product of the area’s high demand and that it’s accounted for in buying decisions, while the school system’s strong reputation remains a selling point.
But overall, the City’s market remains in good health. Davis addresses this by noting the median ask-to-sold price is 99.1 percent, with the median ask-to-current list price being 100 percent.
To him, he would only be concerned if sales prices were dropping. Davis believes that if inventory or sales are low, it’s more an indication that people don’t want to leave the City.