It only took about ten days for the Falls Church housing market to spring back from its Covid-19 winter lull, though the lack of mid-tier homes available has revealed a year-over-year decrease in sales price.
That’s the time Thai Hung Nguyen, Falls Church veteran agent and Better Homes and Garden broker, estimates the market paused after Governor Ralph Northam called for a shutdown and people stayed home.
“Buyers took a step back. Sellers took their properties off the market, but near the end of March, we started to receive inquiries.” Since then, the pace has only quickened.
Another longtime Falls Church and Northern Virginia agent, Jeff Wu with Keller Williams Capital Properties, said, “After they stopped binging on Netflix, people went to Zillow and other places on the Internet and started looking.”
The two agents said vacant homes sold fastest because no one had to worry about germs too much, and those homes were move-in ready.
Most industry specialists predict the “spring thaw” will continue well into next year and maybe beyond.
Chris Finnegan is the chief marketing and communications officer for Bright Multiple Listing Service and its 95,000 real estate professionals in the Mid-Atlantic region.
He said, “Falls Church is the really hot area benefitting from the halo effect” of Amazon’s move to Northern Virginia.
Combine Amazon with the federal government and its relative insulation from Covid-19’s economic effects in “a market that’s on fire to begin with” and you get “Northern Virginia, one of the hottest and widely examined markets in the U.S. — and this is not hyperbole,” Finnegan said.
Lisa Sturtevant, the chief economist for Virginia Realtors, said that in addition to Falls Church’s attractiveness, other prime reasons for the area’s continuing momentum was the commonwealth’s strong housing market before coronavirus.
“Some markets were already seeing a slowdown. Our peak occurred later and more slowly.”
Plus, Virginia was better prepared than the northeastern U.S., particularly New York City. “A lot was in place to help mitigate some of the slowdown,” including the governor’s stay-at-home order.
“Northern Virginia and Falls Church did dip a little bit more than the U.S. and Virginia statewide,” but that was mainly because “there was nothing to buy.”
A smaller inventory helps explain why spring and summer prices in Falls Church fell below last year’s, explained Nguyen. Because there was little available in the $700,000 to $900,000 range this year, cheaper townhomes and condos which sell faster brought down averages.
“We had a lot of people who got out of condos and moved up,” he said. “It usually takes 30 to 60 days to close, and only in May and June did we start to get more inventory, but not much.”
Inventory continues to be a major problem for buyers.
Anthony Fields, Bright’s lead market researcher and data analyst, estimated Falls Church’s inventory is a month (14 homes) or less. (Nguyen says two weeks.)
“Buyer demand won’t be satiated anytime soon,” Fields said.
August 2020 figures reveal the median sold price for a Falls Church City home was $642,500, down 13 percent from a year ago, but just five percent year-to-date ($800,000). This compares with the area’s August, 2020 median price of $515,000, and nationally, $315,000, for existing homes and $312,800 for new ones.
Nguyen tells of one house in Falls Church City listed at $700,000 which received 18 offers and sold for $780,000. Multiple offers are not uncommon.
“The sweet spot in Falls Church is between $700,000 and $900,000,” and those homes are on the market for a week or less.
“Homes at a million dollars are in a different category and they may stay on the market slightly longer, but if you see any property for longer than 10 days, it’s a chance to negotiate.”
Condos, long the bane of any type of residential housing, have lost some cache, according to Wu, because no one wants to share elevators, hallways, or be close to neighbors. Nguyen said condos are still selling in Falls Church, especially to first-time buyers who can almost find “free money.”
Finnegan called the low interest rates “through the floor.” Wu said: “It’s almost like they are giving it [money] away.” Most predict low rates will last another year, at least.
Many homeowners have begun re-evaluating their lifestyles and retrofitting their homes to meet 2020 needs.
“Once people realized what the new reality looked like, they began thinking and wanting outdoor features, a yard, a deck, a screened-in porch,” said Wu.
And if it can’t be redesigned, well, there are always cheaper properties not too far distant, like in Winchester, Fredericksburg and even Charlottesville, which Sturtevant says are luring Northern Virginians away.
“Working from home may become permanent,” she said. “Residents may realize ‘I don’t need to be in Northern Virginia and as good as Falls Church is, we can have a quality of life that’s more affordable in a rural market.’”