Despite the constant onslaught of bad news about the declining real estate market and the thousands of Americans who are losing their homes to foreclosure, Prince William County and Northern Virginia, in general, are experiencing a very different real estate forecast. Not only is the market here no longer in decline, it’s thriving. According to PWAR, (Prince William Association of Realtors®) the median home sold price from September 2010 is up over 15% from September 2009.
For homeowners who own in the upper price range in Prince William County, this might come as a surprise. It is true that homes valued over $500,000 are not yet experiencing the rising sales price. The chart above shows how the homes in this price range have stabilized and remained constant over the past 2 years.
Figure 1 shows the consistency of the average sales price dating back to September 2005. However, this statistic does not mean that a home would sell for the same about as it would have in late 2005. To illustrate this, we’ve compared the average sales price to the average sales price of homes between 3000 and 4000 square feet, as an example. The price declined from September ’05 to September ’09 and is now beginning to stabilize. Figure 2 records the number of homes sold over the same time frame as Figure 1 and therefore points out the correlation between the fall of inventory and the price decline over the past few years.
The median home sales price is being raised by homes valued below $300,000. In this price range, homes have stabilized and are already on the rise. Figure 3 shows that unlike homes over $500,000, the average sales price in homes below $300,000 have been steadily rising since early 2009.
Similar to the over $500,000 price point, Figures 4 & 5 show the correlation between low inventory and higher prices in single family homes. As prices climb here in Prince William County, less single family homes will be available below $300,000.
As this data shows, the higher priced homes will slowly follow the trends of those valued below $300,000. Soon we will experience a steady increase in home values across all price ranges based on the principles of supply and demand and our area’s healthy absorption rate.
An absorption rate is the amount of time it takes a certain area to sell all of its homes. A normal absorption rate is about 6 months. Rates below 6 months are categorized as a Seller’s Market because they have less supply of homes and more demand for them, and therefore homes will sell faster. Rates over 6 months are Buyer’s Markets, because there are many homes for sale and the demand is low.
Absorption rate = (# of Active and Under Contract Homes)
[(# of Sold homes)/(time period in months)]
Based on the last six months, PWC is experiencing an absorption rate of 5.525 months. This rate is very close to normal and is the reason prices are slowly climbing; there is a slightly lower supply than demand. In the case of 3000-4000 SF homes, the rate is 5.358 months and in homes between 1000 and 2000 SF the rate is 4.972 months. Based on this evidence, Prince William County’s real estate market is strong and growing. The housing crisis is over here, and it is a great time to buy or sell in Northern Virginia.
Here’s your Market Update for in North Arlington, VA. There are currently 279 available homes less than 1500 sqft for sale in this area. Below are market statistics for October 2010 compared to October 2009. This chart shows only homes less than 1500 sqft in area, for statistics for larger homes in North Arlington scroll down.
The Holyfield Team
Mark Holyfield
Kristie Zimmerman
