Seeing the national trends all day long does little to effect a view of the local real estate market picture for those interested. By looking at regional metrics via the research of agencies such as Long & Foster however, mini-trends and more relevant pluses and minuses can be understood. This weeks Industry Snapshot focuses on Northern Virginia.
The Washington Post’s NoVa guru Tom Jackman reported last month Northern Virginia real estate not only being “back”, but a relative “boom” occurring there where the supply of $600k homes is concerned. Aside his focus on that price niche, other positives are clear for the region. Jaunuary, as compared to the previous year, shows clear signs of some counties around Washington doing a lot better sales wise. This Long & Foster Market Minute Market Minute® report tells on the trend best.
Accordingly, hot spots include; the city of Alexandria, and the counties of Arlington, Fairfax, Loundoun (see spotlight below), and Prince William saw increased sales y-on-y. With these increased sales numbers, of course inventories began to dwindle as well. Ergo Jackman’s headline of “NoVa real estate back to booming? $600K houses in short supply, condos in high demand”, this is the sort of language investors want to hear, in case you wondered at Jackman’s readership.
Taking a closer look at NoVa, and for those who are not familiar, The Long & Foster Market Minute® reports come from minute data on residential transactions that are geo-centric, and include universal sales, not just Long & Fosters. Looking at the chart below from their Washington D.C. Metropolitan Area – January 2013 (PDF), Jackman’s contention can more easily be seen.
While the general reduction of inventory trend can easily be seen here, the fact $450k to $650k and above inventory simply does not exist, this is a bit more difficult to pick out in my screenshot. Furthermore, the Long & Foster data clearly shows that most of the NoVa inventory is in fact within the lowest price ranges, somewhere beneath $150k.
Now (trend spotlight), to abbreviate our own report, all any investor would seem to require here might be news like Shenandoah University in Loundoun County expanding their graduate programs, after all expanded classrooms require expanded professor and/or student housing. Add to this further news that Loundoun County may get a campus of Northern Virginia Community College, and the housing picture there takes on new meaning. In fact there is no shortage of news on the trend in NoVa continuing, or even getting more acute where residential inventories are concerned.
Finally, when looking at these regional trends it seems the really tuned in observer might look at this trend from a more winning perspective. Not only are there outside forces like adjacent regional sales pressures etc. but clear opportunities may even present themselves here on a very practical level. What I mean is, using more Long & Foster detail we can look at properties and trends in and around the aforementioned Shenandoah University expansion, take nearby Ashburn Homes, for an instance. With median prices at the lower end of our “inventory scale” ($335,000), and active inventory having gone up last month, for me this says “potential win” if I am looking to buy and sell. One can even hammer out just how much to offer for a property using Long & Foster’s “sales vs. asking” price metrics (below).
In concluding, searching the listings in and around this part of NoVa we find a Long & Foster property a mile from our target at Shenandoah University, a large area townhouse at Ashburn Village priced at $275,000 (image top). Extrapolating our data it seems like a offer of one percent less than the median price is in order. With some hammering down on the deal here, and some patience, somehow coming out ahead in such a market would be a foregone conclusion. There’s margin to be made in them Virginia hills.
Let us know your thoughts.
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