As we’ve known for a year now, the real estate market in Loudoun County is red hot, and despite casual conversations about a 2021 housing crash, all indications are that the seller’s market is here to stay—albeit, a less red hot seller’s market.
In the first half of 2021, we saw a near 9% increase in median sales price for homes in Loudoun County versus the first half of 2020. While home value is increasing, so are the number of home sales, with more than 1,000 more homes sold through June 2021 than in the first half of 2020.
Different factors shift real estate trends, however, three primary factors have been the driving force behind the overheated market in northern Virginia in the first half of 2021.
1. Lack of Inventory
Inventory continues to be a major driver of the real estate market in Loudoun County. In the first half of 2021, there were on average 285 active listings per month; that’s nearly 400 less active listings per month than we saw in the first half of 2020 and more than 1,000 less active listings per month as compared to the 10-year average.
Even when buyers are able to find the right house on the market, they have to move quickly as houses are only staying on the market for about 12 days. We saw this trend of homes moving quickly in the summer of 2020as well, however, this sustained trend means buyers should really be pre-approved for a mortgage loan to be most competitive, or pay cash.
2. Historically Low Interest Rates
Mortgage interest rates continue to be at historic lows, sitting around 3%. The COVID-19 pandemic and ensuing questions about the economy caused the Federal Reserve to continue lowering rates, and although vaccination numbers continue to increase, it doesn’t appear interest rates will trend in that direction. Low interests will continue to drive buyers into the market, lessening the chance of a market collapse.
While interest rates are down, lenders have tightened their lending practices to hopefully avoid another crash like we saw in 2008. Qualifying for a loan is becoming increasingly challenging—especially for those who are self-employed—which means the lenders are assuming less and less risk.
3. Millennial Buyers Entering the Market
According to the 2021 NAR Buyer and Seller Report, the median age of first-time homebuyers is now 33, which is also the average age millennials turn this year. With a new generation entering the house-buying picture, the opportunity to sell is becoming more appealing. Millennials also tend to have different wants and needs when looking for a home—including updated kitchens, backyards for hosting friends, pet-friendly features, and smart-home technology—so if you can spruce up your home pre-sale, these are a few amenities you should consider adding.