2021 was another strong year for the real estate market in Northern Virginia, with home prices increasing throughout the year and prospective buyers expressing interest in single-family homes in suburban Loudoun County.
Although nationwide the real estate market is expected to experience more moderation in growth than in the past two years, 2022 will continue to be a competitive year for buyers, especially for those looking to put down roots in Loudoun County’s communities. Let’s take a look at the factors we expect to impact the home sales market this spring.
Just as it was in 2021, the biggest challenge for families looking to move to the Washington Metro area will continue to be inventory. Although new construction is anticipated to speed up from last year as supply chains improve, it is likely that new home construction will still face delays. There’s limited inventory of existing homes for sale as well. As an example, in January 2022, there were only 440 active listings in Loudoun—a 17.8% year-over-year decrease to what was already a historically low inventory.
However, as the region looks toward a slowing of the pandemic, seasonal increases in home sales in the spring and summer may return. Buyers may start to see more options as increased values bring more sellers into the market, but competition will remain.
Time on Market
With a strong job market bolstered by government and technology sectors, Loudoun County will continue to see homes on the market only for a short time, even as the time on market increases slightly in other parts of the country. The average time on market for homes in 2021 was just 16 days, so buyers should be prepared to make an offer when they find the home they want.
Prices are expected to increase more moderately across the nation this year compared to last year, but they will still rise. In 2021, the median sale price in Loudoun County was $557,500; although sales cooled slightly during the end-of-the-year holidays, the median sale price in January 2022 was $590,000, continuing the seller’s market and providing premium sales prices for their homes. The seller’s market is also evident when comparing the average sales price over listing price. On average, buyers have paid about 2.5% higher than list price so far in 2022, but some paid more than 20% over list.
Interest rates are still at historic lows, but the Federal Reserve has signaled that it does expect to raise the federal funds target rate in an effort to cool off rising consumer costs. When rates increase—which is expected in the first half of 2022—potential buyers may face increased mortgage rates before demand and price increases slow. We encourage families looking to buy this spring to keep these changes in mind as they consider what they can afford.
Looking ahead, we are excited to continue to help families buy and sell homes this spring in the county’s desirable and friendly communities. As the factors above impact the real estate market, our knowledgeable and committed 15 West Homes team will be here to help you navigate it.