For the past seven consecutive months, the number of homes for sale in the region has increased, suggesting a tougher market for sellers.
In August, home inventory jumped nearly 50 percent compared to last year, which was called "dramatic" by Realtors and economists alike.
According to September’s figures, which were released last week by the Metropolitan Regional Information Systems Inc., inventory made an even larger jump — this time by 89 percent compared to last year.
From January to September, the number of homes listed for sale in the region has ballooned from 1,193 to 6,693. Looking only at the increase from August to September, the number of listings has spiked by the addition of 1,688 homes on the market, from 5,005 to 6,693.
SOME IN REAL estate have suggested the inventory numbers reflect a perception among homeowners that the so-called housing bubble may soon pop.
Angela Gates, a spokesperson for the Northern Virginia Association of Realtors, thinks that perception may be a factor in rising inventory.
"There’s been a lot of people talking about a housing bubble, so people think they should put their house on the market before anything happens," said Gates. "When really they have no reason to panic."
She said that the market is undergoing a correction, but that home prices are projected to maintain value. "Home prices will continue to increase 10 to 15 percent," said Gates. She also pointed out that even though inventory shot up 89 percent last month, average home values continued to rise at a high rate compared to last year.
The average home sold in September for $543,170, a 23 percent increase from last year. However, September marked the first month since May that the Northern Virginia average selling price dropped below $550,000. In August, the average home sold for $558,880; in July it was $559,790; and in June it was $556,606.
Gates explained that low mortgage rates and the area’s traditionally strong job growth help reinforce rising home values.
For some time now, economists have been saying that rate of rising home values would slow. Most recently, at a Realtors conference hosted by NVAR in September, Lawrence Yun, a senior economist with the National Association of Realtors, projected that the area’s home values would slow to an appreciation rate of 10 to 14 percent. Yun suggested that the area’s steady job growth would insulate the area from any drops in home appreciation.
THE LATEST STATISTICS, however, point to what many real estate agents have been saying for months now.
"It is pretty much switching from a sellers market to a buyers market," said Eileen Casamo, an associate broker with Coldwell Banker in Old Town Alexandria. "What [the market] is doing now is evening itself out."
With more than 20 years experience in real estate, Casamo feels confident, though, that the spring market will bounce back and help demonstrate a resilient market in the long run. "We’re seeing a slowdown right now, but when we get to the spring, I have no doubt it will pick up," said Casamo. "Perhaps, it will be a little more rational than in past years."
Casamo also said that she’s heard from homeowners and agents that bubble watchers may be responsible for the rise of homes on the market. "People keep hearing that now’s the time to sell," she said. "But I don’t think people should run and panic. Things are just leveling off and I think once spring arrives everybody will be happy."
Things may slow down before they pick up. Gates noted that the market traditionally slows down in November and December because of the holidays.
BUT THE OVERALL feeling is that market forces are heading toward equilibrium. "In the next couple of years, [the market] is definitely going to stabilize," said Gates. "Right now, it’s starting to look more like an equal market [between sellers and buyers]."
Most real estate agents seem to agree, including Boofie O’Gorman, a Realtor with Long & Foster of Reston. "It’s a more balanced market, which is not a bad thing," said O’Gorman, who has about 18 years experience in real estate sales.
O’Gorman also said that pricing has played a role in the rise in inventory, suggesting that sellers have sometimes priced their homes above and beyond the market.
"What we’re seeing is a resistance to unsustainable price increases," she said. "But I think the economy in the area is strong, so overall demand will continue." With buyers being a little more conservative, O’Gorman said homes are still selling very well when houses are listed appropriately.
While the region continues to see higher and higher levels of inventory, sales continue to drop. For the fourth consecutive month, sales have decreased. According to figures from MRIS, sales in September fell by 14 percent compared to last year. In August, sales dropped 8 percent compared to last year.