Chilly Spring Market?
With Northern Virginia’s cooling housing market the past several months, few experts expected last year’s quick sales and 20-percent appreciation. Housing statistics for March are beginning to prove them right. Sales in March 2006 dropped 17 percent compared to last year, according to the Metropolitan Regional Information Systems, Inc. (MRIS).
Most important to homeowners, though, is the slowing trend in sales prices. So far this year, home appreciation has decelerated from dizzying 20-plus percent rate hikes of years past to 7 percent. According to MRIS, the average sales prices in March rose 6 percent compared to last year. Conversely, home prices at this time last year were rising by 23 percent.
Modest expectations that more buyers would return in the spring may have caused more sellers to enter the market in March, driving a spike in inventory. Listings shot up from February to March with 1,989 additional listings, nearly as many as all the listings in March of last year, 2,034. According to MRIS, March’s inventory of 8,577 listings is more than four times what it was last year. Yet from March of 2004 to March of 2005, there was virtually no change in inventory.
Condo Developer Wins Award
Crescent Heights, which offers three properties in Northern Virginia, received the Freddie Mac Development Firm of Year by the National Association of Home Builders (NAHB) at its annual conference on April 4 in Scottsdale, Ariz.
The Miami-based company, the nation’s largest condo developer, entered the Virginia market in 2002 and is currently selling units at three condominium developments in Northern Virginia: The Savoy at Reston Town Center, Fairfax Ridge and The Exchange at Van Dorn.
Crescent Heights received the award for being the "best of the best" in the multifamily housing industry in the Pillars of the Industry Awards. This is the first time the award was given to a condominium developer.
“As a developer specializing in condo conversions, Crescent Heights is consistently at the cutting edge of this industry trend,” said Jerry Howard, NAHB executive vice president and CEO, in a press release.
Award judges considered overall quality of the company’s recent projects, including success in achieving the company’s visions, financial performance, innovative development strategies and a demonstrated ability to overcome obstacles.
“We are blessed to have had the opportunity to build beautiful buildings that impact skylines, to breathe new life into defunct historic buildings which could never be rebuilt today, and to activate neighborhoods with hidden character and charm,” said Bruce Menin, Crescent Heights Managing Partner, in the press release.
In 20 cities, the company has converted more than 35 apartments and offices to condo ownership properties.
Rental Market Strengthens
As the housing market in Northern Virginia slows, the rental market has shown signs of picking up. In Fairfax County, rental units are not staying on the market as long as they did last year. The average Fairfax County rental listing last 49 days for the first quarter of the year compared to 65 days this time last year, according to Northern Virginia Association of Realtor (NVAR) rental statistics. In addition, 11 percent more units are being rented in Fairfax County compared to last year. Rental inventory continues to climb. Rental listings in Fairfax County increased 92 percent compared to last year.
During the same period, rental prices have increased 7 percent compared to last year. The average rental price in Fairfax County is now $1,846.
Housing Shortage Could Hurt Economy
There’s a growing housing shortage in the Washington, D.C. Metropolitan Area, a problem George Mason University’s Center for Regional Analysis says could eventually hurt the local economy.
As job growth in the region continues to exceed housing production, the housing supply shortage also increases, according to a presentation by Stephen Fuller, director of the Center for Regional Analysis at the Regional Housing Opportunity Summit hosted by the National Association of Realtors last month.
The shortage creates increasing demand on housing, which then generates housing price increases. The end result is that the future workforce has few affordable housing options, which could result in wage inflation and threaten the region’s economic health.
Fuller said the shortage could be alleviated with local public policies that promote more housing to better match demand.