Why The Low Inventory of Homes in Northern VA?

The largest challenge in today’s Northern VA housing market is a lack of housing inventory for sale in the starter home and trade up price ranges. This rises the question, why the low inventory of homes in Northern VA?

I have previously defined this challenge as an “overwhelming lack of supply,” and even a “straight up inventory crisis.” First American just released the results of a survey which sheds light on the reasons for the current lack of supply.

The survey asked title agents and real estate professionals to identify what they believe are the top reasons for this lack of inventory in their markets. Here are the results of the survey:

• 47% – existing homeowners are worried that they will not be able to find a home to buy

• 26.5% – first-time buyer demand is absorbing a large share of available homes

• 11.3% – homeowners’ mortgage rates lower than the current rates

• 10.6% – insufficient or negative equity in the home

• 4.6% – foreign buyer demand is absorbing a large share of available homes

As the survey revealed, there is a shortage of current homeowners willing to put their homes on the market for one of three reasons (see numbers 1, 3 and 4 above).

Northern VA Low Inventory in August:

The numbers below show that active home listings across all price ranges are well below the 5 year average. This issue is magnified since the closed sales on homes in Northern VA is above the 5 year average. Closed sales are up and active listings are down creating an inventory crisis!

Is this an opportunity for some homeowners?

The report on the survey mentioned above explains:

“The crowd has spoken, and it seems in many markets home buyers and sellers alike are ‘imprisoned’ by the lack of housing inventory.”

That leaves a tremendous opportunity for every homeowner not facing these concerns. Listing your home on the market today, you are subject to far less competition. That will result in your home selling quickly and for the highest possible price.

Premium and Luxury Homes a Different Market!

I have recently written about the opposite challenges now starting in the premium and luxury real estate market in Northern Va in my article, Buyers Market Helps Premium Home Sales Soar!

Builders continue to try to maximize ROI by building the largest home allowed by code on lots in Vienna, Mclean, Arlington, Great Falls, Fairfax City, and parts of Falls Church. Higher inventory in this price range has caused prices take a small dip in some areas in Northern VA.Bottom LineWhile many homeowners are feeling imprisoned for multiple reasons, those who are not handcuffed by these concerns have a once in a lifetime opportunity to sell their houses at a peak selling time.