Loudoun home sales recovering from sluggish market
Realtors were reporting brisk sales last weekend, and in some cases multiple bids, for homes in popular neighborhoods and subdivisions in Sterling and Ashburn, from Lowes Island west to Leesburg. Though statistics won’t be available for several weeks, the sales reports suggest that the county is coming out of a sluggish market that began with the government shutdown last year and chilled with cold weather throughout the first quarter of 2014.
The conditions created an unusually high inventory: 20 percent higher than 2013 at this time. The largest inventory was in townhomes with listings more than 50 percent higher than a year ago, according to the Dulles Area Association of Realtors. The popular Colonial-style townhome with its two- or three- story footprint above a garage has become a staple of high-density living associated with Loudoun County’s growth. Popular with young families, empty nesters and transplants from the Capital District, townhomes have filled much of the growth in subdivisions such as the Cascades in the eastern part of the county, and Broadlands and Brambleton northwest of Dulles International Airport.
For the first quarter of 2014, the median price for townhome properties was $387,500, an increase of 2.8 percent over the previous quarter and an increase of 7.9 percent from 2013. A total of 361 townhomes were sold in the first quarter, but activity in the first two weeks of the spring market have been brisk.
“We’re getting multiple bids for townhomes now,” said one Realtor specializing in properties in Sterling. “Some are only on the market for a few days.”
Demand for single-family or detached housing has also been subdued through the first quarter. Fewer than 500 sales in the quarter represented a 12.8 percent decrease from the same period one year ago, while inventory was 11 percent higher. Days-on-market (DOM) was 72 days.
In the previous quarter, townhomes were on the market for an average of 45 days, according to DAAR’s monthly trend report.
Given the accelerated growth of the county, the fastest growing in Virginia and second in the nation, expectations have been high for a strong spring market. But some Realtors and sellers have been disappointed.
“I think we clearly saw sluggishness in the market,” said Bradley Boland, president of the Virginia Association of Realtors. “We’ve seen a significant increase in activity in the last 30 days. Prices are up. With the values increasing, sellers are coming out.”
Boland also cited a tightening of the credit markets. Banking regulations have tightened following the real estate meltdown of 2008. Potential buyers who may have qualified for mortgage loans two years ago face tighter scrutiny today and may not qualify for a mortgage.
Even with the slower sales pace and the uptick in supply across all housing segments, the media sales price was 5 percent higher than in the first quarter of last year, marking the fifth consecutive year with annual price gains in the first quarter. The median sale price for a home in Loudoun County is $415,000.
“Anything under $500,000 is going right out the door,” said Beckwith Bolle, principal broker at Carter Braxton Preferred Properties in Leesburg. “We had a few really tough months, because of the weather. Inventory tripled in three weeks.”
Key trends from the DAAR report:
Prices. The median sales price in the first quarter was $415,000, representing a 4.7 percent increase over last year. This is the highest quarterly, median sales price since 2007 and the 18th quarter of the last 19 with a year-over-year increase, dating back to the summer of 2009.
Sales. The 989 closed sales in the quarter represented a 10.7 percent decrease from the first quarter of last year. Harsh winter conditions stymied sales activity earlier in the quarter, but the pace improved in March as new contracts were up 2 percent year-over-year.
Inventory. While purchase activity declined, listing activity continued to grow; there were 8.9 percent more listings added in the first quarter than in 2013 (2,096 vs. 1,925). As a result, end-of-quarter inventory is up 19.7 percent compared to this time last year, though the 1,357 active listings are only 2.1 percent above the five-year average.
Days-on-market (DOM). Half the homes sold in the first quarter were on market 31 days or fewer, five days more than the median DOM of Q1 2013. The median DOM in March was 18 days, three days higher than March 2013. The average DOM was 59 days in the first quarter, representing a four-day improvement over the same quarter last year.
Price negotiations. The average sale-to-original-list-price ratio of 97.5 percent was higher than the 97.1 percent mark of a year ago. This is one point higher than the five-year average of 96.5 percent and the highest first quarter level since 2005.
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