Potomac — Buoyed by low mortgage rates, low regional unemployment, growth in the number of households and rising consumer confidence, the residential real-estate market in the region has rebounded in a big way.
Unlike the last five years, demand is up and supply is down. In fact, in some particularly desirable neighborhoods, the transition from a buyer’s market to a seller’s market is all but complete.
Call it the new “reality in realty.”
“There is an oversupply of buyers and less inventory right now in the market,” said Anil Khanna, a real estate broker with Champion Homes Realty in Chantilly, Va. “I have seen it to be a seller's market based on the number of offers I have seen with the properties that I have bid on for buyers.”
Khanna added that low interest rates are beginning to rise, and that has created a sense of urgency with buyers.
According to Freddie Mac, the rate for a 30-year, conventional, fixed-rate mortgage rose to 3.54 percent in May from 3.45 percent in April.
Despite some similarities to the boom period in housing nearly a decade ago, market conditions that led to the housing bust are vastly different, according to national housing experts.
“The boom period was marked by easy credit and overbuilding, but today we have tight mortgage credit and widespread shortages of homes for sale,” said Gary Thomas, president of the National Association of Realtors.
“The issue now is pent-up demand and strong growth in the number of households, with buyer traffic 29 percent above a year ago,” Thomas said.
Lawrence Yun, chief economist for the National Association of Realtors, said existing-home sales are at the highest level since November 2009, when the market jumped to 5.44 million as buyers took advantage of tax stimulus.
Sales have stayed above year-ago levels for 23 months, while the national median price shows 15 consecutive months of year-over-year increases.
A June 6 report released by Metrostudy, a national housing data and consulting firm, reports that housing starts are up sharply in Fairfax County, Virginia: This year, there were 386 starts in the first quarter of 2013 compared to 143 in the in the first quarter of 2012, a 170 percent increase.
In addition to housing starts, almost every other housing indicator has trended up from May 2012 to May 2013 in Fairfax County, according to Real Estate Building Intelligence (RBI) — a company that analyzes market trends and statistics from the Multiple Listing Service. In Fairfax County in the past year, the average price for a home increased nearly 10 percent, from $469,000 to nearly $550,000.
In Potomac zip code 20854, the average price of a home for sale in the week ending June 12 was $1,888,374, according to Trulia. In zip 20817 in Bethesda, the price was $1,603,013.
The median sales price for homes in Alexandria, Va., for March to May 2013 was $420,000, an increase of 10.2 percent, or $39,000, compared to the prior quarter and an increase of 6.3 percent compared to the prior year, according to Trulia. The average listing price for Alexandria homes for sale on Trulia was $756,495 for the week ending June 12, an increase of 1.4 percent, or $10,280, compared to the week ending May 22. In Old Town Alexandria zip 22314, the average price of a home for sale was $1,033,158 for the week ending June 12, an increase of more than 3 percent.
In north Arlington, Va., the average list price of a home for sale in the week ending June 12 was over $1 million in three zip codes, 22213 ($1,280,853), 22207 ($1,235,897) and 22205 ($1,002,568), according to Trulia. Overall in Arlington, prices are up, inventory of houses for sale is down.
A gauge of confidence among home builders jumped in June, hitting the highest level since 2006, according to data released June 17.
The National Association of Home Builders/Wells Fargo housing-market index rose to 52 in June — the first time the index has reached above a key reading of 50 since 2006 — from 44 in May. Readings above 50 signal that builders, generally, are optimistic about sales trends.
“Builders are seeing better market conditions as demand for new homes increases,” said Rick Judson, NAHB’s chairman in the news release. “With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes.”