2008 Northern Virginia Absorption Rate Favorable at Year-End
The number of Northern Virginia active listings decreased in December to a low of 7,688 for the year, resulting in a lower-than-average 5-month supply of housing for this region. This represents a marked improvement from the more than 12-month supply that existed in January of 2008. As described in detail below, lower prices are luring buyers, resulting in a 48 percent increase in the number of sales in Greater Northern Virginia in December compared with sales in December of 2007.
Inventories typically fall sharply in December from November due to seasonal adjustment. The housing market is considered roughly in balance between supply and demand when the inventory is around six months.
Inventory numbers capture most, but not all of the entire housing supply. Newly constructed housing and homes in the early stages of the foreclosure process aren't always included in Realtors®' multiple-listing services.
Fed Funds Target Reached Record Low To Help Stimulate Economy
Weekly balance-sheet data, once a lesser-followed Federal economic report, have taken on heightened importance as Federal Reserve policy enters a new phase in which credit programs replace the federal-funds rate as the central bank's main tool. Last month, the Fed slashed the fed-funds target to a record-low range near zero. In a statement, officials signaled their focus will be on the Fed's balance sheet to stimulate the economy.
Source: Wall Street Journal: Fed's Various Efforts to Bolster Markets Are Ballooning Its Balance Sheet
Realtors® Urge Congress to Increase FHA Funding
National Association of Realtors® President Charles McMillian, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, expressed the importance of having the Federal Housing Administration’s participation in economic and housing recovery.
“FHA insurance is one of the primary sources of mortgage financing available to families today,” said NAR President Charles McMillan. “FHA has been playing a larger role in the mortgage market since the mortgage market meltdown and tightening of credit, and we’re asking Congress to work with the new administration to appropriately fund the staffing and infrastructure needed to complete FHA modernization.”
FHA’s market share has increased from a low of 2 percent in 2006 and is expected to grow to over 30 percent in 2009. FHA loans are rapidly becoming the only source of funding for many consumers, particularly first-time home buyers and borrowers with low downpayments.
House Bill Aims to Stabilize Housing,
Addresses Foreclosures and Stimulus
A bill that embraces the need for righting the housing market—the first big step toward economic recovery—was introduced recently in the U.S. House of Representatives. NAR has been urging the incoming Obama Administration, as well as Congress, to address critical housing needs. “This legislation is a great beginning, but more needs to be done. We must continue to bring potential homebuyers into the market by ensuring low mortgage interest rates, making the higher 2008 conforming loan limits permanent, and applying the $7,500 tax credit to all homebuyers and making it non-repayable,” NAR President Charles McMillan said.
Northern Virginia: December 2008
The Northern Virginia Association of Realtors® reports on December 2008 home sales activity for Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton.
A total of 1,510 homes sold in December 2008, a 25.94 percent increase above December 2007 home sales of 1,199. At the end of December, there were 1,321 sales contracts pending in Northern Virginia, a 40.08 percent increase over the 943 contracts pending in December 2007.
Active listings decreased by 11.97 percent from last year, with 7,688 active listings in December, compared with 8,733 homes available in December 2007. The average days on market (DOM) for homes in December 2008 decreased by 10.68 percent, to 92 days, compared with 103 days in December 2007.
Sales prices continue to remain lower than those realized last year. The average sales price in December fell by 22.30 percent from December 2007, to $422,674, compared with last December’s average of $543,970.
The median price of homes sold in Northern Virginia in December was $340,000, which is a decline of 22.29 percent compared with December 2007’s median price of $437,500.
Greater Northern Virginia: December 2008
Sales activity in Greater Northern Virginia (NVAR jurisdictions plus Prince William, Loudoun and the Greater Piedmont counties) for December 2008 continues to show an increase from 2007.
The number of Greater Northern Virginia region homes sold in December was 3,032, a 48.63 percent increase from December 2007’s total of 2,040 sales. This marks the ninth consecutive month of increased year-over-year sales totals for Greater Northern Virginia.
The average sales price of $334,239 in December 2008 continues to lag behind the 2007 average by about 31 percent. The December 2007 average sales price was $484,310.
Across Greater Northern Virginia, the number of listings showed a decrease from 2007 numbers, with 15,890 listings active, which is 22.28 percent less than this time last year, when 20,445 homes were available. The average DOM for a home sold in December 2008 was 100 compared with last year’s 114 DOM, a decrease of 12.43 percent.