State of the Northern Virginia & DC Real Estate Market - August 2009

Summer has been surprisingly busy this year in the DC real estate world. Here's the latest:

Buyers are in a race against the clock to claim the $8000 tax credit by November 30, which has spurred activity in lower price ranges ($500k-ish and below) dramatically.

Northern Virginia inventory, in particular, is significantly lower than past years - check out this inventory graph, and the surprising uptick in average sales price just below it. There is still a lack of "good" inventory out there, resulting in a lot of very frustrated buyers who are moving quickly and at full price when they see something they like that is priced right. At least half of the offers I've written the past few months (and there were a lot) were competing against other buyers and, even with very solid terms, often losing to others with equally solid terms.

The lack of new construction in the area is also adding to the inventory drop. As this article notes, condo prices are down, driving sales up. But this little bit in the middle is particularly intriguing: "Because the number of projects set to deliver inside the Beltway will drop to near zero, Leisch said prices will rise sharply between 2010 and 2011."

In related news, and adding frustration to the market for both buyers and sellers, there are continuing challenges with appraisals, as noted in this WSJ article.