Loudoun County Housing Inventory Cause for Caution

After a year of steadily diminishing housing inventory throughout Loudoun County, inventory has spiked over the last 2 months. After dropping almost 30 percent from the beginning of May 2009 to the middle of April 2010, inventory has spiked up almost 10 percent in a matter of a few weeks…

More Loudoun County housing inventory statistics…

• The number of new listings coming on the market in March 2010 was 50 percent higher than in March 2009 (1092 versus 727)
• The number of new listings coming on the market in April 2010 was 32 percent higher than in April 2009 (994 versus 752).

The increase in new listings and overall inventory may be a very welcome thing if you ask buyers. Most buyers can’t seem to find a home that meets their needs or they’re competing against multiple offers every time they do.

But if you’re a seller, that’s a different story. More homes on the market means more competition, lower selling prices and increased days on market.

Loudoun County housing inventory and the rate of new listings coming on the market is something we all need to keep our eyes on because if inventory continues to go up AND interest rates go up this summer as everyone is saying they will, the market will soften.

Loudoun County Housing Market Statistics – April 2009

Here’s a look at Loudoun County housing market statistics for April 2009:

Total Sales/Buyer Demand 

• April 2009 sales were up 9 percent over March 2009
• April 2009 sales were up 8 percent over April 2008

Inventory/Supply

• April 2009 had 892 new listings come on the market versus 842 in March 2009, an increase of 6 percent (The increase in listings between March 2008 and April 2008 was 9 percent)
• April 2009 had 892 new listings come on the market versus 1254 in April 2008, a decrease of  29 percent

What does this mean?

The numbers show a decent increase in buyer demand and a huge decrease in inventory. This trend has been apparent since the end of 2008 and is leading to price stabilization througout Loudoun County.

This is good news for the Loudoun housing market especially for home owners and sellers. But it can be frustrating to Loudoun home buyers because they don’t have many homes to choose from. And once they do find homes that meet their needs, they’re seeing them sell before they have a chance to look at them or they’re in multiple/competing offer situations on home(s) they’re writing offers on.

Loudoun’s housing market conditions also lead to an interesting conversation with home buyers relocating to the area from places that are still getting hit hard by the market – they’re expecting the local market to be a “Buyer’s Market” like the one they’re moving from, but that’s not the case. And our local market goes against what much of the media is still saying, much of which is outdated, behind the curve and on a national, not a local level.

How does the Loudoun County housing market compare to the rest of Northern Virginia?

The rest of Northern Virginia is in a similar situation. We’re seeing the same trend in Fairfax County and now in Prince William County. Fairfax County wasn’t quite hit as hard as Loudoun County, but Prince William County definitely had us beat and is taking longer to recover. And, overall, Northern Virginia is leading the Washington, DC area in the housing recovery.

Related Articles

Are Loudoun Home Values Where The Should Be?

Loudoun Foreclosure, Bank-Owned, Short-Sale Market Statistics – April 2009

Northern Virginia Leads DC, MD in Housing Recovery

The Northern Virginia area is ahead of Maryland and Washington, DC when it comes to the housing market (including a bottom and an eventual housing recovery). This is according to an article in the Wall Street Journal by Thomas A. Lawler, founding member of Lawler Economic & Housing Consulting, LLC.

In the article, Mr. Lawler cites statistics that show that Northern Virginia's housing market hit a peak and started its downturn ahead of the rest of the DC metro area. 

He also states that the amount of depreciation in home values that Northern Virginia has seen is greater than the rest of the DC metro area. In fact, he says that DC and MD have a ways to go before dropping as much as Northern Virginia already has.

Mr. Lawler explains one of the reasons for the difference in local markets:

One reason why reported sales prices have declined more rapidly and sales have rebounded more sharply in the northern Virginia area is that the area has seen a much greater increase in distressed sales — in part because Virginia is a “non-judicial” foreclosure state while Maryland is a “judicial” foreclosure state. The typical timeline from when a borrower stops payment to when the home is actually foreclosed on is longer in Maryland than in Virginia. As a result, the Maryland suburbs have a much larger overhang of loans that are currently in some stage of foreclosure than is the case in Northern Virginia…

Just goes to show that you can't even look at a regional area as a whole anymore – you need to look closely at the "hyper-local" real estate market you're in. What the mass media says about the U.S. housing market as a whole or even a large geographical area such the DC metro area doesn't always apply to you and your specific area.

P.S. Yes, I know…Mr. Lawler was senior VP for Fannie Mae through 2006 which is not necessarily a good thing for the resume right about now…but the statistics and his points are valid.

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