Newly released statistics on applications for home mortgages show a decrease of about one percent, compared with a year ago, according to the Mortgage Bankers Association, but an increase of 2.7 percent over the previous week. This decline in mortgage applications translates into fewer houses being sold. The National Association of Realtors monthly outlook report cites tighter lending standards for mortgages as a main source of the slowdown in housing activity. Total sold dollar volume for Alexandria City has dropped by 3.21 percent, from $100,961,184 in 2006 at this time, to $97,715,939 presently.
While the headlines of mortgage loan defaults cry out from the national headlines, the northern Virginia market, with its high employment rate and higher-end salaries, has seen consistent sales activity, but at reduced prices. verage sold prices for 20076 thus far rose by 7.19 percent over last year, from $490,103 to $525,355. With 432 new listings coming to market in the last month, buyers are still biding their time in selecting a home of choice. The average on-market time has grown from 58 days in 2006 at this time to 109 currently.
According to the MRIS, the average list price in Alexandria City for properties sold to date is $554,970. Last year, the average list price was $503,953. So, while the market is correcting, we continue to see an appreciation of about 10 percent in the value sellers place on their homes.
Sellers are realizing less than list price across the board, from condos, new homes and existing homes, according to data newly released by the Multiple Regional Information System (MRIS). While a seller in Alexandria City cashed in at 97.25 percent of list price in 2006 at this time, current sales are realizing 94.66 percent of sales price at settlement.
The numbers bear close scrutiny. The decrease in percentage of sales price is likely a result of over-listing asking a greater price increase in the market than local salaries can support, and a correction to the record-setting appreciation rates, which peaked in 2005 and began to level off last year. In addition, buyers are expecting concessions in the terms of the successful contract. Of the 172 properties that went under contract during the past 30 days, 83 of them had contingencies. These may vary from an adjustment in sales price, plus assistance with settlement costs, to a grant for a decorators fee to refurbish a home.
In the residential market, the greatest number of 2007 sales to date are in the $500,000 to $599,999 price range, according to MRIS statistics. This is augmented by the next biggest selling range, which clocked in at $600,000 to $699,999. The next highest share of the market was in the $1,000,000 to $2,499,999 price range. The next price range by volume of sales dropped into the $700,000 to $799,999 range.
While the values of homes in our community are significantly higher than the national average, we are not insulated from the national market correction, albeit on a compressed scale. Regional economic forecasts continue to anticipate a strong regional economy, which should continue to grow for the next several years, by which time area salaries will have caught up to the housing market, and we can expect higher year-on-year yields on residential investments.
Jeni Upchurch provides a weekly update on the real estate market. She is a licensed, full-service Realtor with McEnearney Associates Old Town Alexandria office, and a former Assistant Secretary, U.S. Department of Housing & Urban Development. For a consultation on buying or selling, contact Jeni directly at 571-216-6701.