The housing absorption rate for detached houses in Alexandria City is in the 39 percent range, reflecting a sharp uptick in market activity following a somewhat flat sales cycle. This is giving many sellers some comfort, even though the average on-market time has jumped to 110-plus days.
The absorption rate for town homes is at 23 percent, and near 20 percent in the condo market. Buyers are making their imprint on a market that, until last year, was on a very fast track in favor of the seller.
To gauge the market, consider that a sellers market is considered to be one where thirty-three percent or more of existing listings move into the under contract column. In a strong buyers market, that absorption rate (the rate at which listings are absorbed by the market) drops to less than 25 percent.
With interest rates on home mortgages still at record low levels in the 6 percent-plus range for conventional loan packages, buyers who had been on the sidelines appear to be realizing that homes situated in desirable locations, with close proximity to the District and high-employment centers in Fairfax County, are moving to our city at impressive numbers.
The biggest percentage of buyers are purchasing in the $500,000-$599,000 price range, with the $600,000-$699,000 price range in second place. Thirty-three percent of buyers are purchasing homes in the $400,000-$499,000 price range. The numbers for higher-end prices are likewise impressive, with homes priced at $700,000-$799,000 claiming just over 30 percent of the homes sold; the $800,000-$899,000 price range accounts for about 36 percent of purchases, equal to that of homes in the $900,000-$999,000 price range.
In both the $1 million to $1,249,000 and the $1,250,000-$1,499,000 price range, homes are being absorbed at 55 percent. And it gets better: In the $1,750,000-$1,999,000 range the rate is 50 percent!
While these numbers are impressive and reflect well on our city, we are also seeing record numbers of concessions in settled transactions. Sellers and buyers are sharing some percentage of closing costs, which were usually paid by the buyers in the recent sellers market. Many of these sales, while impressive, came to market priced higher than the settled price.
The key to realizing a sale in this buyer-friendly economic climate is to price realistically in terms of the market and to be sure you are represented by a Realtor who will spend the time and money necessary to move your listing to the forefront of what is still a significant backlog of inventory by at least six-plus months. In addition, once you have selected a strong professional to represent your sale, do take the advice you are paying for.
A former Assistant Secretary of the Department of Housing and Urban Development, Jeni Upchurch is now a Realtor with McEnearney Associates in Old Town Alexandria. Call 571-216-6701.