Normally one of the hottest real estate markets in the Washington metropolitan area, Alexandria, Virginia experienced a cooling off period during the second quarter of this year. This followed on the heels of a very strong run-up from January through the beginning of April with median list prices jumping from $525,000 up to nearly $580,000. Since then, lists prices have come right back down to their starting point. From June 1 to July 1, 2013, there have been a total of 40 price increases and 315 decreases. Of course, list prices are only one indicator out of many. They do however serve as an indicator that the seller's market that so many experts expected in Alexandria may be a little premature. Heading into the crucial 3rd quarter, this is good news for buyers.
First settled in 1695 and officially founded in 1749, Alexandria is located along the western banks of the Potomac River and has an economy that is strongly tied to the federal government and defense industry sectors. The Pentagon is rooted here as is the U.S. Department of Commerce, the Institute for Defense Analyses and ABM Industries. Only six miles from Washington D.C., this independent city of over 147,000 residents covers 15.4 square miles and includes many popular residential neighborhoods from urban high-density to suburban. The historic center of the city is Old Town - a popular retail and restaurant destination and also prime real estate territory. Braddock Road Metro, Del Rey and the new Potomac Yard development are also very desirable. Why the sudden drop in prices then?
First, it's important to note that Alexandria, Virginia has had a strong year overall in the real estate sector. From May, 2012 to May, 2013, the market experienced an 8.81% increase in median sales price. That number would have been even stronger had April not introduced a bit of a decrease. When looking at the actual volume of units sold rather than price changes, the overall picture looks even healthier – the number of closed sales jumped nearly 20% year-over-year from May to May. Perhaps even more significant is what happened during the following month. Even though list prices were falling during the month of April, the actual volume spiked 32.85%. In other words, for whatever reason, sellers began cutting rates and buyers jumped right in.
Where Alexandria's market will go during the 3rd quarter is anybody's guess. The inventory for active listings is low but the number of new listings is on the rise. This includes a healthy amount of upscale new construction townhouses and mixed-used developments in close proximity to the river. Adding to the mix is the fact that regardless of price, the ratio of days on market (DOM) continues to tighten. In short, all the signs for a classic seller's market would seem to be in place. All is except for one thing – list prices have dropped and buyers have taken advantage.
One of the biggest factors in Alexandria's recent price fluctuations may have to do with its high median value. In neighborhoods across the metropolitan region, the biggest price jumps have been in the lower end of the market. A case in point is Prince George's County, an area hard hit during the housing crash of 2007-2008. From May 2012 to May 2013, sales prices soared 18.8%, to a median of $202,000 which is still far away from its onetime high. At the opposite end of the spectrum is Falls Church, Virginia where sales prices dropped 28.8% during the same one-year period, from $875,000 down to $623,000. Where does Alexandria fit in on the price chart? At the current sales price of $525,000, which is level with current list, Alexandria is the third most expensive major territory in Washington Metro. In short, for buyers who've been eying popular Alexandria, this is a good time to act.
Andre Perez | District One Properties LLC | Realtor/Agent/Owner
1305 Leslie Ave, Alkexandria, VA 22301