by Lizzy Conroy
January 25, 2023
Opportunity Knocks! Year End Market Report McLean & Great Falls
2022 Compared to 2021 and 2012
By Lizzy Conroy
Happy New Year! It’s January 2023 and the number one question we are asked these days is, “How’s the real estate market doing?” While mortgage interest rates impacted the market in the last two quarters of2022, we believe that opportunity will emerge in 2023. Inventory remains persistently low, benefiting sellers who are planning a move in 2023, while buyers can take advantage of increased days on market and a return to more normal market conditions. When looking back to 2012, sales are up 10%, despite the fact that the number of sales in McLean and Great Falls decreased nearly 27% from from 2021 to 2022.The most active price point has shifted from under $1,000,000 to over $1,000,000 and the strongest price category in 2022 was the over $3,000,000 segment.
During the pandemic, the McLean and Great Falls real estate markets rapidly accelerated on account of low interest rates, changes in work habits, evolving demographic trends, and the great Covid migration. This event dramatically deviated from the normal trendline and should be taken in stride. Gone are the days of dozens of offers 10-20% over list price with no contract contingencies. In many ways, this is positive as it allows the market to match buyers and sellers more equally. In 2023 we will experience more normal price appreciation along with contract contingencies that allow for important due diligence.
Currently there is a 2.4 month supply of homes in McLean and a 2 month supply in Great Falls. Inventory has increased by .5 month in both areas over the last 3 months because days on market has increased and the rate at which homes sell has normalized. Even more telling is that inventory in McLean below $2.0m is only 1.5 months while above $2.0m it is exactly 6 months. In Great Falls below $2.0m there is virtually no inventory - just a 10 day supply - while over $2.0 there is 7.8 months of supply. This means that sellers, especially those whose homes are listed under $2.0 million, who correctly price their homes and offer a product in good condition will still experience positive market response. Buyers now have an opportunity to negotiate for a more favorable price and terms, and even more so in the over $2.0m category.
In 2022 as the price range category increases, the percentage decline in sales volume vs. 2021 decreases. Sales under $1.0M fell 35%; $1.0-$1.5m fell 30%; $1.5-$2.0M fell 25%; $2.0-$3.0M fell 14%; and $3.0M+ increased by 9%. As the market continues to shift in 2023, we may start to see these numbers flip, where the biggest declines would
occur in the highest price category. In fact, 80% of the currently available homes for sale in Great Falls are priced over $2.0M and 56% of available homes for sale in McLean are over $2.0M. Alternatively, only 12% of the McLean inventory is detached homes priced under $2.0M. This means in 2023 there could be more opportunities for sellers in the under $2.0M category and for buyers in the over $2.0M category.
If you are a seller, now is the time to take advantage of continued low inventory and pent up buyer demand. It is critically important to consult with an agent who has counseled clients through more than one market cycle and can draw on past experience to solidify an effective pricing and marketing strategy. HBC Group has an exclusive in-house Home Stylist that can assist in making recommendations for your property that will maximize buyer interest. Homes priced correctly for the market and in good showing condition continue to command top dollar.
If you are considering buying, it is in your best interest to partner with an experienced local lender and a seasoned real estate agent to strategize on your financing options and contract negotiations so that you can position yourself successfully. With the number of buyers normalizing and rising days on market there are more opportunities to find your next home and negotiate favorable contingencies.
Karen Briscoe, Lizzy Conroy, and Jenny McClintock with HBC Group at Keller Williams are active and experienced Realtors® in the Northern Virginia marketplace. Their accomplished team represents sellers, buyers, investors, and builders in all price ranges and is available to assist with your real estate needs! What is your Next Move? Get in touch with us today!
www.HBCGroupKW.com, 703-734-0192, Homes@HBCGroupKW.com.