For as long as I can remember, fall has been one of the best times of year to sell a home in Northern Virginia. It is usually second only to spring, stronger than either summer or winter, and fall sellers often benefit from the comparable sales established during the spring market.
Northern Virginia also receives a seasonal boost from the federal government and the contractors that support it. The federal fiscal year ends September 30, creating a final push to obligate remaining agency funding before budgets expire. New contracts, expanded programs, promotions, transfers, and hiring can all generate housing demand. At the same time, vacations end, children return to school, and buyers who put their plans on hold during the slower summer months come back into the market.
The question this year is whether that fall market is actually going to arrive.
The numbers released this week paint what initially looks like a very bad picture. During the week ending September 6, showings across the Washington, D.C. metropolitan area were down 28.7% from the same week last year and 14.8% from the previous week. New listings were down 12.9% year over year, while active inventory remained 10% higher.
Those numbers are concerning, but they require context. Labor Day fell on September 7 this year, compared with September 1 last year. This year’s reporting period captured the final vacation weekend of summer, while the comparable week last year came after Labor Day, when the fall market was already underway. This is not a clean year-over-year comparison, and the holiday timing almost certainly exaggerated the decline in showings and new listings.
Still, the market was already showing signs of a stalemate before Labor Day. Buyers see more inventory and believe they can negotiate aggressively, while sellers continue to rely on limited supply and prior comparable sales to justify their prices. Neither side has as much leverage as it thinks. Condos, luxury townhomes, larger luxury condos, and new construction are generally moving more slowly, while properly priced single family homes in desirable locations and strong school districts can still attract competition. Higher mortgage rates are magnifying those differences and pushing buyers toward the properties with more affordable monthly payments.
It is too early to call this the fall market update. The next few weeks will give us a much cleaner picture. If showings and contracts rebound after the late Labor Day weekend, the fall market may simply have been delayed. If buyer activity remains weak while inventory stays elevated, then Northern Virginia may be entering the season with more of a stalemate than a recovery.