Northern Virginia Market Report: Fourth Quarter 2021

Northern Virginia’s real estate market continued to flourish during the fourth quarter of 2021. According to Ryan McLaughlin of the Northern Virginia Association of Realtors (NVAR), the Northern Virginia real estate market “surpass(ed) 2020 in dollar volume, price, and total number of homes sold.”

Northern Virginia market: Closing Out 2021

Nearly 27,000 homes were sold in Northern Virginia during 2021, which resulted in a 17% increase compared to 2020 - the largest number of homes sold in the region since 2005. This increase directly results from the escalated number of homes sold combined with rising prices and sparse inventory. 

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The average sale price of homes in Northern Virginia was $714,208 in 2021, an increase of 6.5%. The median price for homes rose from $590,000 to $620,000 in the last year - an increase of 5%. Single-family homes with four or more bedrooms saw the largest price gains, increasing nearly 12% from 2020. The year ended with an average of 19 days on the market, which saw no change from 2020.

Arlington County Experiences Huge Increases

Arlington County experienced an increase of 27% of total dollar sales volume compared to 2020. In December 2021, the detached single-family home average sales price was $1,258,648, reflecting a 17% increase. This significant jump in sales price is a direct result of meager inventory, which continues in the Northern Virginia real estate market.

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Northern Virginia Listings

Because of Northern Virginia’s inventory shortage, the fourth quarter - and all of 2021 saw a red-hot seller’s market. December’s inventory fell to a 0.4-month supply with only 1,531 homes for sale; this includes single-family detached homes, condos, and townhomes. New listings dwindled by 20% in December 2021 compared to December 2020, lessening market activity. This decrease isn’t surprising with the holiday season, climbing interest rates, and the rise in COVID cases. Compared to November 2021, December saw a 33% decrease in new contract activity.

Northern Virginia Housing Market

Overall, the Northern Virginia market remained a dynamic seller’s market. And low inventory plays a significant factor in our region’s market.

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The majority of Northern Virginia saw historically low inventory throughout the fourth quarter. Homebuyers searching for a place to lay their heads will have a smaller number of available homes. In addition to a shortage of homes, the Federal Reserve will begin raising interest rates.

It is an opportune time to take advantage of this incredibly low housing inventory for those considering selling their home.