March real estate figures continued to show positive signs as homes remained affordable and mortgage rates remained favorable.
Data show an increase in the number of high-end homes sold, suggesting move-up buyers were entering a real estate market perceived to be more stable. Those move-up buyers are snatching up homes from empty nesters seeking freedom from home maintenance and the opportunity to enjoy retirement — including new city lifestyles where shopping, entertainment and culture area all within walking distance.
Area sales remained flat or down across the region over the same period in 2010 but that reveals more about the huge effect of last year’s tax credit and its effect on the market than about current sales. Sales activity is actually trending more favorably for homes above $750,000, suggesting a market growing on its own without the need of a government assist.
“We’re seeing a healthy increase of 12 percent to 14 percent in contract activity for the upper brackets in the first quarter of 2011,” said David Howell, executive vice president of McEnearney in Alexandria. “In Montgomery County, D.C. and Virginia, 50 percent of the listings above $750,000 are on the market for 30 days or less.”
Howell cited continued growth in the region’s economy, jobs, consumer confidence — and a desire among aging baby boomers to downsize — among the reasons for the increase. He also stressed pricing as a factor for sellers. “It’s really important for sellers to get it right,” he said.
Overall, sales were down by 8 percent in Northern Virginia across the board in March based on Metropolitan Regional Information Systems data. The average sales price in March increased by about 3 percent from March 2010 to $448,957.
“Sales prices for higher end homes in Northern Virginia are tracking the same as last year, when we had the tax credit as an incentive,” said Jill Landsman of the Northern Virginia Association of Realtors. “This a concrete sign of a recovering market that is stabilizing on its own firepower.”
In Fairfax County, 191 homes sold for more than $600,000 in March of 2010 while 193 homes sold in that range last month. Second only to Loudoun County, Fairfax residents have the second highest median average household income in the nation. Landsman said the move-up buyer, faced with rising fuel prices, is looking to be closer in to jobs and amenities.
“My agents are listing more and more for people who are moving up,” said Jon Wolford of Long & Foster in Springfield. “The numbers in the upper ranges continue to improve and they [also] include nesters looking to downsize. We are continuing to see the healing process take place.”
Washington sales above $750,000 increased by 24 percent based on March MRIS numbers, despite a dip in overall sales of 4 percent. Data show 254 single-family homes sold through March of this year while 205 sold last year during the same stretch. In the $1.5 million and above category, activity has increased by 46 percent over last year.
One reason for the growth is that financing for upper bracket properties has been easier to obtain.
“We have good financing now for more expensive homes,” said Donna Evers, president of Evers & Co. in Washington. “A lot more banks have set up units for handling higher loan amounts and there are many more products available. You can borrow up to $2 million. At these interest rates, people would rather borrow.”
In Montgomery County, overall sales were down in March by 14 percent compared with the same time in 2010 but sales increased 23 percent for properties above $1 million.
“We’re seeing a burst of energy and activity in March,” Evers said. “We are past bottom and it’s going in the right direction. Being on the other side of the bottom is what makes the market move. We’ve turned the corner.”
Evers predicted property values will increase and that prices will be a bit more expensive by June and said people need to consider both the buying and selling parts of the equation when determining the best time to act.
