The Northern Virginia Association of Realtors has revised its forecast for home price appreciation in Arlington County this year to 17.2%.
The arrival of Amazon’s HQ2 prompted the revision.
“This is a market response to the Amazon HQ2 announcement with investors competing with residents for a shrinking number of homes for sale,” said Terry Clower with the Northern Virginia Association of Realtors on the market forecast.
“The price gains we foresee do not reflect an overall bubble in housing prices, but rather reflect the specific circumstances of our current market,” Clower said.
The Association’s original forecast for 2019 home price appreciation, made last November, was for 2019 price gains in Arlington County of 5.1%.
The Amazon effect has already shown itself in the Arlington market, with the median price of what sold in May— $615,000 — was up 9.8 percent from May of 2018.
“Escalating prices and a diminishing number of available homes for sale combined to cause us to revisit 2019 projections for our NVA market footprint,” said Christine Richardson, of Wiechert Realty and NVAR president.
The Association has revised its forecasts for other regions in Northern Virginia as well.
It now expects a 7% gain in Fairfax County, more than double its projection last fall.
Sellers are getting what they ask. The average sale price to list price in May throughout Northern Virginia was 99.9% and over 100% in both Arlington County and Alexandria.
The number of homes sold in the NVAR region, which includes Fairfax and Arlington counties, the cities of Alexandria, Fairfax, Falls Church and the towns of Vienna, Herndon and Clifton, reached a 14-year high in May.
Despite the anticipated demand, many potential sellers are holding out.
“Arlington inventory has fallen off a cliff,” Clower said. “[It] is expected to be down by 18.8% by the end of 2019.”
The number of available homes for sale in Alexandria is expected to show a year-end decline of 37.5%.
Owners deciding to live in their house a bit longer and then convert to rental property also raises red flags.
“I am really concerned about the number of ownership to rental conversions we may have going forward, particularly as valuations get higher,” Clower said.
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