Northern Virginia Home Inventory Falls to 4-Year Low

• July 21, 2009

by Will Smith

The total available for-sale housing inventory in Northern Virginia is at its lowest point in four years, reports the blog Northern Virginia Housing Bubble Fallout. According to statistics from the region’s multiple listings service, the number of available listings on the market is approximately 7,500. In 2006, the available inventory was almost three times that.

Northern Virginia is defined as Alexandria, Arlington, Fairfax City, Fairfax County, Falls Church, Loudoun, Manassas City, Manassas Park, and Prince William. In the outside-the-beltway counties of Loudoun and Prince William, available inventory is actually below July 2005 levels, further evidence that while those regions were hit first and hardest by the housing collapse, they have also rebounded the quickest.

There are two schools of thought on the Northern Virginia housing market. Some believe that it is well on its way to recovery, and that statistics like these prove their case. Skeptics argue that the current housing inventory numbers are overly optimistic because they do not include the “shadow inventory” of foreclosed homes that banks have yet to put on the market.

Below is a graph from VirginiaMLS.com of the available inventory for each of the nine cities and counties in Northern Virginia from August 2005 to the present. It shows how inventory swelled from 2005 to 2007, only to plummet beginning in early 2008.

Too small? Click here to expand.

7 Comments

1. Brandon Green said at 8:56 am on Wednesday July 22, 2009:

   Count me amongst the Washington, DC, real estate watchers who think the Northern Virginia market has hit the bottom.

1. Lauren said at 11:43 am on Wednesday July 22, 2009:

   Interesting that the closer to DC, the lower the percentage of homes that are under contract. (Might have something to do with the fact that the further away from DC, the more prices have fallen…)

1. Georgetowner said at 1:49 pm on Wednesday July 22, 2009:

   And count me among the people that is totally perplexed by this chart.

   For one thing, it only goes back to 2005.  How about a chart that at least goes back to pre-bubble days so we can have a more meaningful way to interpret the chart. 

   Finally, this chart does not give you housing inventory available per capita or total.  It gives you the percent of active listings as a proportion of available listings.  Maybe I’m just being retarded, but I don’t see how you can use these numbers to claim that inventory is at its lowest.

   Suppose you have 2 billion listings yet 90% are pending.  That doesn’t mean that inventory is at its lowest.

1. Finn McCool said at 4:27 pm on Wednesday July 22, 2009:

   The chart is simply stating that there is less available houses on the market since 2004.  The theory goes that less inventory= increased demand and thus….drum roll…RISING PRICES.  Hang one everyone this could get interesting.  Cheers.

1. John said at 5:35 pm on Wednesday July 22, 2009:

   I don’t see how this chart proves there is less inventory. There are plenty of inactive homes that are actually available but not yet listed on the MRIS. They are vacant, bank owned properties that are available right now (if you know the bank and who to contact) and they are about to be listed anyway.

1. Will Smith said at 6:48 pm on Wednesday July 22, 2009:

   To Georgetowner, you’re right that this graph doesn’t show absolute values but rather percentages. The ratio of available homes to total listed homes is an important metric that indicates demand. A low percentage of available homes means that demand is strong; a high amount means the opposite.

   What would have been better to publish is graphs of the inventory in absolute numbers. I’ve linked them below for each city/county.

   You’ll note that for the most part absolute inventory has dipped below July 2005 levels (Alexandria and Arlington are exceptions).

   Alexandria City - http://www.virginiamls.com/charts/Alexandria.htm
   Arlington County - http://www.virginiamls.com/charts/Arlington.htm
   Fairfax City - http://www.virginiamls.com/charts/FairfaxCity.htm
   Fairfax County - http://www.virginiamls.com/charts/FairfaxCounty.htm
   City of Falls Church - http://www.virginiamls.com/charts/FallsChurch.htm
   Loudoun County - http://www.virginiamls.com/charts/Loudoun.htm
   City of Manassas - http://www.virginiamls.com/charts/ManassasCity.htm
   City of Manassas Park - http://www.virginiamls.com/charts/ManassasPark.htm
   Prince William County - http://www.virginiamls.com/charts/PrinceWilliam.htm

1. Will Smith said at 6:49 pm on Wednesday July 22, 2009:

   To John, I noted that shadow inventory means the published inventory statistics can’t be totally accurate. The question that no one seems to know the answer to is what the actual volume of shadow inventory is. Is it so much that it could push down prices, or not?