Alexandria’s real estate market continued to trend upward during the first quarter of 2024, with strong demand from buyers and a competitive sellers market. This data-driven analysis dives into key metrics to understand Alexandria’s current market conditions and potential future trends.
Market Summary
- Inventory: Inventory levels remained low throughout Q1 2024, reflecting high buyer demand and limited housing options. This trend is expected to continue in the near future. The Alexandria Housing Market remains very competitive. On average, homes receive at least four offers in an approximate time frame of 20 days. Last month, the median price of homes on sale in Alexandria was $706,000. Two hundred eighty-two homes were sold in April, up from 265 home sales in the same period last year.
- Sales Prices: Median sales prices rose significantly compared to Q1 2023, indicating a seller’s market with strong competition among buyers. In fact, the sale price is 68% higher than the national average. Also, the overall cost of living is comparatively 31% higher in Alexandria.
- Days on Market: Homes are selling quickly in Alexandria, VA, with the average days on the market decreasing compared to the previous year. The average time for homes getting sold here is 19 days. In fact, many houses get multiple offers, some with the contingencies waived.
- Interest Rates: While interest rates are projected to rise in 2024, they remained relatively low in Q1, further fueling buyer activity.
Inventory Analysis
Alexandria’s inventory levels were much lower in Q1 2024 when compared to Q1 2023 side by side. This trend is a strong continuation, indicating that this is a market grossly favoring sellers. Fewer homes available mean buyers face more competition, which often results in bidding wars that drive up sales prices.
Other contributing factors to the low levels of inventory include the limited availability of buildable land within city limits and homeowners staying in properties for a longer period of time due to affordability and the desire to stay in an established neighborhood. This trend of low inventory will continue through 2024.
The inventory has changed at different levels. According to the bedroom types, here’s an analysis of how the inventory has changed in the Alexandria real estate market –
The inventory has increased by 31.4% compared to the last period for the one-bedroom homes. The rise in inventory for the two-bedroom houses has been close to 11.6%. Three-bedroom houses have seen the biggest surge in the inventory, with a 33.8% rise from before. 4 bedroom homes have a 31.9% increase in inventory. The increase in inventory in different types of homes in Alexandria shows that the housing price can be impacted by this high level of increase in inventory.
Sales Price Trends
The median sales price of homes in Alexandria surged in Q1 2024. Growth reflects a strong sellers’ market and high buyer demand. With inventory low, buyers are willing to pay a premium just to get the property they want. The data reflects a continuous increase in the sale prices in the coming quarters.
Now, if you want a quick overview of the sale price trends, then here’s what it looks like – the median sale price for a home in Alexandria was $760K last month, which is 17.4% up since the last year. The per-square-foot median sale price in Alexandria is currently $406 – a 2.3% rise since the last year.
Days on Market
Another critical benchmark is the average number of days a property is on the market before it sells. In Alexandria’s Q1 2024 market, homes sold much more quickly than they did during the same period last year. This points to a very competitive market where buyers are ready to pounce if they are going to secure a property.
The average days on the market this month was 14 – which is comparatively lower compared to last year, which was 19. This is a decrease of days on the market by 26%. It’s safe to say that the properties are getting sold quicker than ever.
Interest Rate Impact
Interest rates are a major determinant of buyer purchasing power and, hence, overall market activity. Although interest rates are likely to rise throughout 2024, in Q1, they were still relatively low, helping to enhance the already strong buyer demand seen in the Alexandria market. Over the coming months, as interest rates continue to rise, there could be some moderation in this buyer activity.
May 19, 2024, data shows the weighted average cost of capital of the Alexandria Real Estate Equities was at 8.55%.
Market Forecast
Alexandria Real Estate Market Outlook: The real estate market will be competitive throughout 2024. A glance toward the future:
Inventory: Inventory levels will likely remain low, favoring sellers potentially leading to further price appreciation.
Sales Prices: The median sales prices should continue increasing, but the rate of price increase may slow down during this quarter compared to Q1 2024 as interest rates rise.
Days on Market: Homes are expected to continue selling quickly, with buyers acting swiftly to secure properties.
Local Market Considerations
While the overall Alexandria market exhibits strong seller dominance, there may be variations within specific neighborhoods or property types. It’s crucial to consider these factors when making informed real estate decisions:
- Location: Certain neighborhoods within Alexandria may experience higher or lower demand compared to the city as a whole. Proximity to amenities, schools, and transportation can significantly impact property values.
- Property Type: Single-family homes, condos, and townhomes cater to different buyer preferences and budgets. Analyzing trends within your desired property type can provide valuable insights.
Bearish Highlights
- The average real estate basis subject to capitalization has lowered by 14% from the first quarter of the last year.
- Also, market rents are forecasted to stay flat because of the lower supply of new buildings.
Bullish Highlights
- The life science industry is seeing massive growth with more venture capital investments, M&A, and follow-on-financing. This company has a decent development pipeline and a high rate of occupancy.
- The mega campuses of Alexandria provide a competitive advantage with very little competition from unleashed supply.
Final Thoughts
Alexandria’s real estate market in Q1 2024 reflected some strong buyer demand and intense seller conditions. Low inventory, rising sale prices, and quick sale times defined the market. Although rising interest rates may bring in a slight moderation, it generally forecasts the overall market to still remain seller-friendly through 2024.
Buyers take necessary steps to keep up with market trends, secure pre-approved financing, and work with a qualified real estate agent if needed to help themselves sail through such a competitive environment. With all this data at hand and knowledge of local market dynamics, buyers and sellers will be able to make well-informed decisions in the dynamic real estate market of Alexandria.
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