N.Va. Home Sales Down in '05, But Total Volume Rises

Sun Gazette, January 19, 2006
By SCOTT McCAFFREY

To coin a phrase: It was the best of times, it was the worst of times, in Northern Virginia real estate during 2005.

Home sales across the inner suburbs declined 10.7 percent compared to a year before. That’s among the poorest performances of the real estate market in the past three decades.

And yet the average sales price of a home rose 21.7 percent during the year, the second best increase since the Northern Virginia Association of Realtors began compiling records in 1975.

Add it all up, and about $15.7 billion worth of residential real estate changed hands across Fairfax and Arlington counties and the cities of Alexandria, Falls Church and Fairfax during 2005. That’s a record high, and is approximately double the amount of revenue generated by the local real estate market a scant four years ago.

All told, 29,235 properties were sold across the region in 2005, which remains the third best sales figure in 30 years but is well below the 30,580 sales recorded in 2003 and the record 32,735 sales recorded in 2004.

Those who see the world as a glass half-full will note that the 2005 sales were higher than those posted in 2001 and 2002, which were seen as very strong years for sales growth in the region.

Those who see the world as a glass half-empty, however, will point out that 2005 is the first year since 1995 that sales totals declined across the region. That year, they dipped 12.2 percent.

The biggest decrease recorded since 1975 came in 1992, when sales declined 32.3 percent from a year before. Double-digit sales dips are uncommon but not rare; they occurred in 1980, 1982, 1987, 1989, 1991, 1995 as well as 2005.

As for average sales price, the 21.7-percent increase posted in 2005 was second only to the 21.8-percent increase a year before. No other single year has shown as much value appreciation – only 1991 (up 17.3 percent) and 1987 (up 16.6 percent) come close.

And the average price keeps rising: the average sales price recorded in December was $552,621. That’s up 15.9 percent from December 2004, suggesting that while the rate of appreciation of slowing, it is not at an end.

In the broader Northern Virginia market, which includes the outlying suburbs of Loudoun and Prince William counties as well as the inner suburbs, sales for 2005 totaled 53,576. That’s down 5.8 percent from a year before, and represents $26.7 billion in transactions.

The average sales price for the broader market in 2005 was $498,109, up 22.5 percent from the average price recorded in 2004.