Housing costs jumped nearly 14 percent in Northern Virginia between January 2019 and January 2020, according to statistics recently released by the Northern Virginia Association of Realtors.
Prices in the region have trended upward since 2016, NVAR Immediate Past President Christine Richardson told The Center Square in a phone interview. After Amazon announced in 2018 it was moving its second headquarters to Arlington, housing prices started rising at an even faster rate.
Amazon coming to the region will lead to additional development, Richardson said. Because more development leads to rising housing costs, many potential buyers are trying to buy homes more quickly, while potential sellers are trying to hold onto their property until the prices increase more, she said. This has created lower-than-expected inventory, she said.
Lower interest rates, Richardson said, also have contributed to people trying to buy houses now.
The average cost of a house in Northern Virginia rose to $642,565, which is a 13.72 percent increase over January 2019. The median cost went up to $520,000, which is a 5.05 percent increase. Total home sales went down by 5.59 percent.
“With falling interest rates and rising mortgage application rates, prospective home buyers in Northern Virginia joined the ranks of others across the U.S. in January hoping to take their housing dollars further,” Ryan Conrad, CEO of the Northern Virginia Association of Realtors, said in a news release. “Buyer interest, combined with a limited number of homes on the market, kept our NVAR Realtor members busy in a traditionally slower time for home buyers and sellers.”
This good news for the housing market, however, sometimes can create problems for affordability, Richardson said. Localities have been trying to provide affordable housing options for Virginians, especially after the Amazon announcement.
“Our region is experiencing growth in population, as are many metropolitan areas across the country,” Anne Venezia, the acting director for the Arlington County Housing Division, told The Center Square in an email.
“We benefit from a growing job market and thriving economy. However, because demand for housing is so high, our existing housing supply is strained,” Venezia said. “These challenges were identified prior to Amazon’s decision to arrive in Arlington. The county is mitigating this by taking steps to address supply, access and sustainability. Two county efforts specifically address these challenges – our Affordable Housing Master Plan and the Housing Arlington program.”
The county also launched the Housing Arlington program in spring 2019. It includes six initiatives designed to increase affordable housing options. This includes planning and land use tools, financial resources and public-private partnerships.
As part of Amazon’s agreement with Virginia and Arlington, the company also will provide funding for affordable housing initiatives.