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May 2010 Market Update for Springfield, Lorton, Alexandria and Kingstowne

Here is a market update for our areas of Alexandria, Kingstowne, Springfield and Lorton for May 3, 2010.

The information I am sharing statistically comes straight off of the MLS system we use every day, which is called MRIS, the Multi Regional Information System.

Right now interest rates are still low. They just dropped a little to 4.875% with no points. Now always remember that if you are going to check out interest rates with lenders, they change every day. So, if you are comparing rates, make sure you get the quote from everybody you plan to talk to on the same day.

Let’s get started:

In all of Alexandria, there are 1225 properties on the market. Out of these 446 are detached, 333 are townhomes, and 444 are condos. If you add those up you get 1233, but remember a few of the townhomes are condo form of ownership.

407 of the detached homes are under contract. 454 condos are under contract, and 376 townhomes are under contract. This shows a very high absorption rate. Only time will tell if the expiration of the tax credit will have a lasting impact on our local market. We believe it’s more about interest rates and inventory, and certainly confidence plays a big part.

While properties that are overpriced or don’t show well are sitting, the good ones are getting a lot of attention. The under contracts are a little deceiving. Some of them are short sales or foreclosures and will take some time to work their way through the system. Some short sales actually go to foreclosure if the process drags on too long and the buyer becomes frustrated and moves on to another property. Things are getting a little more streamlined with this process thankfully.

In the Kingstowne area, which we’ll call zip codes 22315 and 22310, there are 182 properties for sale. There are 204 under contract. Again, we’re seeing a very high absorption rate. Out of those, 71 detached homes are available, 76 townhouses, and 36 condos. When you look at the under contracts, you see 76 single family homes, 101 townhouses and 28 condos. That number of 182 available homes is a very workable number. In the fall of 2007 that same number was 489 and prices were in free-fall, so you can see how our market has changed for the better!

Now let’s look at Springfield. There are 198 total homes for sale. There are 355 under contract. There are 132 detached homes available and 224 under contract. On townhouses, there are 53 available with 115 under contract. There are 14 condos for sale and 22 under contract. What we have seen in the last year is the move-up buyer getting back into the market. That has cleared out a lot of excess inventory, and made prices turn around because the really good properties are getting multiple interest.

If we turn our attention to Lorton, we see more of the same. In Lorton, which is zip code 22079, we see 77 available homes, with 51 single-family, 22 townhomes, and only 5 condos. There are 175 homes under contract. Out of those, 68 are detached, 88 townhomes and 23 condos. Very interesting numbers. Again, those of us who live here and are rooting on the market, we hope the highest number possible of those under contract do go to settlement. Lorton is an area that was hit hard by short sales and foreclosures. Many people had purchased new properties hoping to flip them for nice gains when construction was completed. It didn’t work out well for a lot of them. As the inventory declines, it will enable prices to continue their recovery. Appraisers are still in many cases being conservative, but this is expected with the meltdown we experienced between 2006 and March of 2009. We believe Lorton will be helped by the influx of newcomers to the area with the Fort Belvoir BRAC.

Following the numbers gives us the pulse of the current market and helps us to sense when changes occur. When the market changes and negative things happen, like mid 1990 and the end of 2005, they happen quickly. Right now, we like the direction we’re in and hope we can continue. Stay tuned.