Last month, we reported that despite economic uncertainty, widespread Federal job cuts, mortgage rates, and the imposition of high tariffs, the residential real estate market in Northern Virginia remained surprising strong, with home values and transaction activity increasing month-to-month and year-over-year.  This was despite anecdotal evidence from our firm and others of real estate contracts being voided or home searches placed on hold due to buyers losing government-related jobs or dealing with job uncertainty.

Real estate statistics for the month of June have been released, and they show a market that is now slowing.  Nearly every metric — transaction volume, average sales price, days on market, and sales price as a percentage of list — has moved in a negative direction, indicating a slower market.

To be fair, the Northern Virginia real estate market remains healthy.  Average days-on-market is 19 — far below the 30-60 day range expected in a typical market.  And average sold price remains above 99% of list price.  If anything, we would describe the market as moving more toward a state of equilibrium between buyers and sellers, rather than the extreme sellers’ markets of the past few years.

How many jobs have been lost in Northern Virginia so far?  According to the Bureau of Labor Statistics, the federal government lost 59,000 positions.  Research done by Fairfax County provides an estimate of about 14,000 job losses among Northern Virginia residents.  This is a small fraction of the 1.7 million Northern Virginians currently employed.  And as of May, the Northern Virginia unemployment rate remained at a low 3.3%.

But indirect effects could deepen the impact of the Northern Virginia job losses.  The above job loss numbers don’t include federal government contractors.  Several large contractors have implemented hiring freezes or initiated job cuts.  Additionally, federal job cuts can reverberate through local economies, affecting service, retail, and hospitality businesses that rely on revenue from federal workers.

We’ll continue to keep you posted on the Northern Virginia real estate market and the local economy.  And at any time, we’re happy to answer your individual questions on real estate matters.