Northern Virginia is fortunate to have the fundamentals to be one of the top real estate markets in the country. Residential real estate prices in the area had declined considerably in many areas over the past few years but have likely bottomed in 2009. The demand for real estate in Northern Virginia continues to be on the rise because of the strong job markets of Washington, D.C. and the surrounding areas. Many new corporate headquarters such as the offices of Northrop Grumman, SAID, Volkswagen, Hilton and Merck have recently moved to Northern Virginia bringing thousands of families to the suburbs. Contributing to the demand for residential real estate in Northern Virginia are the many students and faculty of several Colleges and Universities in the area, including; George Mason University, Marymount University, Northern Virginia Community College and the graduate and part-time student satellite campuses of Virginia Tech and the University of Virginia.
Now is a favorable time to invest in real estate in Northern Virginia. Property values are affordable relative to recent years and are expected to rise over the next several years as jobs continue to be created here locally. Additionally, mortgage interest rates are near all time lows which enable investors to capture higher returns on their investments. Inventory numbers are down as more homes are selling than are going on the market. The inventory levels are down this week 54% from the same week last year and are down 70% from two years ago. New construction home builders are also reporting increased activity and sales in recent months. There is currently only a 2.5 month supply of homes in all of Fairfax County, Loudoun County, Prince William County, Arlington County, Fauquier County, Alexandria City, Fairfax City, Falls Church City, Manassas City and Manassas Park. For rental properties in these areas, there is only a 2.1 month supply which adds to the housing demand.
In a recent Forbes article it was also noted that the premium for rent versus mortgage payments helps determine when an area is determined to be a good buying opportunity – well here is an excerpt from this article:
For people who want to own a home, the premium to buy—the spread between what they’d spend to rent and what they’d pay for a mortgage—is much lower than the 15-year average in many cities.
To determine what cities are smart buys, Forbes magazine computed the premium and also identified locales where economists predict home prices will go up the most over the next five years.
Here are the top 10 cities the magazine chose as the best places to buy right now.
- Boston-Cambridge-Quincy, Mass.
- Charlotte-Gastonia-Concord, N.C.-S.C.
- Chicago-Naperville-Joliet, Ill.-Ind.-Wis.
- Cincinnati-Middletown, Ohio-Ky.-Ind.
- Denver-Aurora-Broomfield, Colo
- Minneapolis-St. Paul-Bloomington, Minn.-Wis.
- Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.
- Portland-Vancouver-Beaverton, Ore.-Wash.
- San Francisco-Oakland-Fremont, Calif.
- Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V.
As a “Top Ten City”, we are even more encouraged to recommend buying in Northern Virginia.
Two particularly “hot” areas of expected property value increase over the next few years are the neighborhoods of Herndon which are located within a two mile radius of the future Herndon-Monroe stop on the Silver Line of the Metro and the neighborhoods of Dumfries which are in close proximity to Fort Belvoir. The current Silver Line project was secured by federal funding in December 2008 and will be completed in two phases between 2013 and 2016. With easy access to public transportation, there will be more demand for housing in Herndon. In 2005, the Defense Department announced that it would be shifting 18,000 jobs to Fort Belvoir. This increase in jobs will cause more of a demand for rental properties which, in turn, will keep inventory rates down, force rental prices up and property values to rise.
We believe that investors with a long term outlook on real estate will be well served by investing today in Northern Virginia. If you have any additional questions or concerns, feel free to call …
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