One minute Monday is, or will be, about capturing some interesting element of the Falls Church market, or area happenings in a short video form. The accompanying post, such as this one, will be here to provide additional background and caveats for those who want to know more!
Here in the City of Falls Church the idea of the $1,000,000 home is not new, and we now expect to see a fairly constant supply of them. As of this morning there were 33 total active homes for sale in the City of Falls Church (don’t forget, we’re only talking about a 2.2 square mile area). Those 33 listings represent everything from a condo for $167,500 (yes, those exist in The Little City), to homes for for over $1,600,000.
Of those 33 active homes for sale, 11 are priced over $1m. Of those 11 homes, 9 are new construction and on the market for the first time, the other 2 are resale homes. I don’t think anyone would find this ratio all that surprising.
Here, however, is the surprising number I got to in the video. Over the last 90 days of closed sales in the City of Falls Church there have been 8 closings over $1m. Of those 8, only 1 was new construction, the other 7 were resale homes. In light of the new construction ration in the active market I found this fascinating!
Now, there is more to the story than just the simple ratio. First and foremost, we are not generally talking about Apples to Apples comparisons here. Many of the resale homes price over $1m are homes that have been remodeled and expanded over time, OR aren’t that old, but were built during a time when home sizes and finishes were not quite what builders are creating today. As a result, the average asking price for new built homes is currently about $300,000 higher than the average price for resale homes.
That is not an insignificant number, after all, in most areas of the country that $300,000 alone would afford you a pretty nice home!
So, while I still find the sales ratios fascinating, we can’t really lump the new construction market and resale market together simply because the homes are prices over $1m. Builders are making homes larger, and are asking a higher price than before, which is creating a new tier in our market. This should allow for more homes that have been expanded and updated to move out of the $900,000 market and into lower $1m+ tier.
It also looks as though builders will have to continue to be patient when selling their homes. The current new home supply is about 6 months deep, and more new homes are under construction as we speak.