Typically the third quarter, or summer, is the least impressive for buyer activity in our Northern Virginia market. Post Labor Day, activity picks up. Why is that?
Sellers often logic that as long as school is out of season, that is the best time to list their homes. After all, parents will want to be settled before school starts, right? The reality in July is that families with school age kids tend to focus on things they can’t do when the kiddos are in school. When summer vacation arrives, that usually involves travel. When you tend to see pictures of smiling faces on the beach or other vacation destinations, buyer traffic is low.
Once school is back in season and buyers are back in their usual daily grind, the activity picks back up. By the fourth quarter, emotions are focusing on home as daylight hours wane. Pinch points come more into focus as buyers are spending more time inside their homes. Maybe the need another bedroom, or desire a larger family room or home with a basement. Some buyers may realize that they have too much space and long for something cozier.
Another factor, which is the biggest factor fueling the fourth quarter, is family. “Home for the Holidays” is a powerful force. Home buying is an emotional decision and there is no more emotional time than the year end holidays. And the number one reason people move is to be closer to friends and famil.
The final reason our area typically sees more activity is that October is the start of the fiscal year for our Federal government, the largest direct, and indirect, employer in the area. Jobs are created. Raises given. Very rarely does our Federal government actually do anything to limit their spending.
Where we find ourselves in the fourth quarter of 2026 is in a market that has shifted rapidly from a seller favored market to a more stable market. The change has been abrupt enough from the euphoria sellers had been facing in years of previous conditions, that it may feel like a buyer favored market. Not quite yet.
Uncertainty the war in Iran and the resulting spike in gasoline prices, is putting a major damper on consumer confidence. Throw in a heated mid-term election and it isn’t hard to see why people are on edge. Add to all that the fact that mortgage interest rates have increased 1% since the end of July and buyers who were already struggling with rising prices, are now having their affordability substantially impacted. (At the time of this article the 30 year fixed rate is over 7.5%.) After all, most of a buyer’s mortgage payment is interest until well into the halfway point of the term.
The result is three fold in our Northern Virginia market at the moment.
- More and more properties are entering the market
- Days on market for listed properties is dramatically increasing from the single digit days sellers enjoyed for years
- Home values are softening as a result
The predictions for the early 2027 market is that mortgage interest rates will level our from 6.5% to 7%. What will happen with the war and gasoline prices is well beyond my area of expertise.
If you are a seller entering the market, know that sales happen every month of the year. There are always people that need to move. Marketing strategies will be different. Hopefully, any seller looking to list finds an agent that has lived through more than the seller favored conditions we had been experiencing since 2019 and knows how to adjust advice accordingly. It’s not the end of the world, just a typical market shift.
If you are a buyer entering the market, there are options to keep your payments down for the first two years. Working with an experienced agent who has experienced stable and buyer favored markets will be immensely helpful in your house hunt.
The real estate market is constantly changing. Trying to time a sale or a purchase for optimal conditions is not a strategy that will work. Selling when the market is high means you have to compete in that same market. Buying when the market is down means higher rates, since that is a major force driving home prices. The time to make a move is when you need to make a move to better support your lifestyle. Moving closer to family, becoming a home owner and building wealth, getting more space for your family, right-sizing to a more manageable home or moving for work are all reasons to set up your no-obligation consultation with me today. I promise, it won’t hurt it a bit for us to talk.