A constrained supply of housing has sent prices soaring in Fairfax County, according to new data from a budding real estate startup.
The county’s median home sales price for May exceeded $1 million — $1,033,550, to be precise — which means that half of the homes sold cost more than that, Tomo reports. That’s a roughly 18% increase from the preceding six months of sales, which averaged $870,000, and it surpasses the median price of $882,000 from May 2023.
The rising prices in Fairfax County reflect a trend seen across the U.S., and there’s no indication of a reversal coming any time soon, a Tomo spokesperson says.
“While home prices may be on the rise as we head into the busy real estate season of summer, this is still a significant increase year over year accounting for seasonality,” Tomo told FFXnow. “Prices may see a slight decline as summer closes, but they will likely continue to increase overall.”
Formerly launched in February, Tomo was started by former Zillow executives Greg Schwartz and Carey Armstrong, who built an OpenAI-powered platform to help match buyers with potential homes based on their provided preferences.
According to Will Begeny, an analyst for Tomo, a variety of factors could be contributing to the current high prices in Fairfax County, including a limited amount of available housing and new construction in high-demand areas.
There were 694 homes sold in the county this month, just shy of the 700 home sales recorded in May 2023, but closings increased significantly in the final week. By May 22, only 272 homes had been sold, per Tomo.
Begeny said sales had generally slowed down over the past year, primarily due to high interest rates on mortgages.
“A big part of it honestly is people who don’t want to move, so if there’s areas that are in high demand but you have very few people who are leaving that area, then the prices in that area tend to skyrocket above everywhere else,” Begeny said. “…If you’re living in that area, it can be great, because you just keep seeing your prices go up and up and up every year, and that might get you into a really happy retirement, but if you’re trying to move to that area, it’s very hard to kind of break in, so to speak.”
Proximity to transit is “a major driver” of demand, since it attracts residents and development, he says. While additional housing along Metro’s Silver Line corridor in Tysons or Reston, for example, should help ease prices overall by expanding to the region’s inventory, the new units themselves might cost more than average.
Fairfax County leaders have made affordable housing a priority in recent years, setting a goal in 2022 of adding 10,000 more units by 2034. However, creating for-sale affordable housing in particular has proven to be a challenge, prompting the county to consider adjusting its income eligibility range for workforce housing.
Ultimately, to get more affordable units, there needs to be more housing built in general, Begeny says, adding that “community-level pushback” to development that some see as changing the aesthetics or character of their neighborhood tends to “stall a lot of what would be good-intentioned programs.”
He also suggests that developers and home sellers could be more accepting of Federal Housing Administration loans and other financing options that would help people buy housing at a more affordable rate.
“As we as a community start to recognize that we have to accommodate people who are trying to live, it will help us greatly to be more thoughtful and respectful of people trying to move in with the best loan product they can get,” he said.
Though the rising housing prices present an obstacle to aspiring homeowners and current ones, who keep seeing their taxes climb, there may be one silver lining: it suggests people are still interested in moving to and living in Fairfax County.
Begeny describes the county as one of the markets most representative of “everything that’s happening in real estate in the country,” as a suburb that’s closely connected to a major urban city but not entirely dependent on that city for jobs.
“You don’t want to see sort of the depleting interest over time, and I think that healthy market is a really positive indicator for what’s happening in Fairfax,” Begeny said. “…It’s showing that people are not abandoning cities entirely. You have young families who are trying to find their own place, and they’re also still being connected to major market areas.”
This story has been updated with the final number of homes sold and median price for May 2024 reported by Tomo.
