It's Still a Seller's Market in the 540 ...
... but what the Trump Administration's policies may do to housing prices and availability in our area and elsewhere are anyone's guess.
By Martin Davis
EDITOR-IN-CHIEF
It’s still a seller’s market for homes in the 540, but what will happen in the coming months is anyone’s guess.
Locally, there are signs that the market is become a bit more dynamic.
“With the federal elections behind us, clients are starting to come back out and are getting ready to make moves starting as soon as the new year begins by starting their searches now,” comments Fredericksburg Area Association of Realtors Board of Directors member Denise Smith in the press release announcing November’s real estate overview.
Should interest rates drop even a little, she continues, “listings will move quickly again.”
While inventory in our region is up 16% according to FAAR, the total number of homes available has still not budged above 1,000 units. FAAR calls this number “seriously constrained.”
The most adversely affected shoppers are would-be first-time homeowners. “We are in need of more homes in first-time homebuyer range,” Smith said in the press release. “There just isn’t enough inventory in that category.”
The pressure for new homes that first-time buyers can afford is being seen in nearby Caroline County, which until recently was among the more-affordable counties in our area. However, the media year-to-date sold price in that county is up 7.4% from the same time last year, and the median sold price is up nearly $40,000 from last November. In November 2024, the median sold price was $391,500. One year ago, it was $354,000.
A January Surprise?
An issue that is beginning to be discussed is not whether the trend lines continue to hold in our region, but how the incoming Trump administration could potentially affect the housing market.
At the national scale, the answer is — it’s a “toss-up,” said Danielle Hale, the chief economist for Realtor.com, in an interview with NASDAQ.
The article notes that on the downside, “if Trump were to make good on his plans to curtail illegal immigration via mass deportations, the home construction labor force could be significantly decreased.” In addition, “Trump’s promise to implement tariffs upon imported goods could greatly increase inflation, which would further send home prices skyrocketing.”
On the upside, the article says, “Trump has also promised to reduce what he has called unnecessary regulations upon housing development, which could take as much as $90,000 off the price of a new home.”
Bottom line? The extent to which Trump affects home prices has a lot to do with the policies he opts to follow through on.
At the local scale, Trump’s threatened cuts to the federal government workforce inject another wildcard into the housing market.
The publication realestateinthedistrict.com notes that were Trump to significantly reduce the federal workforce, it “would have a major economic impact on the district, which is still struggling from the after-effects of the pandemic.”
That could prove to be the case here, as well. According to a recent report from Congressional Research Service, 13.59% of the population living in Virginia’s 7th Congressional District are federal employees.
Though the types of disruption to the federal workforce Trump is threatening have people watching, it hasn’t led to people making drastic decisions.
Alison Scimeca is a real estate agent in the D.C. market and told Axios recently that though she’s “heard from clients who are worried about their jobs under the Trump administration … she's not seeing anyone make moves yet.”
Another factor that could affect the housing market in our area is the suggestion that workers will be forced to spend more time in the office under the new administration.
“[I]t's possible that the post-COVID demand for homes well beyond the Beltway might reverse, as people move back in to be closer to the office,” Bright MLS chief economist Lisa Sturtevant told Axios.
Given the pent-up demand for homes in this area, were a significant percentage of people to sell in this area and move closer to D.C., it could prove a boon to people who have been trying to crack into our local market but haven’t been able to do so due to lack of supply.
The Local Tale of the Real Estate Tape
Follow the links below to see how real estate prices, home sales, and time on market are trending in your community.
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