Homes sold in December 2006 took an average of 91 days on the market to sell in Northern Virginia, compared to 38 days on the market for December 2005's home sales.

The average Northern Virginia sales price for December 2006 was $536,710, reflecting a 2.88 percent decrease from the average sales price of $552,621 in December 2005. This data heads in the right direction compared to November 2006, when the average sales price was 4.05 percent less than it was in November 2005. December was the third straight month that the month-over-the-year drop became smaller. In other words, the gap is closing.

The 2006 Year-To-Date average sales price of $537,741 shows a slight gain of .12 percent (i.e. about one-tenth of 1 percent) compared to the Year-To-Date sales price of $537,116 one year ago.

Moderate Growth Predicted for 2007 Thus Far

Although the Federal Reserve Board has raised the fed-funds rate (which influences mortgage rates) multiple times during past years, it has recently been leaving the rate alone. Some analysts predict that the Fed will lower rates in early 2007. Lower interest rates could and should spur more housing market activity, but the fear of inflation among some members of the Fed may prevent or delay any cuts in the rate. In the meantime, the nation's overall economy is poised for moderate growth and inflation stabilization.

Regarding the outlook for 2007, NAR's Chief Economist David Lereah noted, "Most of the correction in home prices is behind us, but general gains in value (this) year will be modest by historical standards."

Maxine McLeod Miller
Managing Broker
703-772-3933