The numbers are in!
In the table below, I've compiled highlighted some recent activity from selected DC neighborhoods. Read on to see what's happening in the overall DC housing market.
With the first quarter of home activity in DC behind us, many buyers and sellers are turning to me with questions about the future. What will happen to home prices? Will inventory level out soon? And what about interest rates – how will they impact the market?
I’d like to answer these questions and provide my own insights. I’ve helped nearly a thousand clients buy and sell homes right here in the DC market; I’ve seen it all and I have a good idea about what’s to come.
The DC Metro median sale price rose in March to $435,000. That’s a $15,000 or 3.6% increase over March 2017, and a full $25,000 increase over February 2018 (more than 6%). The rise over February prices is somewhat normal, as March tends to be one of the busier home-buying months each year. But the rise over last years’ March means that we are continuing to set new post-recession records – prices are still going up. Rising prices are driven by our light inventory; there are simply fewer properties being sold in DC, and buyers continue to compete for homes.
While prices remain high, overall sales volume is decreasing. 4,238 homes were sold in March, which is down 4.8% over last year (according to MLS data compiled by MarketStats). This is to be expected after watching sales volume steadily climb since 2014. I’ve been asked if interest rates are related to reduced sales – and my answer is that it’s unlikely. Interest rates are indeed going up, but their impact on mortgage rates has not been significant enough to dissuade buyers. Keep in mind that alongside a 0.25 – 0.5% bump in interest rates, buyers are enjoying a better job market and economy in general, making home-buying more in reach as ever since the housing crash.
This trend will likely continue into Spring, as new listings are down over last year by over 7% (and active listings are down nearly 13%). With fewer homes entering the market during the busiest selling season of the year, buyers are going to be paying higher prices and making more sacrifices. The best advice I can give a prospective buyer is to be extremely proactive.
Often, before a home is listed, the listing agent will conduct private showings to certain agents. For example, I have relationships with most of the larger DC agents, and get early access to these listings so I can prepare my buyers to make an offer the minute a new home hit the market. If you are considering buying a home, I recommend choosing an agent with a system like this in place. In today’s market, depending on the home and the circumstance, by the time a home hits the MLS it can be too late – early access to pre-market homes is the key for any serious buyer.
For sellers, it continues to be a great time to list. Of course, for downsizing or upsizing, the challenge will be to find another to move in to. In these cases, I again recommend working with an agent who has access to pre-market listings. Sellers moving out of state or entering the rental/retirement community market are positioned the best.
For more advice about your specific home or future home here in DC, give me a call. I love to share what I know about this community I love so much!