December 2017 DC Housing Market Update

What a year! And what a December!

The DC housing market in December (and all of 2017) was remarkable for everyone. Every single month in 2017 boasted record high year-over-year monthly median sale prices since before the recession, and interest rates remained historically low. My sellers benefitted from excellent prices and plenty of competition for their homes, and my buyers were happy to lock in such low mortgage rates.

The following information is based on data from Elliot Eisenberg, Ph.D. of MarketStats (by ShowingTime) and the December 2017 Bright MLS housing data.

In December, the Washington D.C. Metro’s median home sale price was $420,050. That's 2.4% higher (nearly $10,000) than December 2016. In fact, the all of 2017 was up by the same percentage over 2016: an overall 2.4% annual increase to $425,000. 

In the DC area, 3,886 homes were sold in 2017. That's a 3.4% decrease over 2016 and a 4.8% decrease month-over-month for December. As we know, the market has been very hot and fewer sellers are willing to part with their valuable DC homes. As we recall from Econ 101, because of the decrease in supply in 2017 (and especially in December), the demand has certainly risen - and with it, prices. Sellers who took the leap and listed won big, and will continue to win for the foreseeable future. New listings hitting the market in 2017 were down 9.4% from 2016, and down a full 35.0% from last month. Active listings took an even harder hit - a nearly 10% decrease over last year! For the 20th month in a row, and counting, we are seeing declining inventory (year over year). This means that anyone with a well located, decently kept-up home in DC would be well compensated to part with it right now.

Another enticing reason for discerning sellers to jump of the fence is the lure of a quick and near-asking-price sale. In December, the median days-on-market for homes was just 27 days, a full two days fewer than December 2016. In my personal experience, homes tend to last just a few weeks before going into contract. Buyers are in fierce competition, and those who have lost out on a purchase are determined not to let another home slip away. Because buyers are anxious about coming in with a low offer, many are bidding at or even above asking price. According to the Bright MLS, the average home in the DC metro sold at 97.2% of asking price in December! 

So what's in store for 2018, and what's the next best move for DC homeowners? While I always hesitate to speculate, after selling thousands of homes through multiple market shifts (many wonderful, and a few devastating) right here in DC, I do have learned to trust my intuition. I firmly believe there has never been a better time to buy or sell a home in DC. Interest rates will rise eventually, but right now these low rates offer buyers a fantastic opportunity. And, yes, continually rising prices have many homeowners wondering if it's time to "get out" before a bubble bursts. I agree that it's an opportunistic time to sell, but I don't see a major crash on the horizon. The last housing boom was fueled by hoards of unqualified buyers, which ultimately shook our entire financial infrastructure. Today's rising home prices is fueled entirely by demand, and the buyers picking up homes are well-vetted by banks and supported by an economy that's shaping up to be stronger than ever. Of course, one day the inventory will level off and prices will adjust accordingly, but in my opinion, there is no looming doom.

The best advice I can give is to do what's right for you and your family. I'd love the chance to discuss your next move, and I'm just a phone call away!