Source: Wikipedia.
As the capital of the United States real estate will always be in high demand in Washington, D.C. – there are many jobs here, and a good quality of life, so even during recessions the real estate market is usually prone to staying fairly stable. Right now this is remaining true – there are a third fewer homes listed in D.C. than this time last year and with less inventory median list prices are rising and median days on market are falling. Washington, D.C. is in the midst of a very strong sellers market.
Over a Third Fewer Homes Listed
It’s surprising to hear that today there are 33 percent less homes listed for sale in Washington, D.C. than there were this time last year. That’s a large drop from a total inventory of 1,662 to just 1,117 today, though today’s figure is actually an improvement over last month, rising by 3 percent from the total inventory of 1,085 then. Even so, a drop of 33 percent is major news. So how has this affected the market?
Well, as you might expect homes are selling faster right now. One year ago it was taking an average of 52 days on market to sell – which is pretty quick compared to median days on market in many U.S. cities – and now it’s just 36 days having dropped 3 percent from just last month when that figure was 37.
With fewer homes listed buyers have to make faster decisions on purchasing before another buyer comes along and snaps the property up! If there are the same amount of buyers in Washington, DC than there were this time last year, but 33 percent less inventory, this is going to push prices up, and that’s exactly what’s happening.
Prices Are Rising Fast
Already there’s been a 6 percent rise in median list price from last month, increasing from $470,000 to $499,000, but from this time last year there’s been a more alarming 20 percent increase as the median list price then was just $415,000 then. Interestingly, the median price per square foot hasn’t actually changed that much – at $436 per square foot it’s exactly the same as last month, and only a 4 percent rise from last year when the figure was $419 per square foot.. This could mean that there’s a larger number of bigger and generally more expensive homes listed right now, which could be bad news for first time home buyers.
Still, there’s no getting away from the fact that there are less homes listed overall and this is making Washington, D.C. a seller’s market. Now would be a good time to list your home as it’s likely you’ll sell quickly and may end up with an offer over asking, or multiple offers.
Mortgage Rates Climbing
The Washington, D.C. market could be good news for buyers as well if mortgage rates were going down, but they’re not. Having reached a two year low around the end of 2012 mortgage rates in DC have been steadily going back up over the first half of 2013 with a few peaks and troughs in the rates. The last low was at the beginning of May but today rates have risen to 3.49 percent, which is 6 basis points lower than the national average. If rates are going to continue to climb upwards, buyers may want to fix in good rates while they can, but it’s a difficult situation with fewer inventory and rising real estate prices – finding the right level and time to buy could be a challenge.
