As the D.C. real estate market drifts into deep autumn and toward the holiday season, trends that began in the late summer have taken hold. Though the D.C. real estate market inventory remains low, changes in buyer enthusiasm has shifted competition to sellers.
The result is properties are on the market a bit longer, and many sellers have dropped prices to find that sweet spot and interested buyer.
By the way, if you’re thinking of selling, here are some tips for you to stand out against the competition, check this out.
Currently, the heartbeat of the market is the economy, and buyers have adjusted more quickly than sellers have to these new realities.
In many cases for buyers, it’s all about the money and interest rates. Interest rate increases throughout the year have chipped away at buyers’ top number. The average 30-year fixed mortgage interest rate in Jan. 5 of this year was 3.4 percent, according to bankrate.com. On Oct. 19, that rate was 6.92 percent.
With interest rates climbing throughout the year, some buyers have begun looking at lending alternatives, such as a seven- or 10-year adjustable-rate mortgage. (Basically, a lending rate is locked for seven or 10 years at rates typically a bit better than a 30-year conventional mortgage, and then the rate becomes adjustable after that period.) The benefit to buyers is they can lock in a better rate than on a 30-year, but they also have time to refinance in the next seven to 10 years if rates happen to drop from today’s level. Talk to your lender about these possibilities or we can refer you to a trusted lender.
Year-to-date numbers show a bit of leveling in sale prices. In Washington, D.C., the median sold price from January through September was up 1.3 percent over the same period last year. In Arlington, the median sold price dropped a little less than 1 percent. Alexandria City saw its median sale prices drop nearly 4 percent, while Fairfax County and Prince William County continued to see home prices on the rise, with median sale prices increasing 6.4 and 12 percent, respectively. In Maryland, Montgomery County median prices were up 5.7 percent compared to a year ago, and Prince Georges County median sale prices were also up 6.7 percent.
Across the board, fewer homes were sold in September than were sold a year ago. Washington, D.C. sold 18.8 percent less than a year ago. Arlington 14.1 percent less, Alexandria City 35.6 percent less, Fairfax County 31.4 percent less, and Prince William County 29.3 percent less.
One of the areas we’ve seen a big change has been in days on market. In Washington, D.C., for example, homes averaged 30 days on market in August and 34 days in September. In Arlington, days on market increased from 23 to 29 over the same period. In Alexandria City, the jump was from 18 days in August to 25 in September. Fairfax County days on market jumped from 18 to 24, and Prince William County jumped from 15 to 21 days over the same period. In Montgomery County, days on market jumped from 17 to 22, and in Prince Georges County increased from 18 to 21 days.
Despite the evident slowing, however, homes sold, on average, at 97 percent of their original list prices in all of the regions we cover throughout the D.C. real estate market.
The market definitely remains unpredictable, though we’ve seen certain trends continue for months. For the most part, it costs a lot more to get a loan today than it did just six or seven months ago. The other “trend” factor is inflation, which has reached 40-plus year highs throughout 2022. We can’t predict where inflation (or interest rates for that matter) will be in the coming months, but we can estimate that more of the same will happen as spending and debt at the national level continue to pile up—and there are no signs of that slowing anytime soon.
But hang in there. Regardless of the economy, buyers and sellers both can still succeed if they’re tuned in to the D.C. real estate market, so stay with us for the latest.
Christopher Prawdzik and his wife Angela Logomasini are licensed Realtors® with Samson Properties in Alexandria and are members of the Northern Virginia Association of Realtors® Top Producer’s Club. Operating as D.C. Region Real Estate, they offer comprehensive real estate services, including 4½% full-service listings throughout the entire Washington, D.C. real estate market. Angela is licensed in Virginia, Washington, D.C., and Maryland. Christopher is licensed in Virginia and Washington, D.C. In addition, Christopher holds a broker license in North Carolina and is affiliated with McGary & Associates.
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