Limited inventory drove pretty much all of the 2021 real estate market, but how might internal and external market forces influence 2022? It’s tough to say at this point. If interest rates remain low—they’re around the 3.6 percent and have crept up in the past few months—and inventory remains as tight as it’s been the past couple of years, we may see a continuation of the recent past. But if factors such as high inflation can have significant impact on the market.
In 2021, the year ended with an inflation rate of 7 percent—a point the country has not seen since 1982. Eventually, such a pull would likely impact interest rates, which might start to climb.
Still, we’re not there yet. We’re coming off a particularly strong year for sellers, while those low interest rates kept a lot of buyers in the game as well.
Washington, D.C. was pretty hot, with average sale prices increasing more than 8 percent over 2020. Arlington County and Alexandria City were strong but average sale prices stayed pretty much the same from one year to the next. In Fairfax County, prices were up 8.7 percent over 2021, and Montgomery County saw prices increase almost 10 percent.
The real story for strong sales however, was a little farther out from the D.C. epicenter. Likely influenced by buyers seeking maybe a little more space and changes in telecommuting as a result of COVID-19, Prince William County continued it’s strong showing in the region. Average sale prices in the county were up 12.7 percent last year over 2020, reaching $503,561.
Prince Georges County also finished strong with average sale prices up 10.8 percent over 2020.
The entire region continues experiencing low inventory, and if interest rates stay low, we could see home sales competitive as we move into 2022.
We’ll continue to watch the market and how external forces will shape the coming year, so stay tuned.
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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