Competition among D.C.-area home buyers remained fierce in January, as the Federal Reserve contemplated interest rate hikes in the coming months.
In mid-February, James Bullard, Federal Reserve Bank of St. Louis president, called again for a short-term interest rate hike of 1 percent by July, while other Fed representatives weren’t quite as aggressive. Fueling these ruminations is a inflation explosion of 7.5 percent recorded last month. The idea is that the rate hike can put the brakes on consumer spending and keeps prices lower.
For homebuyers, this adds a bit of urgency for those who are looking to buy but also take advantage of low interest rates before an increase.
The result is continued demand pressure with inventory remaining low compared to the number of buyers out there scrambling to find that new home.
In January, the number of active listings in Washington, D.C. were down 13.7 percent compared to January 2021. It’s a story that is the same throughout the region: Arlington County listings (-41.9 percent), Alexandria City (-42.6 percent), Fairfax County (-49.4 percent), Prince William County (-26 percent), Montgomery County (-43.2 percent), and Prince Georges County (-4.4 percent).
Following close to the lower number of listings are increasing prices throughout the region, when you compare January 2021 to last month:
Washington, D.C.’s median sales price increased to $645,000 from $600,000 (7.5 percent), and the average sale price jumped from 744,545 to $804,117 (an 8 percent increase).
Arlington County’s median price jumped from $600,000 to $620,000 (3.3 percent), and average sale prices went from $713,514 to $757,534 (6.2 percent).
Alexandria City’s median price rose 1 percent to $495,000, while average sale prices dropped about 4.2 percent—from $628,924 to $602,585.
Farther into Northern Virginia, prices were still on the rise as well. Comparing January 2021 and last month, Fairfax County average sale prices increased 9.6 percent to $710,626, while median sales prices jumped 4.6 percent to $575,000. Over the same period, Prince William County average sale prices rose a whopping 12.2 percent to $503,291, with median sales prices climbing 12.6 percent to $459,500.
In Maryland, Prince Georges County continued its surge as well, with average sale prices up 11 percent to $402,299 last month compared to January 2021, and median sales prices rose 10 percent as well to $385,000.
Montgomery County, however, dropped back just a bit, with average sale prices dropping about 5.1 percent last month compared to January 2021, and median sale prices were off about 2.8 percent as well.
The big question is when the past 12 months of rising inflation might really start impacting lending rates as well as prices as we move into the heavier spring and summer real estate months. Higher rates can limit borrowers a bit, but with the heavy demand, it’s still up in the air whether prices will continue their climb.
Of course, that’s why we’re here. Please stay tuned for future market updates and information whether your plans include buying or selling a home. Don’t hesitate to reach out to us to get a customized home price analysis of your home, or an in-depth look at home sale in a specific neighborhood or zip code throughout the region.
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.
© 2022 DCRegionRealEstateNews.com
