The D.C.-metro real estate market continues its recovery, having reached its highest September median sales price in six years, according to Real Estate Business Intelligence (RBI). Although the supply of houses for sale remains tight, listings increased 16.5 percent from this time last year, and homes averaged 17 days on market before going under contract this past September—the lowest number of days on market since 2005, reports RBI.
However, according to Zillow economist Stan Humphries, the market is hot, but cooling. Humphries says a little cooling is good, explaining in a press release: “If home values continued to rise as they have, relatively unchecked, we would almost certainly be headed into another bubble cycle, and nobody wants that.”
The market may be cooling, but we should not fear “unchecked growth” because the housing market collapse was not growth driven. A host of factors played key roles as pointed out by economist John Berlau, a senior fellow at D.C.’s Competitive Enterprise Institute, in a recent article.
Still, today’s market is not like 2005, despite the recent improvements. Sellers are clearly getting back some equity, and competitively priced homes are selling quickly—sometimes with multiple offers. But some sellers are asking too much, and those houses aren’t moving. In addition, federal budget issues raise concerns for both sellers and buyers, particularly in D.C. However, there are reasons to remain optimistic that things will continue to improve, at least modestly, in the year ahead. Along with considerable appreciation in D.C. and around the nation, forecloses are down, interest rates remain low, and getting a loan has become little easier.
D.C.-metro buyers remain in a good position with historically low interest rates (even given recent increases this year), and there are not nearly as many frenzied bidding wars as there were in 2005. In fact, buyers who move quickly with offers on well-priced homes have a good shot. Moving into winter, its an especially good time for buyers to look for deals before the market heats up as it usually does in spring.
