Home prices continued their upward trajectory throughout the region in May, but Fairfax, Prince William, Montgomery, and Prince Georges counties are winning the prize as most competitive. With low inventory, stiff competition, and rising prices in May, it’s making a lot of sellers happy but has been a bit frustrating for buyers. A bright spot for buyers—despite rising inflation—is that interest rates remain relatively low.
Washington, D.C. home prices last month were up about 6.5 percent over May 2020. In Arlington County prices were up 17.6 percent between the two periods, and Alexandria City saw prices up nearly 16 percent. As you get a bit farther out from D.C., the price jumps continue. Fairfax County prices in May were 16.3 percent higher than May 2020. Comparing the same two months in Prince William county, prices were up a whopping 21.4 percent. Montgomery County was up 16.7 percent, and Prince Georges County prices were up 16.2 percent.
The inventory picture for May was mixed. Inventory in Washington, D.C. was up 13.8 percent over May 2020, up 107.5 percent in Arlington County, and up 61.5 percent in Alexandria City. Those areas saw little change in days on market compared to May 2020 as well, with the average days on market of 23 in Washington, D.C. compared to 25 days last year. Arlington County averaged 19 days on the market, and Alexandria City averaged 15 days—both unchanged from May 2021.
But the pent-up demand a little farther out remains quite palpable. Fairfax County days on market was just 11 last month compared to 16 in May 2020; Prince William County average days on market was just seven, compared to 17 in May 2020; Montgomery County dropped from 23 in May 2020 to 16 days last month, and Prince Georges County days on market dropped from 26 to 13 over the same period.
While we’re seeing some anecdotal evidence that the stiff competition is subsiding a bit, particularly in D.C., Arlington County, and Alexandria City, there’s no doubt that summer sales continue favoring sellers throughout the region.
Still, economic trends continue moving, and we’re keeping an eye on inflation, which jumped to 4.2 percent in April and topped out at 5 percent in May—a single-month height not reached since August 2008. Are these the seeds of a long-term sea change? That remains to be seen, but home prices, lending rates, and buying habits are sure to react to economic conditions that impact the value of the dollar. Stay tuned for updates as we move into the third quarter.
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 serve the Virginia, Washington, D.C., and Maryland real estate market and offer comprehensive real estate services, including 4½% full-service listings.
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