Suburban D.C. home sales remain red hot as we move into the waning days of summer, and sales and prices closer to the District remain strong as well. The unfolding challenge as the year closes, however, is how rising inflation and higher interest rates might impact the market.
Average Washington, D.C., home prices were $821,126 in July, down from an average of $885,802 in June, but they were still 4.4 percent higher than they were in July 2020.
In Alexandria City, average home prices were up 3.1 percent over July 2020, and increased 1.5 percent over June of this year.
Fairfax County average July home prices were up 6.1 percent over July 2020, but they were down almost 3 percent from June.
The market is still on fire in Prince William County as well. In July, average home sale prices were up 16.1 percent compared to July 2020. And prices held steady compared to June of this year.
Prince Georges County showed an average price increase of 12.8 percent last month compared to July 2020, and Montgomery County prices were up 10.3 percent over the same period.
While fewer home sales overall tend to make the statistics swing a little more in Arlington County, July average home sale prices were down more than 5 percent compared to July 2020. The story was the same in Falls Church City, where home sale prices were off about 3.3 percent compared to the same time last year.
Heavy Suburban Demand
Scorching demand in Montgomery and Prince Georges counties showed tightening inventory last month, down 8.1 percent and 7.3 percent respectively, compared to July 2020, while sales inventory was up over the same period in every other jurisdiction we cover.
One of the biggest indicators of that demand is a continued reduction of days on market. In Fairfax County, homes for sale were on the market for an average of just 13 days in July. That average was 18 days a year ago. Prince William County was similar, with homes averaging just 10 days on market last month. In Prince Georges County, days on market dropped from 27 in July 2020 to just 12 last month. And Montgomery County saw a drop as well—from 25 to just 15 days over the same period.
Closer to town, days on market was a little more tempered. While the average days dropped to from 26 in July 2020 to 23 last month in Washington, D.C., Arlington County saw an increase in days on market—from 17 in July 2020, to 23 last month. Alexandria City held steady at 16 days on market, the same as July 2020, and Falls Church City days on market clicked up to 14 from 13 over the same period.
Economic Storm Clouds
Though the threat of interest rate increases over the long term remains, mortgage interest rates still are low. As of Aug. 18, 30-year fixed interest rates were 3.06 percent, while 15-year rates were 2.32 percent.
But a big problem right now is rising inflation, particularly over the past few months. While inflation remained at 5.4 percent in July, inflation numbers are at their highest point since 2008.
Federal officials continue to call current inflation “transitory” and insist that such inflation will ease once employment, supply shortages, and the many residual impacts of the pandemic subside.
The challenge is convincing consumers who see this inflation reality first-hand when they face higher prices at their local restaurant, grocery store, Lowes, or Home Depot.
Stay tuned to DCRegionRealEstate.com for the latest real estate market information 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.
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