Welcome to the July edition of our DC Area Market Update! There are some really interesting things happening in the market but before we jump in, we just wanted to express our gratitude to our clients, friends, and supporters. As you may have heard, we once again earned a spot this year on Washingtonian Magazine’s 2024 list of Top Real Estate Agents in the region. This recognition is a testament to the wonderful clients we’ve been privileged to serve, and reinforces our desire to continue providing our clients with excellent advice so they can use real estate to get further faster in life.

Ok, let’s dive into what’s going on in today’s real estate market!

Friends, there is a HUGE difference between what’s happening in the city of DC versus the suburbs. Take a look at this 10 year chart showing the months of supply for all housing types over the past 10 years. This chart shows DC in Red, Northern Virginia in Blue and the Maryland Suburbs in Purple. The market in Maryland and Virginia are similar and remain very strong, but DC has gone from the strongest market to the weakest. For context, under three months is a strong sellers market where prices increase, from 3 to 4 months prices typically stabilize, and over 5 months  is where we turn toward a buyers market and prices typically start to come down.

If we narrow the chart to only include condos, we see that DC is already crested above 5 months.

However, we haven’t seen prices come down that much yet—in fact they continue to be rising. It often takes 3-6 months for prices to reflect what the market is actually doing, which is why we continue to bring you this data, so you can stay ahead of it. If this trend continues, we can expect to see prices in the District start to fall.

Another illustration of this is the average sales price to original list price ratio. You can see that DC properties are selling for about 97% of the list price on average whereas Northern Virginia and the Maryland suburbs are around 101%. The suburbs are doing well and we should continue to see price increases in the near future.

When we look at the DC Metro area as a whole, we see that the number of active listings has remained steady across all home types compared to last month. While slightly higher than last year, there is still a shortage of options for buyers, especially when it comes to single family homes.

However, as inventory remains steady, we are still seeing historically high home prices for all home types.

We need more listings to meet the demand, but the number of new properties coming on the market remains low.

The number of days a home is on the market before it goes under contract remains low as well, particularly for single family homes, sitting at a median of 6 days on the market. We are continuing to see an incredibly strong demand for single family homes compared to the rest of the housing market.

An interesting thing to keep an eye on is how the upcoming Presidential Election will impact the real estate market.

Firstly, we have seen decreased interest rates leading up to the election in 8 of the last 11 presidential elections.

This increases home affordability, but nationally, we actually see a drop in sales during election years due to the uncertainty of the election. People aren’t sure who will be elected, so they hold off on making real estate decisions until they see some economic stability. But this typically doesn’t last long.

The year following an election year, we typically see an increased number of home sales once sidelined buyers return to the market. This will be an interesting metric to keep an eye out for in 2025, once the president is elected.

Interest rates have continued to hold steady with a slight uptrend last month.

Experts are still projecting drops in interest rates over the next few months, with a prediction of 6.5% when we start the new year.

So what does it all mean?

If you are a buyer….

  • The demand for housing in the suburbs is exceptionally strong. With low unemployment, we see prices continuing to rise across all home types. In DC proper, we expect inventory to rise and prices to soften, if not fall, in the coming months. The one exception will likely be Northwest DC, which is usually insulated from the economic movement of the rest of the city. I think we are going to see some opportunities for young buyers to pick up some good opportunities in the city in the next year or so.
  • Interest rates may seem high right now, but even experts are only predicting that they will drop to 6.5 percent in the first quarter of 2025. Waiting for rates to drop may not be a great option with the opportunity cost of starting to build equity in your home. If you’re not sure whether buying right now is a good investment, give us a call. We will take a look at your situation and provide honest and wise counsel to help you take the right next step.

If you are a seller….

  • You are sitting pretty right now if you’re in the suburbs. If you are in the District, you may see some headwinds. Now is a great time to sell your property for top dollar. If you are worried about what it might take to prepare your home for sale, we can help. We’ll provide advice, recommendations, and can even provide capital to defer the expenses it takes to get top dollar for your home.

That’s it for this month, please know that we care about you and are always here for you and anyone you know who needs wise real estate counsel. We love what we do and can’t wait to help you find your next home!