Happy May everyone! The Spring real estate market is in full swing with some pretty interesting things happening, which we will go through. We also have an announcement for our upcoming Summer Bash client event coming in June at the end of the video, so let’s dive right in:

The number of active listings has continued to rise this spring, up 17% from last month across all home types, and up 21% from last year. There are more homes on the market now, which is great news for buyers who have felt the pain from a lack of options.

This month, we saw a slight decrease in average sales prices for townhomes and condos, while the average sales price of single-family homes skyrocketed to nearly $1M. This is the highest average sales price ever for single-family homes in the DC Metro Area, and demonstrates the incredible demand for detached homes.

The number of new listings in the DC Metro Area increased across all home types, up over 18% compared to last year. This increase was most pronounced for single-family homes, which is great because we need more inventory to meet demand.

The number of closed sales increased across all home types in April, up around 7% compared to this time last year, showing that there is plenty of demand if the inventory will continue to rise.

The months of supply increased across all home types, up nearly 40% compared to this time last year. This shows that the market is cooling off, but is still below the three month stability level. At three months, we see a shift from a seller market to a stable market and prices typically level off.

While more homes are coming on the market, demand is still incredibly strong. The median days on the market for townhomes and single family homes is only 6 days, while it sits at 9 days for condos. For sellers, there is still a strong demand for your home, and for buyers, it’s important to move quickly to put together a competitive offer.

On average, both townhomes and single-family homes are selling for around 102% above the listing price, demonstrating the competitive landscape for buyers.

We saw a recent decrease in interest rates, providing some welcome relief for buyers.  At around 7%, the rates have not yet put a damper on the market, as demand and prices are high.

Higher prices and interest rates have led to the lowest affordability rates of the past 25 years when you consider the cost of housing compared to incomes. Buyers are now using a higher percentage of their income for housing than they have in a long time. Many consider renting, only to find that rental prices have risen as well.

Economically, the unemployment rate remains very low at 3.9%, well below the average of 5.7% over the past 75 years. This is great news for those who fear recessions because it is very hard to have a recession when you have high employment. This also means it’s unlikely to see a decrease in demand for housing.

What it might mean though, is people buy smaller homes. And builders are responding to that. Builders have decreased the size of an average new construction home by 10% over the past 6 years as they try to lower costs to meet affordability goals for homebuyers. On average, new construction homes are still selling fast though, further illustrating the shortage of housing.

So what does it all mean?

If you are a buyer….

  • There are more homes coming on the market, which is good news—but the reality is that prices are increasing as well. Particularly if you’re interested in purchasing a single-family home, you need to be prepared to make a compelling offer that will likely go above asking.
  • The median days on the market for townhomes and single family homes is only 6 days! Make sure you have an active search set up for your dream home, so you have ample time to evaluate homes and make a competitive offer. Every second counts!

If you are a seller….

  • Average sales prices are at historical highs for single-family homes, so if you’ve been on the fence about selling, now may be a great opportunity.
  • With more homes on the market, it’s even more important to differentiate the sale of your home from others with quality marketing, expertise, and staging. Let us know how we can help.

The market continues to be challenging, and it’s never been more important to work with a Realtor you trust to guide you through the process. Our team is here for you whenever you need us, so don’t hesitate to reach out to discuss your real estate needs.

Also,  for our VIP clients and supporters, keep an eye on your email! Summer Bash is on its way, and this time… it’s Olympic-themed! We’re looking forward to seeing you on June 22nd for some competitive fun, delicious food, sweet treats, and plenty of activities for the whole family.

Thanks for checking out this month’s market update—as always, let us know how we can serve you, your family, or your loved ones to make great real estate decisions! We’re always here for you.