A slower-than-normal spring home-buying season in the Washington area, yet one coupled with rising prices, could be in the cards.
That’s the prediction of Bright MLS chief economist Lisa Sturtevant, who sees a “bumpy” ride ahead for the market.
“Higher mortgage rates and economic uncertainty have subdued the ramp-up to the spring market across much of the Mid-Atlantic,” Sturtevant said in parsing home-sales figures for February.
New figures were released March 10.
While sales are soft, inventory remains low, as many sellers (content to sit on their extra-low-home-interest-rate mortgages) stay on the sidelines.
For those in the spring market, either as buyers or sellers, it will be no slam-dunk.
“Buyers will likely have to compromise on what they want in a home, while sellers will need to make their house showing-ready, price it appropriately and be ready to negotiate,” she said.
Home sales across the Washington region totaled 3,169 in February, down 24.7 percent from what was then still a robust, lower-interest-rate market a year before.
Year-over-year home sales have been down 17 of the last 18 months, but the rate of decline has eased a bit in the last two of those months.
Inventory has percolated higher, largely due to homes taking longer to sell, but remains relatively low because homes coming onto the market in February stood at a two-decade low.
That relative dearth of home options – 40 percent below where things stood in February 2020 right before the pandemic – has kept prices stable. The median sales price of all properties that went to close across the Washington metro area in February was $535,000, up 1.7 percent from a year before.
That increase is for all kinds of housing – single-family, condominiums, townhouses. However, in the single-family market by itself, there was the first year-over-year decline since 2016, which may point back to affordability issues.
Overall sales for the month were down by double digits in all areas of the region: Arlington, Fairfax and Loudoun counties and the cities of Alexandria, Fairfax and Falls Church in Virginia; the District of Columbia; and Montgomery, Prince George’s and Frederick counties in Maryland.
Median sales prices were up in most locales but down in Arlington, Falls Church, Frederick County and the District of Columbia, and largely flat (if slightly positive) in Loudoun and Fairfax counties.
Where is the region’s market headed? Expect sales to continue to be down for a while; the number of pending sales reported across the region for the month of February was off 28.3 percent from a year before.
Those pending sales likely will enter the “sold” category in either the March or April sales reports.
Figures represent most, but not all, homes on the market. February 2023 figures are preliminary and are subject to revision.
