A rising number of home-sellers across the local area are cutting listing prices if their homes don’t find a buyer immediately.
Is that normal, or does it signify something about the trajectory of the market as the typically hottest selling season of the year takes hold?
“This is a great question,” said Lisa Sturtevant, chief economist for Bright MLS, the region’s multiple-listing service, who told the GazetteLeader she is closely watching fluctuations in that data “to monitor where the market is headed.”
For the week ending April 21, 8.8 percent of homes in the region’s multiple-listing system posted a price cut. That was up both from a week before and a year ago, but remains below the peak of 10 percent to 12 percent seen in the early summer and then autumn of 2022, as buyers pulled back due to spiking interest rates and sellers had to adjust their expectations as the market cooled.
Locally, Loudoun County (13.2%) and Alexandria (10.2%) had the largest percentage of price cuts for the week. All other major jurisdictions – the District of Columbia and Arlington, Fairfax, Montgomery and Prince George’s counties – reported figures ranging from the upper 7-percent range to just under 9 percent.
What does all this mean in the real-world home-sales environment? We go to the expert, who suggests the market is in something of a quirky place.
“We’re starting to see more sellers dropping their list prices; however, original list prices are still rising,” Sturtevant said. “This suggests to me that sellers are still reaching on pricing, but are now a little more likely to pull back on their asking price if the home sits for a few days.”
The Bright MLS catchment area incorporates much of the Mid-Atlantic region, but only two sub-sectors (the D.C. metro core and the swath from Prince William to Fredericksburg and west to Fauquier County) are seeing a significant uptick in price cuts.
“These are also the highest-cost markets in our service area, which suggests that we might be hitting an affordability ceiling,” Sturtevant said.
For now, sales prices keep rising across the region, owing largely to an inventory that remains tight by historic standards.
Will those higher sales prices continue? Sturtevant said areas or specific market segments where the price-cut percentage rises to 14 percent or 15 percent in a given week could start to see a flatlining of price appreciation.
“It also depends on how much those price drops are – something we also should start tracking,” she said.
In some specific segments, such as the Arlington single-family market, there does seem to be something of a ceiling being hit. Of course, if you collected a dollar for every prognosticator who had said the same thing about the Arlington market in the past, only to be proved wrong time and again, you might have enough money to buy one of those very same single-family homes. (Well, almost.)
At the national level, Realtor.com reports that the number of homes with price reductions in March stood at 15 percent, the largest share in five years.
Areas that topped the price-reduction list tended to be among those that had the highest run-up in prices during the post-COVID rebound but are cooling, led by Tampa (27.6%) and Phoenix (23%). The Washington region was not in the top 10, percentage-wise.
