Welcome to the December 2018 real estate market report for Washington DC’s. I will present a few citywide news tidbits, and then dive into the analysis of Uptown DC home sales.
Washington, DC Market Trends
The Washington, DC real estate market saw a big drop in the number of homes sold in November. D.C. home sales in November fell by more than 17 percent compared to last year. The median sales price was $600,000, up 9.3% from 2017.
We’ve been on Inventory Watch for several months. The number of available homes for sale in the city has slowly increased, hitting 2.4 Months of Supply in November (Months of supply is a good indicator of whether a particular real estate market is favoring buyers or sellers. Typically, a market that favors sellers has less than 6 months of supply).
There is a lot of uncertainty regarding the real estate market heading into 2019 and the partial shutdown of the Federal Government doesn’t help. That uncertainty has raised concerns that we may be headed toward another housing crash like the one we experienced a decade ago.
Here are four reasons why today’s market is much different:
- There are fewer foreclosures now than there were in 2006. Foreclosures sell at a discount and put downward price pressure on nearby homes. Foreclosures are currently at historic pre-crash numbers – far fewer foreclosures than we ended 2006 with.
- Most homeowners have tremendous equity in their homes. Ten years ago, many homeowners converted much, if not all, of their equity into cash with a cash-out refinance. When foreclosures rose and prices fell, they found themselves in a negative equity situation where their homes were worth less than their mortgage amounts. Many just walked away from their houses which led to even more foreclosures entering the market. Today is different. Over forty-eight percent of homeowners have at least 50% equity in their homes and they are not extracting their equity at the same rates they did in 2006.
- Today’s lending standards are much tougher. There are no more NINJA loans (no income, no job, and no assets).
- Affordability is better now than in 2006. Though it is tough for Americans to find a home today, financially it is more affordable to purchase a home now than it was from 1985 to 2000.
The housing industry is facing some rough waters heading into 2019. Although families in the market for housing have a right to be concerned, the information above show that the market is much healthier than it was prior to the crash ten years ago.
Uptown DC Real Estate Market Stats
November Market Data for Zip Code 20011 (Takoma, Brightwood, Manor Park)
November Market Data for Zip Code 20012 (Shepherd Park & Takoma)
So, what advice can we give based on the latest statistics?
Bottom Line Advice for Uptown Home Buyers
After years of chasing rising home prices, home buyers have finally started calling “TIME-OUT” on overpriced homes. At the end of the year, even homes in DC’s most sought after neighborhoods are sitting on the market if they are even slightly too expensive. My email inbox is filled with notices from other agents who are lowering the asking price on their listings.
While this is good news for buyers, we must also balance that with a growing uncertainty about the overall economy and the shenanigans with federal budget.
If you’re considering buying a home in the Uptown DC area, please contact me at 202-717-2276. I will help you find the right home!
First-time home buyers may want to check out my story: Diary of a First-Time Homebuyer.
Bottom Line Advice for Uptown Home Sellers
Your friends and neighbors told you their stories. They sold their house last year or even in the spring of 2018. And they received multiple offers on it, with most well over asking-price, despite its condition. You put your home up for sale expecting the same. And now you’re….
….waiting, waiting, waiting for the phone to ring.
Folks, the DC real estate market has shifted. It is not a time for fear, but potential home sellers will need to adjust their mindset and their expectations. Sky-high prices have forced home buyers to be more picky and discerning about the offers they make. Sellers need to react accordingly. Pricing a home correctly is the key to having it sell quickly. When homesellers adjust to the new market reality, I believe we will see the number of closed sales return to a more even level.
For an evaluation of your specific home’s value in this changing market, please contact me at 202-717-2276.
See you next month!
About Uptown DC
Uptown DC is an exciting area composed of several historic neighborhoods. With a diverse and sensible housing stock, it has always been known as a family-friendly, “move-up” destination for hardworking Washingtonians.
Now, with the redevelopment of the 110-acre Walter Reed campus, this area is poised to join the ranks of the hottest areas in the city. This project will bring 66 acres of mixed-use development: shops, restaurants, entertainment and new residents. Children’s Hospital is developing a new health research campus and the U.S. Department of State will welcome chancelleries from a dozen nations.
All data is derived from the Washington area Bright MLS system as of December 10, 2018.
This report is for single family homes and rowhomes, NOT condos. The report covers the neighborhoods of Brightwood, Colonial Village, North Portal Estates, Shepherd Park, Takoma and Manor Park. This report is informational and for the best advice for you as an area home buyer or seller, please contact me for a specific review of your needs.