More Homes For Sale in The DC Region Despite Limited Inventory
The region is currently experiencing a 31% increase in active listings compared to last year, which would typically be a positive development for buyers. However, this increase is not due to an influx of new sellers, but rather a decline in demand and a prolonging of the time homes stay on the market. According to Lisa Sturtevant, Chief Economist at Bright MLS, this is an unusual market phenomenon where both demand and supply are decreasing.
According to Bright MLS, the number of new properties entering the market in December decreased by 30.9% compared to the previous year. Additionally, the amount of pending home sales, or properties with buyers who have signed contracts, also dropped by 35.8%, reaching the lowest level recorded since 2008.
Furthermore, it appears that homes in the region are taking longer to sell, with the average days on market increasing from 12 to 22 days compared to the previous year. Furthermore, home prices in the D.C. metro area have been experiencing a steady decline for several months, with the median price of sold properties being lower than the previous year, which hasn’t occurred since 2016.
The average cost of homes that were sold was $513,315, which is a decrease of 1.3% compared to December 2021.
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According to Sturtevant, this is the first time that there has been a decline in home prices on a year-over-year basis, indicating a significant slowdown in the market.
The peak of home prices in the D.C. metropolitan area occurred in May 2022, and currently, the average price is 15% lower than that peak level.
Despite this, Sturtevant remains optimistic about the D.C. area housing market for 2023. She states that the underlying factors, such as a strong economy and favorable demographics, suggest that more buyers and sellers will return to the market in the spring.