Another round of monthly data confirming signs of cooling but not catastrophe in the regional home-sales environment.
“The Washington area is still a sellers’ market – however, buyers have more leverage on price with less competition in the market,” notes Bright MLS, the region’s multiple-listing service, which on Sept. 12 detailed August’s sales figures.
Those sales totaled 5,323, down more than 25 percent from a year before, with each of the 10 major jurisdictions comprising the region showing double-digit declines.
“As we head into the fall market, buyers should expect to find more options and potentially will have more leverage on price, as sellers are readjusting their expectations,” said Bright MLS chief economist Lisa Sturtevant, who said that after years of sellers calling the shots in the local market, there “are signs of balance inching back in.”
Pending sales for August also were down; those transactions generally translate into competed sales a month or two after posting, confirming that the tend is likely to be downward for several months at least.
Sellers may not be thrilled, but those on the other side of the transaction may be silently cheering.
Buyers this autumn will “find they have more time to make decisions, and will be in the position of asking for home inspections and appraisals, concessions that were virtually unheard of last year,” Sturtevant said.
Despite the sales declines, the median sales price for properties that closed across the region during the month ($555,000) was up 3.4 percent from a year before, led by a 5.8-percent increase in the median sales price of single-family homes. That bump up was higher than the year-over-year percentage increase recorded in July, reversing four months of declining rates of growth.
One reason prices keep rising: An ongoing dearth of inventory. The number of new listings in the region was down 26 percent in August compared to a year before, the sixth consecutive month of year-over-year declines as some potential sellers opt to stay on the sidelines for now.
Take the available inventory and divide it into last month’s sales and you get 1.22 months’ worth of supply currently available. That’s well below the 3-month supply that would be required for most analysts to agree there is a buyer-seller equilibrium.
(Of the jurisdictions making up the Washington region, only the District of Columbia has more than two months’ worth of supply, standing at 2.07. That could be one reason why that locality was one of the few jurisdictions to show a decline in median sales price, though a relatively small one, in August.)
One of the strongest segments of the regional homes market over the past six months of cooling has been the upper-end single-family segment, perhaps because buyers in the economic stratosphere are less impacted by interest-rate hikes. But new figures that measure forward-looking buyer interest report that segment had the biggest decline among all housing types from July to August.
But regardless of the housing type, homeowners who accept the new reality are unlikely to be derailed in their efforts to find a purchaser.
“Sellers who price their properties to reflect today’s market, and not last year’s market, will still find eager buyers,” Bright MLS declared.
Figures represent inventory in the District of Columbia; Arlington, Fairfax and Loudoun counties and the cities of Alexandria, Fairfax and Falls Church in Virginia; and Montgomery, Prince George’s and Frederick counties in Maryland. All August 2022 figures are preliminary and are subject to revision.